Sole trader Archives

Can a Sole Trader Have Multiple Businesses

Can a Sole Trader Have More Than One Businesses?

Mia Hamilton13/09/2022Finance

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 …

How to Pay Yourself as a Business Owner

Mia Hamilton15/04/2022Business , 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.

Self Employed or Limited Company: What’s the Difference?

George30/12/2021Accounting , Accounting Issues , Limited Company , Sole Proprietorship

While setting up your business, one of the most crucial decisions to make is to choose a business structure. There are a lot of business structures to choose from. Limited liability partnership is the less popular business structure used by professionals. The majority of the business structures in the UK are either self employed or limited company. According to the latest reports of Statista, there are around 4.3 million self-employed workers in the UK. On the other hand, there are over 4 million limited companies registered in the UK. Let’s dig deep into both to know what are they, are taxed the same, and what cost and administration is involved. Let’s kick off with what is self-employed and what is a limited company? We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today. Self Employed or Limited Company: Differences Let’s have a quick glimpse at self-employed and limited companies. What is a Self Employment? Self-employed persons work for themselves as sole traders. There are no shareholders or officers and the self-employed person has total control over his business and is liable for all the profits and losses personally. The losses made by a sole trader directly impact the personal finances of a sole trader. Income tax is payable on the profit earned and needs to pay Class 2 and 4 National Insurance as a self-employed individual. What is a Limited Company? A limited company is a separate entity with its own identity and it is separate from shareholders and directors. The personal finances of directors of the limited company are kept separate from the company until there’s fraudulence or any breach. A limited company has to pay corporation tax on the taxable profit and they need to deduct income tax and NI from the employees’ salary through PAYE. Tax Implications Let’s see how self-employed persons and limited companies are taxed. Self Employed Tax Self-employed persons need to pay income tax through Self-Assessment. They need to register for VAT if reached the threshold of £85,000 (2021/22). Here are the tax rates and threshold that a self-employed person should know: Band Taxable income Tax rate Personal Allowance Up to £12,570 0% Basic rate £12,571 to £50,270 20% Higher rate £50,271 to £150,000 40% Additional rate over £150,000 45% The deadline for online tax return is Midnight 31 January 2022. Moreover, self-employed persons need to pay Class 2 National insurance if the profits are £6,515 or more a year and Class 4 NI on profits over £9,569. Here is the rate of NI rate you need to remember: Class Rate for tax year 2021 to 2022 Class 2 £3.05 a week Class 4 9% on profits between £9,569 and £50,270 2% on profits over £50,270 We can register you as self-employed to HMRC on your behalf! Fill out this form and let us handle everything! Limited Company Tax Instead of income tax, limited companies need to pay 19% Corporation tax on the annual profits. Company directors are levied tax based on the salary they earn from a limited company. Dividend tax is paid on dividends received from a company. In addition, income tax and Class 1 NI is payable on any salaries paid by the company. And companies need to pay Class 1 Employers’ NICs on salaries paid to employees. Want to incorporate a company? Get in touch with one of our professionals. Check out our company formation package! Administration and Costs A limited company needs more administration and management tasks compared to self-employed. Limited Company Administration All the limited companies of the UK need to register with Companies House. It must make sure to inform the registrar of companies informed of any changes made, need to file confirmation statement and PSC each year along with the company accounts. The cost of forming a limited company is affordable and the accountants are responsible to manage the accounting tasks along with dealing with HMRC and Companies House. Self Employed Requirements There are fewer legal responsibilities and administrative tasks in forming a limited company. You just need to register for self-assessment and pay the due tax and NI on time. Quick Sum Up So after giving this blog a read, you have now understood which business structure to choose: self employed or limited company. As a self-employed, you are your own boss and liable to pay tax and NI 2 & 4 on your earnings. Whereas, limited companies need to pay corporation tax and Class 1 NI on salaries paid to employees. Bear in mind that there is less hassle to work as a self-employed, but with limited companies, you have to meet administrative and legal responsibilities. Turn to us if you need any help with accounting, tax payroll, and other finance-related problems. We will solve your tax issues in no time and at an affordable price! So, contact us now! Disclaimer: This blog contains general information about the topic.

A Basic Guide to Become A Successful Sole Trader!

George03/12/2021Sole 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: 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.

How to Register as Sole Trader?

George06/08/2021Business , 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): 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.

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

Changing from Limited Company to Sole Trader : A Simple Guide

George16/07/2021Limited Company , Sole Trader

There are many reasons for changing from a limited company to a sole trader. The most common reason – we have seen these days – is the dropping turnover of limited companies due to the impacts of the COVID-19 pandemic. 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. Few 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 the file 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 its cessation the records of corporation tax losses will be lost. 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. What Made you Became 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. As within the six months, the situation would be expectedly 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. You need to consider these points: 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 other 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 provides general information on the above topic.

Can a Sole Trader have Employees?

George19/05/2021Limited Company , self-employed accountant

Wondering can a sole trader have employees! Of course, if a person wants to expand his business, he/she can hire more people for his business growth. In this short blog, we’ll explore how hiring new employees in sole proprietorship can affect its status and whether your business would be entitled as a limited company after hiring the staff. Let’s explore! Do you need to form a limited company to hire employees? Luckily, No! You don’t need to change your business structure for employing new people. If you’re not willing to change your business from a sole proprietorship to a limited company, you don’t need to. We’re aware of the fact that sole traders run the business on their own, but it doesn’t mean that you need to work alone. Sole Proprietorship means that you are running your business with your name. You can hire people on a freelance or part-time basis and permanent basis according to your need. However, you need to set up everything correctly. We’re providing complete accounting and taxation package only at £25 a month and you can make your own custom package here. Get an instant quote right now! Things to do after employing new people: If you’re managing your accounting affairs yourself as a sole trader, it’d be a bit of a hassle for you to consider another person in your tax affairs. Though it might be a bit difficult to do it. However, if you want to save your time and money, feel free to contact us! After hiring new people into your business, you need to be concerned about the payroll, employer’s NIC and the benefits of employees like sick or maternity pay. The first things you need to do is to register as an employer to HMRC. You also need to start working on PAYE. By doing this you can deduct the National Insurance and Income tax from the pay of the employees who’re eligible. You need to pay these liabilities on behalf of your employees. You should make sure to do all the things mentioned to avoid extra charges or penalties from the tax authorities. Quick Sum Up: Hopefully, you have got your answer to can a sole trader have employees. If your business is expanding rapidly, it’d be best to upgrade it to a limited company. This is because of the limited liability. You can save a large amount of your money in case of any mishappening and fraudulence by operating a limited company. Although, a limited company needs more recordkeeping and accounting, yet, it’s hard to be dissolved than a sole proprietorship. As it is crucial to protect your business for the long term. Want low-cost accounting services, contact our professional accountants anytime! Get an instant quote right now! Disclaimer: This blog provides general information about the topic.