Sole Trading

Leom_2

I'm going to set up as a sole trader and I've organised my website and some advertising. Should I register as a sole trader with HMRC straight away? It might be a while before I get any work but I'm prepared to wait. I don't mind giving it a year or two to get off the ground - it's just a job to bring some pennies in.
Also, when I register, is that when I start paying NI? And what about tax?
Also, can I stay registered as a sole trader for a year or two even if I don't get any business?

A lot of questions I know - appreciate any replies!!
thanks

raineshoe

Yes you should register as soon as possible with HMRC. If they find you have been trading even if you haven't made any money and not registered you can be fined.

Get the paperwork and fill it out. You will need to submit tax returns even if you don't make any money. Also NI you can get that deferred if you are on low earnings, but then you may lose out on your pension and other benefits. Not that self employed are entitled to much, but the little you are if you don't pay NI you won't get. You have to fill out separate forms for NI.

Speak to HMRC if you are not sure they are usually fairly helpful.

LittleVoice

raineshoe wrote: »

. . . Also NI you can get that deferred if you are on low earnings, but then you may lose out on your pension and other benefits. Not that self employed are entitled to much, but the little you are if you don't pay NI you won't get. You have to fill out separate forms for NI.

Just to add that if you are employed (PAYE) as well and pay NI each payday, then paying self-employed NI doesn't gain you anything. So if you have low earnings, don't pay self-employed NI in that situation.

Leom_2

Thanks for the replies.

No, I'm not employed as well so will I need to pay self-employed NI even if I am making no money (i.e. if the business doesn't start very well)?

Horace

Leom wrote: »

Thanks for the replies.

No, I'm not employed as well so will I need to pay self-employed NI even if I am making no money (i.e. if the business doesn't start very well)?

You will still need to pay Class 2 NI which is around £2.00 a week but you can ask for an NI Exemption which will cover you for about 2 years. You could also speak to the HMRC about claiming working tax credits as you may be able to get these, again not much but better than nowt because you have to live on something.

Expect to not earn much for the first two years of business - I have found that but now I am getting clients that will pay as opposed to !!!!!!!!!!s who want work done for nowt.