Register as Sole Trader

How to Register as Sole Trader?

06/08/2021Business , Finance , self-employed accountant , Sole Proprietorship , Sole Trader

Establishing your own business is the best way to be your own boss, have control over your work-life balance, and enjoy flexible working hours. And the most basic type of business structure is the sole proprietorship. Due to the freedom and work choice, there are around 3.5 million sole traders in the UK that makeup 59% of the UK private sector business population. So, if you also want to be the one, you need to know how to register as sole trader. Continue reading this post to learn more!


Ways to Register as a Sole Trader?

To start your business, you are required to register it with HMRC first. You can do it by:

  • Applying online and filling out the online form via the self-registration form.
  • Sending the registration form via post to HMRC.
  • Contacting HMRC on 0300 200 3310.


Our qualified accountants at CruseBurke will assist you to manage your finances effectively. Feel free to get in touch with us!


Information HMRC Needs for Registration

HMRC needs the following information to register your business (sole proprietorship):

Information Needed for Registration

  • Name
  • DOB
  • Postal address
  • Telephone number
  • National Insurance number
  • Business name
  • Nature of the work
  • Starting date of the business

If you lack an NI number, you can contact Jobcentre Plus to get one. On the other hand, if you have it but can’t find it, you can go online and fill in CA5403 to get your NI number.

In addition, you also need to know that your business name should not include Ltd, LLP or plc. It should not contain sensitive words and expressions, it should not seem offensive and it needs to be a unique trademark.


When Should I Register?

The sooner you register, the better. However, you need to register before 5th October for your business’s second-year tax. If you register late, you don’t need to pay a penalty if you are sending your Self Assessment tax return and paying your tax bills on time. Keep in mind that a tax year starts from 6 April to 5 April the next year.


How Can I Register for Self Assessment?

As a self-employed person, you need to register for the Self-Assessment. You need to do so by 5th October of the second year of your business, otherwise, you might face a penalty.

Normally, the registration process takes around 10 working days for people living in the UK. If you’re abroad, it might take around 21 days.


Efficient record management is the best way to keep your finances in order. Therefore you must need the help of an accountant in this regard. Contact us today!


What’s Going to Happen Next?

A Unique Taxpayer Reference number (UTR) will be provided to you after your business has been registered. Then, you’ll get an activation code for activating your Government Gateway Online Account. You will also get access to the Self Assessment service via your online account which will show your tax status.


Legal Responsibilities

Once you’re registered, you can start trading! But you need to know that there are a few responsibilities that you need to follow as a sole trader. These include:

  • Registering for Self Assessment
  • Choosing a business name
  • Keeping financial records
  • Sending annual tax returns
  • Paying taxes
  • Following the VAT rules of HMRC


Quick Wrap Up

To sum up, you are now well aware of how to register as a sole trader, what information you need to provide, how can you register for self-assessment and what are your legal responsibilities as a sole trader. Although setting up a sole proprietorship is easy, however, managing its finances can be complex, particularly sending tax returns after each tax year.


Therefore, look no further other than CruseBurke. We offer comprehensive accounting and taxation services to Sole Traders for only £25 per month. You may create your own unique package here.


Get an instant quote right now! 


Disclaimer: This blog is written for general information on how to register as a sole trader.

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Can a Sole Trader Have Multiple Businesses
Can a Sole Trader Have More Than One Businesses?


