Sole Trader startup headaches!

linzibean

I'm in the very early planning stages, and some things are making my head spin.

If I am a sole trader, can I register with Companies house? I have been trawling their website all afternoon and now my head hurts I wanted to register to get a Company number (I would need this as proof of company status for various events I wish to attend).

Then there's accounting - I have a good head for figures, but have no formal accountancy or book-keeping qualifications. Would anyone recommend a good no nonsense book to start with, that I could build up the basics with before I attend a night school class? I am going to be a bookseller so will have to wrap my head around a mix of not-VATable and VATable stock in my accounts - joy!!

I have already asked for advice from the main business bank account thread, but if any of you feel like helping in that respect, feel free

Bean_Counter

Hi,

A sole trader and a registered company are two completely separate entities.

Try the following link for some advice from the government's business link website:

http://www.businesslink.gov.uk/bdotg/action/home?domain=www.businesslink.gov.uk&target=http://www.businesslink.gov.uk/

I would also speak to your local enterprise company or some similar body for advice and other support.

I'm not sure who is the appropriate body for your area, so hopefully someone else will post. However, I am sure that there are many of sources of good advice in your area.

Kilty_2

Company Numbers apply to Limited companies only (be it private or public).

As a sole trader you wouldn't have a company number, you'd simply be "yourname T/A tradingname".

If you need to prove your status for various events, isn't having a business bank account (and being able to show a cheque or something stating your account name) enough?

You mention VAT.... you do realise that VAT registration is voluntary if you have a turnover of less than £61,000, yes?

linzibean

Kilty wrote: »

You mention VAT.... you do realise that VAT registration is voluntary if you have a turnover of less than £61,000, yes?

Yes, but as I will likely do a fair bit of travelling for purchasing purposes, it would be nice to at least claim the fuel VAT back

Bean_Counter

linzibean wrote: »

Yes, but as I will likely do a fair bit of travelling for purchasing purposes, it would be nice to at least claim the fuel VAT back

Now it might start to get complicated. If you want to start claiming VAT back, you need to register for VAT. What is your anticipated turnover? Who are your customers? If they are big companies then they might not mind you charging VAT, but if they are individuals or small companies, then adding 17.5% to ALL your prices with no gain to you (i.e. you obviously apy the VAT over to HMRC) will not help your competitiveness?

Who will own the car? You as individual, you as a sole trader, you as a company? Different rules and advice will apply for each scenario. Any taxable benefit implications, together with the VAT scale charge for private mileage may well more than offset any VAT savings.

linzibean

I'm planning on having a small "company" van because as well as online there are a few trade shows I will be selling at. As a bookseller the majority of my stock will be zero rated, so I will not be passing a VAT charge onto my customers (who will generally be the end use, not a company). I'm starting online with the view of extending into actual premises in around 18 months time.

harryhound

Hi Lizie,

I don't want to sound like a wet blanket BUT, I know 2 (middle-aged & male) people who sell books. They cannot make a living at it, and like some of those other zero rated people called farmers, they have to treat it as a "hobby" business and rely on something more steady "off site" to pay the council tax bills.

I find business administration always takes 3 times as long as I estimated it would, especially if you are dealing directly with the public.

That said, have you a particular niche or unique selling point ? The last time I bought a book even Amazon was too expensive.

Good luck anyway.

Harry.

PS The best business book I can remember reading was:

Warnes, B. (1984) The Genghis Khan Guide to Business, Osmosis, London

You can see from its original publishing date, that was some long time ago, BUT a quick google shows it is still in use. It gives you some idea just how tough competitive business can be.

linzibean

Thanks Harry for your advice Yes, it is going to be niche market, mainly SF but also modelling and military as these are my interests that I know most about and have most contacts with! I am also going to be selling models and collectables. I have worked in bookselling a fair bit and know how tough it is (just check out Amazon's current defecit!) but as I'm both specialist and quite diverse in product range, I'm hoping to have a fair chance.

upallnight

http://www.venturewales.com/

As you're in Wales the above will give you lots of support - they run little tutorials on tax and book-keeping etc. - in fact a whole programme for new start-up businesses.
This should be a Wales sticky.;)

brownhandbag

Remember you can dip in and out of VAT. Could be worth you registering just to start up when you are buying lots?

greyteam1959

Best thing to do is get an accountant they will then tell you what books you need to keep and recommend a simple accounts package that will give them the data they need at the end of your trading year.
There is no point going forward without getting this sort of advice at the outset.
A simple accounts package like Sage will make all your accounting really simple.
You dont need to go on courses etc just bung the data into the package in line with your accountants requirements.