For many people on the path to working for themselves, the first thing that they will do is register as a sole trader. Registering as a sole trader is an essential part of the process. However, it is easy, especially with expert help.
Want to know more about how to register as a sole trader? Here is our guide on what you need to know.
Give your business a name
When it comes to being a sole trader, one of the first things you need to need to do is decide on your trading name. Since you are working on your own, you may find this part of the process a little strange. However, having a business name in mind can help your business to stand out.
Many sole traders decide to name their businesses with their own names. This is followed by the service they provide. For Example “Helen Jones Cakes”. It does not mean that you have to stick to this formula. It is your business, and therefore it is down to you to decide what you want to call it.
Do I need to register?
The answer to this is yes, you do. When you first set up, you may think that you will not be earning enough to pay any tax. You still l have an obligation to complete your assessment tax return.
It is good practice to register as soon as you set up your business. If you do not register by at least October in the second tax year of your running as a sole trader, then you do face the risk of a fine from HMRC.
Is it easy to do?
The process of registering as a sole trader is much easier to do than you may realise. When you compare it to setting up a limited company. All you need is your company details and your national insurance number. You need to enter this information onto the GOV website for their records.
Once you have done this, you will receive a UTR number from HMRC, which you will need to keep safe to log into the system at the required times.
It does cost anything to be registered as a sole trader. However, if you don’t do things right or at the right time, you may face a penalty or a fine, which is not what you will want to happen to you.
Key dates to remember
If you are planning on setting up as a sole trader, then there are some key dates that you need to have in mind. These are:
- 31st January—this is the deadline to submit your self-assessment return online. This is also the date that you will need to pay your outstanding tax bill.
- 6th April—this is the date the tax year ends each year and is when you will need to stop recording your earnings ready for the next tax year.
- 5th October—this is the date that you will need to be registered as a sole trader in your second year of trading.
- 31st October– if you intend to return a paper version of the self-assessment, then this is the date you will need to do this.
If you need some help from an expert, then get in touch with us. We are Southside Accountants in Wimbledon for sole traders and can ensure that you register as a sole trader and understand the process.
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