New sole trader business questions

Mistral001

Just some further thoughts. The OP's situation is perhaps similar to someone who collects antiques, who decides to become an antique dealer, so the OP's situation it is probably well-trodden ground as far as tax/business finances are concerned. So no re-invention of the wheel is required so to speak. Or in management-speak, it should be quite a common business model.

lovinituk

bigstevex wrote: »

I'm starting to definitely think this! It's so much cheaper being a sole trader than ltd with an accountant too so tbh it might be best!

One thing I have just been advised to do on another forum is to basically use the company to buy the stock off me but I may have to go down the ltd company route to do this!

Accountant here I come lol!

I started out as a sole trader and have since changed to a VAT registered ltd company. To be honest, the accountants fees are not a lot different between the two although I do all the bookkeeping and VAT returns and then hand it all over to the accountant to do the end of year accounts.

If you are already earning a PAYE wage, it may be beneficial for tax reasons if you to go for a ltd company. This is where an accountant can look at your exact circumstances and advise accordingly.

One of the best things I did in business was to engage a decent accountant at the start.

jjlandlord

Use an accountant if you wish but you would gain a lot by understanding accounting and tax, so I'd suggest you also get a few books on the topic to learn it.
I don't think that someone can correctly run a business if they don't understand at least the basics.

bigstevex

Tbh I really like doing my own book keeping etc, I enjoy playing with numbers it's just the end of year things that worry me! When I had my ltd company I was told it's much safer getting an accountant to do your end of year returns whereas it's much easier to do it yourself as a sole trader.

I'll never reach the VAT threshold fortunately, it's just not that scaleable.

Does anyone know any good online accountants? The type where you pay £20-30 a month and it's all done online? I'd prefer this instead of meetings etc all the time

lovinituk

You don't have to have meetings all the time. I've probably met my accountant face to face just 3 times in the last 5 years. Most contact is done over email with the occasional phone call. I would recommend a local accountant though so you can meet them in person if necessary. Find an accountant that will give you a client copy of the same accounting software they use. Then you just have to send them your data at year end and they upload in to their system. Saves a lot of potential reworking by your accountant. We have a client version of Sage 50 which is excellent software.

phill99

bigstevex wrote: »

Either add something constructive or keep your comments to yourself phill99. Whether you wish to help me or not, these comments remain on here for others to see and use as advice, and to be honest you're possibly the most unhelpful person I've encoutered on here! Telling me I'm wrong and adding nothing to the topic is pointless! You could learn a lot off the other 2 members who've replied with quite helpful pointers/answers!

I gave two constructive comments. One being that your house has planning permission for a house, not a warehouse and that storage of commercial business stock would invalidate your home insurance.

You have decided that you didn't want to hear this, so have dismissed it out of hand.

There is no point telling you or advising you of anythg as you seem to know everything or don't want to hear what doesn't fit in with your madter plan.

lovinituk

RE insurance, try speaking to http://insuranceoctopus.co.uk. They do business insurance but can also advise which home insurance companies allow business insurance to run in parallel. I'm sure other brokers can do similar.

Annisele

bigstevex wrote: »

One thing I have just been advised to do on another forum is to basically use the company to buy the stock off me but I may have to go down the ltd company route to do this!

Apologies if I'm teaching you to suck eggs - but if you want a company to buy the stock off you, there's no "may" about going down the limited route.

If you trade as a sole trader, then you *are* your business. You only have one tax return, for you personally, and you are personally taxed on all of the income you receive from all sources.

If you start a limited company, then you and the company are legally two separate people. You own shares in the company, and then the company can own stock. However, if you set a company up it can't buy anything from you unless it has money to do that - that money can come from a loan (possibly a loan from you personally), but you'd need to be very sure you understood the consequences of doing it that way.

Mistral001

Annisele wrote: »

Apologies if I'm teaching you to suck eggs - but if you want a company to buy the stock off you, there's no "may" about going down the limited route.
.

Maybe you could include an unlimited company in that as well. Since the OP is only looking for a mechanism to sell the stock to an entity for tax purposes, it might be worth considering. It would mean he could still keep his financial situation private.

zygurat789

Mistral001 wrote: »

Maybe you could include an unlimited company in that as well. Since the OP is only looking for a mechanism to sell the stock to an entity for tax purposes, it might be worth considering. It would mean he could still keep his financial situation private.

However, it could be argued that he has wandered into the nature of a trade by buying these items andf selling them so the whole other entity is pointless.
It is normal to introduce personal irtems when commencing to trade, the only question is valuation. Any overvaluation will result in a low profit margin which may be picked up by HMRC