Setting up a sole trader is very simple. The legal name of the business is your own name but you can choose a different trading name if you prefer such as XXL Ice Creams. You would use the trading name for your marketing and your own name (trading as XXL Ice Creams) on legal documents.
You do not need to register at Companies House as that is for limited companies.
You may want to check that the domain name is available if you intend to have a website.
You need to register your new business with HMRC by 5 October in your business’s second tax year. I.e. if you start trading between 6 April 2021 and 5 April 2022 you need to register for self assessment tax by 5 April 2022. HMRC will send you a UTR (Unique Taxpayer Reference) number that you should keep safe. You can also set up your tax account online through your government gateway.
Set up a business bank account. While you can use a spare personal bank account this caused problems for those applying for Covid support as they were unable to prove that they were a business. While you’re about it invest in some simple bookkeeping software and some basic training. We like Xero as we can log in remotely and help our clients. If you want to take payments by direct debit or by card we can suggest the most suitable apps and services.
We recommend that you take out any necessary insurance to protect yourself and your customers. There are some relatively cheap business from home policies. You should also notify your building and contents insurers that you will be operating from home. For most businesses this is just a formality. You will also need to ensure that your motor insurance covers you for business use.
Decide how customers will contact you. Will you use a separate business number? Will this be a real number with a separate landline or mobile or will it be a virtual number using VOIP (voice over internet protocol)
Do you need premises with a shop front, a website or facebook page? Will you use part of your home to run the business? Don’t forget to claim these costs against tax.
With all these costs you will need to ensure that you have enough cash to pay for everything including your taxes when they are due. This is where we can help you with a business plan (as well as that pesky tax registration and even doing your bookkeeping)
Do give us a call to chat about your new business idea so that we are on your team from the beginning.