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As a sole trader you will not need to notify Companies House nor deal with any administrative or accounting requirements which are required of limited companies. Just inform HMRC of your intentions to go self-employed and you can start trading right away. You should register the moment you start out as a sole trader to prevent you from incurring a financial penalty.
Being in business as a sole trader (or self employed as it is better known) is the simplest way to get started in business and potentially the most financially rewarding way of providing your services. We can offer you specialist tailored advice on the benefits and pitfalls of being a sole trader compared to other ways of trading.
Even though we will register you as ‘self employed’ when setting up, you would not be automatically registered for VAT and our consultants can advise you of your best option.
We will submit your annual self assessment form to HMRC and keep accurate up-to-date records of all your business transactions (supplied by you). You will also pay income tax on all profits and pay National Insurance contributions on those profits.
The Intermediaries Legislation (IR35) does not apply to sole traders.
As a sole trader, you can quickly adapt to changes in your business with minimal bureaucratic changes required and you have complete control over your business and accounting affairs. However, a sole trader is also ultimately responsible for any liabilities should anything go wrong and insurances should be seriously considered.
Chapter 7 of the Income Tax (Earnings and Pensions) Act 2003 dictates that where an individual ‘worker’ contracts with an agency and is subject to control over the manner in which his services are provided, that agency is obliged to apply the rules of PAYE to any money it pays the individual for any work done. For the purposes of taxation, that individual is treated as an employee. Most agencies will therefore not allow you to be self employed where they have found the work and remain in the contract chain, supplying your services.
For further information please call
01707 871610
or email us at enquiry@churchill-knight.co.uk.