Are you planning to start a new business as a sole trader? You might be worried about asking the question “Can a Sole Trader Have Multiple Businesses?” The other questions coming along with this primary question are related to the tax, national insurance and VAT implications. So, you need not worry about this as you can run as many businesses as possible to enjoy flexibility and freedom as a sole trader. On the other hand, you can maintain the income you need to bolster your lifestyle. Running a small business as a sole trader may increase your potential to manage more than one business simultaneously. It brings not only a higher level of income but financial problems while dealing with the HMRC. So, let’s discuss each of these problems and discuss the solution!   Are you a sole trader and want to have another business in the United Kingdom? Why not take assistance from financial advisors at CruseBurke who are keen to help you?   Can a Sole Trader Have Multiple Businesses? Fortunately, a sole trader can have multiple businesses at a time. For this, you need to be cautious about a few things and you can manage all your financial hassles seamlessly. A sole trader is simply required to provide self-assessment tax returns including a separate section for each of your businesses. If you register all of your businesses separately with HMRC, you will receive a different Unique Tax Reference (UTR) number each time. It will be a hassle for the sole traders and the HMRC. So, it is wise to report only one self-assessment tax return report instead of reporting separately for each business. HMRC will calculate all of your income as a whole from all your businesses, and not as a separate income. However, you are suggested to not merge the bookkeeping records and other details of all businesses as it won’t be feasible and efficient from the tax perspective.   How To Deal With VAT? With more than one business, the one question arising is that should you register for VAT separately for each of your businesses. The answer to this question is a little bit tricky. For example, the criteria for being a VAT registered is the annual turnover of £85 000. If your total income from all your businesses amounts to this threshold, you are liable to register for VAT with the highest turnover. The major reason behind this is that if you register other businesses for VAT, you will be obliged to pass on the tax to the customers. And, this is not considered an optimum choice due to the financial strain on small businesses. So, it is sensible to register your business with the highest profits for VAT with the HMRC. It will be tax-efficient and a business-friendly approach.   How National Insurance and Tax Returns are Influenced? Your National Insurance Contributions (NICs) and Tax returns will also be affected by the multiple businesses. In this, the option of personal allowance will not be available every time you launch a new business. Instead, you will get a personal allowance only once. The current personal allowance is £12, 570, as of 2022/2023. On the other hand, if your income is more than this personal allowance, you will submit self-assessment tax returns. For this, your income tax bracket will also be updated as your total income from all businesses will be counted. If your annual turnover of £85,000 by adding all the income from all self-employed businesses. On the other hand, your NICs will also be get affected by this branching out of your businesses. Self-employed persons pay Class 2 NICs at a flat rate of £3.15 weekly. Moreover, they fall into the category of Class 4 NICs and it is applied to your profits and not to your income. If your total profits are rising, you have to pay more in NICs. The total profits are counted from all of your businesses.   The Bookkeeping and Invoicing Records Although multiple businesses might be attractive for many, it come along with many financial strains and hassles. Managing your multiple businesses simultaneously requires the management of multiple bookkeeping records and invoicing records. To avoid any mismanagement, you need to maintain business records separately. Merging all of those records can create problems for your business in terms of VAT and customer support. So, it is essential to keep each of your businesses separate unless it is for self-assessment tax returns. Keeping accurate records requires additional time, effort and resources. Therefore, if any one of these is missing, running multiple businesses can become a mess.   The Bottom Line Managing self-assessment tax returns requires no new UTR number. For VAT registration, you need to register your business with the highest earnings if no business has been registered yet. Otherwise, if your first business is VAT registered, the new businesses are not required to get registered for VAT. Your NICs and income tax bracket will also be changed. So, it depends on your whole income and not on a single business. Similarly, you will enjoy the personal allowance only once and not every time you have another business. Above all, you need to consider the factor of time and energy required to put into the management of all businesses. If you can manage all of these businesses efficiently, you can go for the option of multiple businesses. Otherwise, you will ruin your first business as well. I hope you have found an accurate and detailed answer of your question “Can a sole trader have multiple businesses”.   Let’s get the best advice on your business and how it can affect your taxes as a sole trader from the top-notch legal and tax advisors at the CruseBurke. Send us a message or give us a call.   Disclaimer: All the information provided in this article on Can a Sole Trader Have Multiple Businesses, including all the texts and graphics, is general in nature. It does not intend to disregard …

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How to Pay Yourself as a Business Owner
How to Pay Yourself as a Business Owner

15/04/2022Business , Business Growth Ideas

When you are associated with the business as an owner regardless of the size of your business, you definitely realise that it affects your business growth when you pay yourself for it. Further, you are even taxed on that pay as well. How to pay yourself as a business owner is something really important to understand to avoid any bad impact on your business growth. If you have not set up a specific type of structure, this makes you come under the sole trader business structure automatically. Further, in today’s article, we will talk about how to pay yourself as a sole trader, in partnership, and as a company. Before we delve into the discussion, let’s have a look at the point we have got covered here in the article. This includes the following: Learn to Pay Yourself as A Partner and Sole Trader How to Pay Yourself As A Business Owner or Company How much to Pay Fairly? Final Thoughts   Stuck with your accounts and 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.   Learn to Pay Yourself as A Partner and Sole Trader The simplest way that usually the sole traders and the individuals in partnership use to pay themselves is to withdraw the cash payment from the business account. These kinds of personal withdrawals from the business accounts are added to the list of profits. This amount is also taxed by the end of the tax year. It is also recommended to keep the amount in a separate account and keep adding chunks every month. This amount of separate money will help to pay the tax when it is due by the end of the tax year.   How to Pay Yourself As A Business Owner or Company The usual practice of the company owners is to pay themselves as a salary amount. The process is carried out in the same way as it is in other jobs. In the business book records, the salary amount is added under the details of business expenses. The owner has to pay personal income tax on it as well. It is popular among small businesses and company owners that they withdraw the amount as salary and adjust it in the profits of the company.   We get in touch with our expert accountant to obtain information and get a tailored kind of meeting schedule that suits your business requirements.    How Much to Pay Fairly? Once you understand the suitable way to pay yourself for your business as an owner, the next step is to decide how much you must pay yourself. To seek a balance between the what is the requirement of household expenses and what is the need of your business is challenging. Let’s explain this in the following steps: Business Needs Maintain Balance Household Expense Maintain Balance: The negotiable balance between household requirements and business needs is important for your own tranquillity. Don’t try to avoid the give and take policy in the initial stage of your business. Business Needs: There must be enough cash to cover the business needs like reinvestments, expenses, and rainy day funds. A detailed record of the money you owe to others and the due expenses will help to withdraw the right amount of cash. A separate account must have a separate amount of cash for the taxes to avoid haphazard and hard days for your business. In the phase of business disruptions, the amount of around 90 days should be available for the safer side. From a reinvestment perspective, the required amount for the replacement tools, new ideas, or new hirings should be enough. Household Expense: The day to day living expenses come under the household budget. You should not forget to take care of regular expenses as well as the debt repayments and plan for retirement.   Final Thoughts Now that you have developed a basic understanding of How to Pay Yourself As A Business Owner, we can sum up the discussion by saying that it will depend on the nature of your business type. However, seeking that balance point between your business needs and household requirements will bring you tranquillity. We hope these few minutes of reading will help to make the right decision for the business and flourish it like never before. However, you can always seek more professional advice as well.   Getting our professional advice will Simply help you to focus on your business and we will do the rest. Get in touch now!   Disclaimer: The information about How to Pay Yourself As A Business Owner provides in this article including the text, graphics, and images is general in nature and does not intend to disregard any professional advice.

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