Sole Trader Archives - Page 2 of 2

News,May 2018

I’ve Started a Business – What Do I Need to Do Now?

George02/12/2021Business , Limited Company , Sole Trader

Have you just thought about getting into a new business and wondering how you can join a networking group? Getting your business an enchanting logo and looking for unique ways to attract customers can be the pretty fun part of the beginning. However, do you ever think that “do I need to register my business” while you are enjoying the marketing of your business, a couple of finance matters need research for better implementation as well. Once the finance part is stable, you are good to focus on good marketing strategies and ready to enjoy the business growth. Before we delve into further discussion, we need to have a look at the focused points of discussion in this article. This includes the following: Choose between Self Employment or Trade Through Limited Company Limited Company – Incorporate Do I Need to Register My Business? Business Account Consider the Deadlines The Bottom Line looking for a helping hand? How about you get our guys on a quick call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today. Choose between Self Employment or Trade Through Limited Company: According to a famous saying choosing the right path means you are halfway there already. Giving time to seriously consider the pros and cons of being self-employed or trading through a limited company is a wise suggestion here. The need in the case of trading through the limited company is to develop one first before making purchases and invoicing the customers. Several people tend to choose self-employment at the development stage and then plan to switch to a limited company. However, an important factor to consider here is that you can’t go to self-employment if the trading through a limited company has started in the business. Do you seek professional help to know the right business option for yourself? Get in touch with one of our experts to get instant help on your business matters. Do reach out today! Limited Company – Incorporate: Once you are sure that trading through a limited company would be beneficial for you then you should: Start gathering the ideas to set up your own company. Seek a professional accountant to help you to incorporate the limited company. Look for a unique company name and be sure that name is not already taken. Fill the required forms and you will find the companies house to be with you in every step. Do I Need to Register My Business? Registration is an important part of the fundamental stage. If you plan to go self-employed, contact HMRC for self-assessment. This fulfils the purpose that you are bringing into HMRC’s knowledge that you are a person who is self-employed. By doing so, you will be bound to pay tax returns at the end of the tax year as well. In case you have started your business in May, you are not required to inform HMRC instantly but you can do the needful by the end of October. Business Account: Setting up a business account is the basic step that you must do even before the business is set up. Due to the reasons: It will be easy for you to check the business profitability. Accountancy fees will be reduced due to the fact that bookkeeping is way easier because of fine tracks. HMRC investigations will not reach out to your personal information. Moreover, in the case of a limited company, one thing to consider is that the business account must be in the name of your company. Due to the fact that personal accounts or the accounts without company names carry the money that is treated as it is removed from the company. Consider the Deadlines: Track your deadlines in your personal diary in case you choose to be self-employed. Every tax year will require self-assessment tax returns. The tax year starts from 6 April and ends on the 5th April of the coming year. Tax returns must be completed by the following January. For instance, you have started your business in May 2019. The first tax return is from 6 April 2019 to 5 April 2020. You can submit your tax returns as well as your tax bills by the end of January 2021. The Bottom Line: Now that you have developed a better understanding of do I need to register my business and relevant details, we can sum up the discussion by saying that starting a business may sound fun in the initial stage, however, there are certain challenges that might meet you along the road. By following the discussed information, you can make it a seamless process. We hope this article helped to develop a better understanding. Seek professional help with Accountants in London. Get in touch or ask our accountants about your concerns. Disclaimer: This article intends to provide general information based on new business development ideas and answers do I need to register my business.

Can I be Self-Employed and Employed at the Same Time?

