Going It Alone
...Doesn't Mean You're On Your Own
Setting up as a Sole Trader is the simplest way to get your new venture off the ground but watch out; you and your business are one and the same, so if anything goes wrong you'll be personally liable for any debts.
The Sole Trader route is the most popular way of starting a business in the UK. However, it's not for everyone. RIFT Accounting is here to talk through your options and help you decide what will work best for you.
Generally, you should register with HMRC the moment you start out as a sole trader, so you don't get stung with a nasty penalty.
If you're unsure whether you need to register as a sole trader for what you’re doing, give us a call.
Here's a taste of what we can do for you:
We will talk through with you about the records you will need to keep. You could also benefit from using cloud based accounting software - we would be happy to discuss this.
After registering as self-employed, you should automatically be sent a Self Assessment notice at the end of each tax year (6th April to 5th April).
As a Sole Trader, your business income is counted alongside any other personal income you have for tax purposes. We'll help you fill out and submit your paperwork, and calculate your tax bill.
You'll have to register for VAT if your annual turnover reaches the current threshold, or if you expect it to do so in the coming twelve months. Before you are registered we will discuss your business with you to ensure that you are placed on the best VAT scheme for you.
If you're a wild-eyed rebel on the fringes of society (Known on the street as the Bank-Loan Wolf), then the odds are good that you're a Sole Trader. You're running your business as an individual and your customers are paying you directly. Your profit is your personal income. Life is good.
The thing is, much as it clashes with your rugged, sexy image, you've still got personal taxes and National Insurance to pay. You may not have to run a payroll to pay yourself, but the law makes no distinction between yourself and your company so you stand to lose more than that awesome denim shirt with the sleeves ripped out if it all goes wrong.
For example, under your sole trader responsibilities
Here are some further things that you should also consider for your sole trader business.
Sole Trader Bank Account
You don't need a separate bank account from your personal one, but we would recommend it. You don’t have to use the bank where you have your personal accounts, so it's worth shopping around. We can talk through your options.
Business Insurance for Sole Traders
Some insurance is mandatory, like Employers’ Liability Insurance if you employ people. Others may be required for specific industries, or if customers or clients require it. Some simply offer peace of mind. It's important to know the difference.