starting up as a sole trader and should I get a company name

sheffield_lad

Hi Guys and girls, I am going self employed later this year and have very limited knowledge of what it entails (hence my early start), I will have very little start up costs and do not need to borrow any money. I am unsure on turnover but expect £30k+. My only customers will be other businesses. Should I register for VAT? and do I need to register a company name (I thought it would be more professional).

Thankyou in advance for your words of wisdom.

Kilty_2

If you are a sole trader you can trade under any name you like providing it doesnt match that of a registered company. If you want to register a company name you (as far as I know) need to register as a limited company, not as a sole trader.

If you think that your turnover is going to reach the £61,000 limit then you need to register for VAT. It could be in your best interests to do so if you are going to be dealing solely (or mainly) with other VAT registered companies, if the majority you are dealing with are not VAT registered then it simply means higher costs for them and more paperwork for you, so consider that carefully.

martindow

Yes as a sole trader all you need to do is let the Inland Revenue know that you are operating as a sole trader and also tell them if you are using a trading name what that is. There is no cost of registering the information and no forms to fill but they might want you to fax or post a letter confirming it in writing. You also will need to make sure you are paying the appropriate NI contributions.

sheffield_lad

Thanks for your advice, If I do use a trading name would I not need to register it anywhere? I have checked the Internet and the domain name is available so I am buying that, but I want to start using the name on letterheads and business cards and was unsure if I needed any form of consent before doing this.

missile

You cannot register a sole trader name at companies house, but you must register a limited company. You can buy a ready made company name for £100. There are advantages and disadvantages of being registered. You may get into bother if you call yourself Bill Gaites or trade as Merks & Spencer Ltd.

Do not bother buying a domain unless you need a ready prepared web site. You can write anything you like on business cards and letter heads, as long as you do not misrepresent that youself.

You may find someone has already registered A.n.other.com, but you simply need to choose a different like A.n.other@hotmail.com or co.uk or @Yahoo etc.

I would suggest you really ought to do a bit more research before going it alone. If you search the net you will find lots of sites giving valuable information for free.

windswept

we bought several domain names, one to use for our website and a few similar sounding ones as well. the hardest part was finding a good name that wasn't already taken . I think it looks more professional to have a business name , even if it's just your name + whatever your business entails , e.g. "simon smith business solutions" etc. we went with the county that we live in - staffordshire + what we sell, I am being vague because there are some people on the ebay board that I don't want to know our trading name. by only dealing with other businesses, I would think that it would be advantageous to be vat registered, if the other busineses are. I highly recommend that you take the free workshops on offer from hmrc, they really are worth a few hours of your time and the people are very helpful.

nelly_2

I think you only need to reg for vat when you go over the £51 grand a year mark. I think its 51 grand anyway

conradmum

I agree that it's advantageous to be VAT registered if your customers are. There are two reasons - if you don't charge VAT, it's like a big sign over your head saying, 'I'm small fry, I don't even have a big enough turnover to have to register for VAT'. Secondly, you can claim the VAT back on anything you buy to use in your business. In my first quarter, I didn't make any profit (wasn't trading, just setting up) but I claimed back about £300 worth of VAT.
It is a faff to have to work it all out though, so I hope you're pretty numerate!