George18/10/2021Payroll & PAYE , Sole Trader , Taxation

If you’re looking for a way to increase your income while still working full-time, you might be thinking if you can be self-employed and employed at the same time. The short answer is a resounding yes! If you’ve already had a full-time job while running your own business, you’re probably aware of the liabilities that come with it. Therefore, if you have never been through this situation, then read this blog till the end! We will inform you about its advantages, the tax to pay with, and its further details. So, let’s start! Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your finances and business problems in no time! So, allow us to do this at an affordable package! Can I be Self-employed and Employed at the Same Time? Yes, you can. For instance, you work for an employer/company throughout the day, but in the evenings or at night, you work for your own business. When you run your own business and are solely responsible for its success or failure, you are considered self-employed. On the other hand, you are an employee or employed when you work for an employer on their own payroll and you are paid through it. If you fall under both categories, you are both self-employed and employed at the same time. The money you earn from your job will be taxed under Pay As You Earn, and you’ll need to file a Self-Assessment Tax Return to declare the income you made from your own business. Advantages of Being Self-employed and Employed The advantages are valuable, although they are simple. One of the main reasons is taxation. Several employment ways and forms of income are taxed differently. So, by taking advantage of your possibilities, you can save your money. Moreover, having your own business while working for someone else can be a great source of prosperity and mental satisfaction that you will not find anywhere else. How Does Tax Work If You are Self-employed and Employed? The income tax and NI (national insurance) implications can be complicated in case you are self-employed and working for another employer at the same time or are changing from self-employed to employed or vice versa. You have to inform HM Revenue & Customs immediately as you become self-employed even if you are also working for someone else at the same time or you have already completed a tax return every tax year. You should not inform them late (when filing a tax return). We can register you as self-employed to HMRC on your behalf! Fill out this form and let us handle everything! After registering, every year, you will be required to complete a tax return. You will enter your self-employment earnings as well as any allowable expenditure incurred details in the tax return. This will permit HMRC to calculate the amount of your income tax and NI you must pay. If you have file your tax return you must pay the tax amount at the end of the tax year. Am I Exempt from PAYE If I’m Self-Employed You are exempt from PAYE if the following case applies to you: You are doing business for yourself and are liable for its success and failure and you can make a profit or a loss of your business. You can control what work you do, when, how, and where you do it. You can outsource the work to anybody else. Your employer agrees to a fixed commission for your work. You utilise your amount of money to purchase business things, cover operating expenses, and provide equipment and tools for your own work or the work of the employees you hire. In case you are a self-employed person, you must fill self-assessment tax return form once every year. Also, you have to pay HM Revenue & Customs twice a year ( in January and July). In some cases, you can pay just via PAYE. It means that your taxes will be automatically paid through it and there will be no risk of not meeting a deadline. To use PAYE, You must submit your tax return by October, 31st (manually). You can also submit it online by December, 30th. HM Revenue & Customs will collect the money automatically you owe via PAYE, in case you meet the conditions mentioned above; otherwise, pay through instalments. Unable to calculate your employed and self-employed tax? Let us handle this! What is a Self-Assessment Tax Return? If you are self-employed and do not pay income tax through Pay As You Earn, you must register for Self-Assessment. After the end of a tax year (5 April), self-employed businesses and individuals must file a Self-Assessment tax return to record their earnings. To fill out and submit your returns, you only need to keep track of your receipts and bank statements. HM Revenue & Customs will assess what you have to pay on the information you’ve provided. By the 31st of January, you have to pay your Self-Assessment bill. In addition, the amount of tax you are required to pay is based on your income tax band. You have to send a self-assessment tax return in case: You’re self-employed with a profit of over £1,000 You are a partner in a partnership Remember that submitting your tax return up to three months late will result in a £100 penalty. You will pay more if it is late for more than three months. Final Thoughts To summarise the discussion, we can say that you can be self-employed and employed at the same time, which has many simple but valuable advantages. However, you should be aware, that there are tax implications with this. PAYE is a system that deducts income tax and NICs from employees. But as a self-employed, you must pay tax and NI through Self-Assessment. Turn to us if you need any help with accounting, tax payroll, and other finance-related problems! We will solve you are all …

What is a Sole Proprietorship? Responsibilities of a Sole Trader

George30/07/2021Business , Sole Proprietorship , Sole Trader

If you are fed up with working under someone else and want to be your own boss, you should turn to a sole proprietorship. Although there are different kinds of business structures to choose from but sole proprietorship is the one that needs less hassle and paperwork to establish. So, in this post, we’re going to explore what is a sole proprietorship and what are the responsibilities of the sole trader. A sole proprietorship is a basic business structure where you get work freedom and you have total control over your business affairs. Here you are totally responsible for the success and failure of the business. Though the downside of this structure is you and your business are taken as a single entity where you’re liable for all the business debt. However, here you keep all your income/profit yourself. We’re providing complete accounting and taxation package for Sole Traders only at £25 a month and you can make your own custom package here. Get an instant quote right now! What is a Sole Proprietorship? It is the simplest form of business structure where, usually, the business is owned and operated by a single individual. Here the owner and business are considered the same. A sole proprietorship is straightforward to establish as there are no legal formalities and a lot of administration involved to run a business. What Defines a Sole Trader? If your earning is over £1,000 as a self-employed worker in a tax year, you can register your business as a sole trader with HMRC. For this reason, you can pay Class 2 NICs voluntarily to get access to government benefits. To establish your business as a sole trader, you don’t need to register at Companies House and there is not resignation fee. In addition, you don’t need to have directors, shareholders or partners to handle. As you are yourself the director or owner of your business. But as a sole trader, you need to follow regulations and meet your liabilities. Sole tradership is not only concerned with trade, it also includes plumbers, electricians, builders, plumbers and so on. Almost all kinds of freelancers come under the category of a sole proprietorship. Responsibilities of a Sole Trader Sole traders have a number of legal responsibilities that you need to follow. These include: 1) Choosing a Business Name As a sole trader, you must choose a business name that is unique and different from others. You also need to use this name on your paperwork like invoices, etc. You can’t put Ltd with your business name. Furthermore, you don’t need to use sensitive works for your business. 2) Register your Business with HMRC Though you don’t need to register your business at Companies House, however, you need to register it with HMRC. As you need to pay your income tax through a self-assessment system. By doing it, you can send your annual self-assessment tax return to HMRC to informal your business earnings and expenses and calculate your tax accordingly. Alongside, you can also pay your Class 2 NIC through the tax return. You can register your business with HMRC through the help of these three ways: Fill out an online form via HMRC print off the form and fill it in, and send it to the address on the form telephone HMRC on 0300 200 3310. 3) Keep Accurate Records You need to keep business records as evidence for your business. As HMRC may require the details of your business sales, income, expenses, etc. It also includes bank receipts, invoices, bank statements, cheques, and slips. In addition, you also need to have PAYE records if you have employees and VAT records if you are a VAT registered business. Managing records and keeping track of everything can be daunting and time-consuming. Therefore, you need to talk to our accountants to sort out everything. Quick Sum Up So, you have got enough information on what is a sole proprietorship and what are the responsibilities of the sole trader. A lot of business owners might feel it difficult to manage everything while running their business. For this reason, we are there to make everything easy for you. Whether it’s record-keeping, financial management, tax return or dealing with HMRC, we can do all for you at an affordable rate. So that you can focus more on your business for its success. Therefore, look no further other than CruseBurke. We have a team of expert bookkeepers and accountants for your assistance. Don’t hesitate to get in touch with us. Get an instant quote right away! Disclaimer: This blog provides basic information on sole proprietorship.

