POINTS TO CONSIDER
If you thinking about setting up a business as a sole trader first you have decide whether being self-employed is really the right business structure for you. You have to weigh in the taxes you have to manage and pay; all the required forms to fill; your personal responsibility towards losses and last but not least your personality.
Being self-employed has its own pros and cons:
- You are in charge, as you run your own business, you can make a business decision anytime without any delay
- You keep all the business profits after you paid tax on them
- Easiest way to start up and you can change your mind about the business structure at any time
- You can work as an employee as well
- Less administration, lower running costs
- Your business is private, no data have to be made public
- Certain professions can benefit of perceived being small and specialized especially if your market target is mainly local or the products you offering is for example handmade, or produced in small series
- Unlimited liability, you are personally responsible for any debts run up by your business which includes your personal assets
- You might find it very difficult to finance your business’ initial costs if you planning on an investment-heavy profession – eg. Opening a small pastry shop – other than your own funds.
- If you do not like to make decisions and rather work with others sharing responsibility, being self-employed might not be the best choice for you
- A Sole Trader might be falsely perceived as less established, less professional than a limited company
Before registration you have to make sure that you have your NI number; you will work and live in the UK.
Depending on your circumstances (new/former sole trader, sent/not sent tax return before) you have to register for Self Assessment and Class 2 National Insurance as a business. Unique Taxpayer Reference number is assigned upon registration for those who does not have one yet.
The easiest way is to register online which OptiAccounts would gladly help with.