When it comes to registering a business name, operating as a sole trader is less formal than a limited company. As a matter of fact, you can choose to trade self-employed under your own name, rather than a business name. You do still have the option to register a sole trader business name if you so wish. A sole trader business name should be given careful thought and cannot include trademarked words or phrases.
UK based businesses have to register for VAT when they reach £85,000 in yearly revenue. There can be benefits of being VAT-registered, as you can also reclaim the VAT on eligible goods or services you purchase for your business.
You may employ people that can be put on payroll and we can set up the payroll scheme for you and help you with monthly submissions.
If you are a self-employed subcontractor in the construction sector, the Construction Industry Scheme (CIS) operates special tax rules outlining how payments must be handled by contractors. As a sole trader subcontractor, your contractors may be required to deduct income tax at 20% from your invoices and pay it directly to HMRC unless they register for gross payment status.
When you register as a sole trader, you agree to accept personal financial risk. As your business is not a separate legal entity, you would be personally liable for any debts or legal action against your work. This differs to a limited company, whereby business owners only have limited liability. Deciding whether to set up as a limited company or not is a key decision for all business owners. There are a number of key differences, including tax advantages when changing your business status from a sole trader to a limited company.