Changing from a Limited Company to a Sole Trader: What You Need to Know

George16/07/2021Limited Company , Sole Trader

There are many reasons for changing from a limited company to a sole trader. Company owners believe that sole proprietorship is a simple and convenient option to go for. No doubt it is. In this way, they’d save a considerable amount of money – which they are losing as a limited company owner – by becoming a sole trader. There are many other businesses that are going after this option. But there are a few crucial points that you need to consider if you are changing from a limited company to a sole trader. Important Points to Consider Here are a few important points that you to consider before changing your business structure. Firstly, you need to know that sole tradership doesn’t require any registration. You can start your business right away, just by informing HMRC. Secondly, note that sole traders do not have limited liability which means you’re not protected in case of loss or insolvency. It depends on your business type and how much you’re at risk of potential liabilities and insolvency. Thirdly, winding up a limited company needs a proper legal procedure to follow. You need to submit final accounts to HMRC along with taxes. In addition, this process requires more paperwork like you need to file paperwork for capital distribution and so on. After getting through this complex and time-taking process, your company can be struck off from the register. Fourthly, if a limited company has suffered a loss previously, it needs accounting. So, you need to consult this matter with an accountant as after closure, the company’s tax loss history will be erased. The accountant will bring them forward to offset against a future profit of a company. Remember, you’d lost the opportunity to offset the losses when your company is closed. Obviously, it is not possible to use the company’s losses against the profit made from the sole trading activity. Finally, after changing from a limited company to a sole trader, you need to inform your customers and suppliers about becoming a sole trader. So that you may sign new contracts with the new people. Moreover, you will also change your company account to a business account. Why Did You Become a Limited Company? After considering the above points, you need to ask this yourself before making the final decision. You opted for a limited company to get liability protection, credibility, save tax and so on. Though the situation has been better after the vaccination of more than 52% of the UK’s population. This doesn’t mean that everything will revert instantly as it was before the arrival of the pandemic. According to the government scientists of the UK, the third wave is going to arrive that would leave the same impact as the previous ones. So, the complete revert will take time, so changing your business structure might be a good option if you can’t wait for an unexpected time. However, if you think that your business is going well and will be in the future, you should not go for this option. Looking for a qualified accountant, bookkeeper or tax expert at a reasonable price? Get in touch with us right now! Our Advice We recommend clients to wait for 6 months before changing their business status. Within six months, the situation would be expected better due to the continuous vaccination. So waiting for this time wouldn’t hurt your business a lot. Still, if your business is constantly declining, then turning to a sole proprietorship is worth considering. Final Thoughts Finally, if you are changing from a limited company to a sole trader. It is important to consider both the short-term advantages and long-term consequences. Before making the move, make sure to: Talk to our limited company accountant to review your accounts to utilise the losses before becoming a sole trader Extract all your money from the limited company by seeking advice from our accountants Pay the due taxes and outstanding bills to HMRC before closing your bank account Get advice to know the impact of financial support by the government during the current pandemic To sum up, you need to get advice from an accountant to make the final decision. If you are looking for an accountant to review the financial affairs of a business, look no further than CruseBurke. We have a team of expert accountants for your assistance. Don’t hesitate to get in touch with us. Get an instant quote right away! Disclaimer: This blog changing from a limited company to a sole trader provides general information on the above topic.