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Sole trader advice

A Basic Guide to Become A Successful Sole Trader!

03/12/2021Sole Proprietorship , Sole Trader , VAT

A sole trader is a person who is self-employed and owns a business. According to research, about 60% of UK businesses are sole traders. This business structure is popular because of the simple ways to get into trading as well as the paperwork is minimal. However, sole trader advice by professionals will always be helpful before you plan to begin.

By now, you must be wondering that if it is the right option for you to opt for sole trading. Maybe you are already into working as a sole trader but look for new ways that can push your business toward success. This article is designed to provide the best and easiest tips to make your trading history a success story.

Before we delve deep into the discussion further, we need to have a look at the focused points of discussion in this article. This includes the following:

 

Successful Sole Trader

 

  • Sole Trader Advice to Be Successful
  • Dedicated Bank Account
  • Registration Process
  • VAT and Tax
  • Focused Skills for Business
  • Work Place
  • The Bottom Line

 

Speak to one of our qualified accountants? Give us a call on 020 8686 8876 or request a callback. 

 

Sole Trader Advice to Be Successful:

To be ensured that you want to be a sole trader, it is important that you gather enough information based on the drawbacks and advantages of becoming the one. The advantages that come with this structure cannot be denied. Like:

  • Business control all by yourself
  • Hire people that suits you and the work needs with your own choice.
  • The greater degree of privacy factor about your business
  • Pay tax on your benefits and keep the rest
  • The business can be closed in an easy way than is the case in a limited company.
  • You only have to clear your debts, gather the money and notify HMRC about the business closure.

Moreover, there are several drawbacks that are needed to be considered before taking the plunge in sole trading, this will further help to make the right decision. The freedom and independence that come with working as a sole trader are the prominent factors to the tendency increasing for this. Below are certain tips discussed to be successful.

Dedicated Bank Account:

Many people seek to have a dedicated account to fulfil the needs of the business finances. Maintaining a separate account for business finances is a better idea to be clear about your business and money. This will allow you to have a clear view of your income and expenses.

Registration Process:

It is very important to get yourself registered as a self-employed person with HMRC once you start trading. This will help to declare the status. The year in which you started working as a sole trader, you can register by 5th October after the tax year has ended. Late registration might cause penalities.

VAT and Tax:

As HMRC explains, a sole trader has to pay self-assessment tax returns every year and for that, it is a must to keep a track of your income in a fair manner. This does not matter if the business has yet started to make profits or not. On a tax return, the since and business expenses are declared as well.

Moreover, you have to register for VAT if your annual turnover goes above £85,000.

Focused Skills for Business:

In the process of becoming a business owner, things you are dealing with at the same moment become overwhelming for you. The development of your business skills is equally important.

The business owner must take part in the conferences, courses and event shows to be updated. By having a command of professional skills, you can do the following:

  • Find new clients easily
  • Be updated about the market demands and changes
  • Process different skills as a professional

Work Place:

The dream of becoming your own boss and going for self-employment is to seek the balance in professional work life. It comes with several advantages but the factor of being lonely is when you don’t have enough company in the surroundings for the interaction.

Working from home means there are more chances of being distracted as well. The factor of productivity goes low because of the house chores interruption. It is here suggested that the workplace from your home should be a well-managed room or side that can easily separate your mind from your personal life.

Some other benefits that choosing a better workplace will bring include the following:

  • Discipline
  • Workday and dress properly before you enter into your workplace
  • Enter in professional work mode
  • Choose your suitable working hours
  • Enjoy your lunch breaks

 

The Bottom Line:

Now that you have developed a better understanding of the Sole Trader Advice, we can sum up the discussion by saying that becoming a sole trader comes with prominent and undeniable advantages as discussed in the article but being self-disciplined will help you achieve success as a sole trader.

We hope this article helped to develop a better understanding.

 

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

 

Disclaimer: This article intends to provide general information based on Sole Trader Advice to be successful and relevant details.

    

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

13/09/2022Finance

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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