Tag Archive for Sole trader

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Reprieve for self-employed having to report tax quarterly

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Millions of self-employed will not have to start reporting their tax income quarterly to the taxman from April 2023 as planned.

Bowing to pressure, ministers have postponed overhauling personal tax for the self-employed for another year, in what has been called the biggest shakeup in 25 years.

Making Tax Digital was scheduled to make 4.3m self-employed and small business owners keep digital records and report their income to HMRC every quarter rather than annually from April 2023.

Instead, the measures will now come into place in April 2024, the Government announced on Thursday.

Self-employed tax burden

Ministers have bowed to pressure after complaints that rolling out Making Tax Digital to any self-employed person earning over £10,000 a year would be another administrative burden coming on top of coronavirus and the shaky recovery.

“The government recognises the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the past year,” Lucy Frazer, newly appointed financial secretary to the Treasury, said in a written ministerial statement.

HMRC is pushing for the self-employed to complete their tax returns every quarter to reduce the number of inaccuracies – either

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Hot Business News Today

Reprieve for self-employed having to report tax quarterly

by  •  • 0 Comments

By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Millions of self-employed will not have to start reporting their tax income quarterly to the taxman from April 2023 as planned.

Bowing to pressure, ministers have postponed overhauling personal tax for the self-employed for another year, in what has been called the biggest shakeup in 25 years.

Making Tax Digital was scheduled to make 4.3m self-employed and small business owners keep digital records and report their income to HMRC every quarter rather than annually from April 2023.

Instead, the measures will now come into place in April 2024, the Government announced on Thursday.

Self-employed tax burden

Ministers have bowed to pressure after complaints that rolling out Making Tax Digital to any self-employed person earning over £10,000 a year would be another administrative burden coming on top of coronavirus and the shaky recovery.

“The government recognises the challenges faced by many UK businesses and their representatives as the country emerges from the pandemic over the past year,” Lucy Frazer, newly appointed financial secretary to the Treasury, said in a written ministerial statement.

HMRC is pushing for the self-employed to complete their tax returns every quarter to reduce the number of inaccuracies – either

Read more...

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Setting up as a sole trader – a business is born

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By James Johnson on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Starting a new business is understandably an exciting and apprehensive time. First you have the business idea, perhaps carried out a little research on the demand for your product or service; one of the first decisions to make is what type of business structure to adopt. Setting up as a sole trader is a preferred option for many starting out.

The basic three options are sole trader, partnership or a limited company.

The most common form of business structure for start-ups in the UK is a sole trader, where you trade under your own or a business name. As a sole trader, the risks and rewards rest entirely with you.

>See also: Should I go sole trader, partnership or limited company?

Setting up as a sole trader

There are many ways for a sole trader to set up and start in business, from starting a trade, buying a franchise, taking a hobby to the next level, or inventing a new product or service. Successful businesses do, however, share common traits – a unique product or service or selling strategy.

Any new business owner will naturally be focused on establishing a customer

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Hot Business News Today

Setting up as a sole trader – a business is born

by  •  • 0 Comments

By James Johnson on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Starting a new business is understandably an exciting and apprehensive time. First you have the business idea, perhaps carried out a little research on the demand for your product or service; one of the first decisions to make is what type of business structure to adopt. Setting up as a sole trader is a preferred option for many starting out.

The basic three options are sole trader, partnership or a limited company.

The most common form of business structure for start-ups in the UK is a sole trader, where you trade under your own or a business name. As a sole trader, the risks and rewards rest entirely with you.

>See also: Should I go sole trader, partnership or limited company?

Setting up as a sole trader

There are many ways for a sole trader to set up and start in business, from starting a trade, buying a franchise, taking a hobby to the next level, or inventing a new product or service. Successful businesses do, however, share common traits – a unique product or service or selling strategy.

Any new business owner will naturally be focused on establishing a customer

Read more...

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How to become a sole trader

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By Small Business Team on Small Business – Advice and Ideas for UK Small Businesses and SMEs
Setting up as a self-employed sole trader is the simplest way to start a business. Paperwork is generally minimal, accounting and record-keeping is fairly straightforward and the benefits of being your own boss are numerous.
When establishing a business on your own for the first time then, being a sole trader is the sensible legal entity to start.
How to become a sole trader
There’s not really a difference between being a sole trader and being self-employed. ‘Sole trader’ describes your business structure, while ‘self-employed’ is a way of saying that you don’t work for an employer or pay tax through PAYE. As a sole trader, you are the legal entity in your own right, employing people and entering into contracts. You have no limited liability; your own assets are at risk should the business fail.
Getting started
The first step to becoming a sole trader is to choose a name. Make sure you have chosen a name that’s not being used by any other business. If you do then they could stop you using it. With this in mind, it is worth considering registering your name as a

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Nearly 300,000 sole traders face increased tax bills

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

Nearly 300,000 sole traders face bigger tax bills than expected next year, following the government’s proposal to change the date small businesses report profits.

The move, which also affects partners in accountancy and law firms, would generate billions of pounds for the Treasury years before it would otherwise have received the money.

The changes to tax bills will also eat into the amount of working capital sole traders have for five years as they now have to pay more tax earlier.

>See also: Why the Government’s new insolvency bill is bad news for sole traders

A consultation and draft tax bills legislation published last month revealed plans to alter the 12-month period sole traders use to calculate profits, to bring everyone in line with either March 31 or the end of the tax year on April 5.

What this means is that the date sole traders have to pay their tax bills – which small businesses are currently able to defer by having a later date for their end-of-accounting year – will be brought forward.

According to the Financial Times, the measure is expected to affect 280,000 sole traders, based on

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Tax advantages of a limited company versus sole trader

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Originally written by Haydn Rogan on Small Business
Being a sole trader means that you run your own business as an individual and are essentially self-employed. This is the most popular way of trading in the UK, with almost 60 per cent of businesses opting for this structure.
By contrast, a limited liability company is a separate legal entity to you, with separate finances.
Each option has its own advantages and disadvantages, and anyone starting out in business will need to decide what will work best for them.
Here, we look at some of the major differences in terms of legal liability, taxes and bureaucracy.
Also see: Should I go sole trader, partnership or limited company?
Liability
A key advantage of a limited company structure is that it ringfences your personal assets. If your business fails or is sued, you will only lose any investment in the business and won’t be personally liable for meeting charges such as litigation costs or damages from your own finances. Although, in some cases, lenders may require personal guarantees.
As a sole trader, you and your business are one single legal entity. You are personally liable for any debts and liabilities you incur in the running of your business, including taxes, putting

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Forming a company: Choose your trading type

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Originally written by Joanne Harris on Small Business
Choosing to go self-employed is a career goal for many working people in the UK. More money, better hours, and a flexible work-life balance are just some of the reasons many people aspire to work for themselves. But should you become a sole trader, form a limited company or even a partnership? Choosing the right trading type is a crucial early decision.
Although the pandemic has caused issues for all types of businesses, it failed to dampen the nation’s entrepreneurial spirits, with the latest ONS data recording more than 4.3m people still registered as being self-employed as of March 2021.
As vaccinations speed up and lockdown restrictions ease, now could be the time to form the business you’ve been planning to set up over the past year.
However, before you start, it’s important to consider the right company trading type for you.
The way in which you register your business can impact your tax, take-home pay, legal responsibilities, and even personal finances, so it’s vital to look at all the options before you make your choice.
Sole trader
Being a sole trader is the single most popular way of trading as business, with almost 60 per cent of UK

Read more...

Hot Business News Today

Forming a company: Choose your trading type

by  •  • 0 Comments

Originally written by Joanne Harris on Small Business
Choosing to go self-employed is a career goal for many working people in the UK. More money, better hours, and a flexible work-life balance are just some of the reasons many people aspire to work for themselves. But should you become a sole trader, form a limited company or even a partnership? Choosing the right trading type is a crucial early decision.
Although the pandemic has caused issues for all types of businesses, it failed to dampen the nation’s entrepreneurial spirits, with the latest ONS data recording more than 4.3m people still registered as being self-employed as of March 2021.
As vaccinations speed up and lockdown restrictions ease, now could be the time to form the business you’ve been planning to set up over the past year.
However, before you start, it’s important to consider the right company trading type for you.
The way in which you register your business can impact your tax, take-home pay, legal responsibilities, and even personal finances, so it’s vital to look at all the options before you make your choice.
Sole trader
Being a sole trader is the single most popular way of trading as business, with almost 60 per cent of UK

Read more...

Hot Business News Today

5 most common tax mistakes when you’re self-employed

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Originally written by Simon Thomas on Small Business
What’s worse when you’re self-employed? Having to pay your tax bill, or making a mistake and finding out you’ve overpaid?
Filing your small business taxes each year does not have to be stressful or painful. Tax can be a bit of a headache for anyone in business, and for the self-employed, it’s no different. The danger of getting taxed wrongly could mean submitting tax returns late, incorrectly, or not at all, leading to some hefty penalties and time-consuming investigations from HMRC.
>See also: How the newly self-employed should navigate the complex SEISS process
However, if you make sure to do little bits of work throughout the year, filing your taxes can be quite straightforward.
5 most common tax mistakes when you’re self-employed
Some stresses are easily avoidable. Make sure to avoid these 5 common tax return mistakes that many self-employed people make:
#1 – Not registering for self-assessment
If you earn more than £1,000 from one or more trades, you must register with HMRC. People commonly confuse this with the basic personal allowance and believe they do not need to register with HMRC unless they earn over a certain threshold.
This, however, isn’t the case.
Everyone is entitled to earn a certain

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