Trading on eBay & sole trader vs Ltd company

electronicsuk

Hi forum. This year I plan to support some local charity and non-profit events by providing sound & lighting equipment and engineering. I have other full time employment and right now this is more of a hobby with a view to a potential career change if (a) I enjoy it and (b) can make paying work out of it.

Although not strictly necessary for volunteer work, I'd like to set myself up as a business so that I at least have a a service I can advertise to potential paying customers through these events. I would also like to use the business to buy and trade used sound/lighting equipment through eBay and similar channels, as I think this would be a good way to build my equipment inventory and allow me to take on larger events. So, my questions are:

- At this stage, registering as a sole trader seems like the cheapest and easiest route. I understand that I would be personally liable for any debts the company incurs. Would there be any advantage to forming a limited company if, for example, an incident occurred at an event that resulted in a claim against the company that was not covered by my public liability insurance? Would I be personally liable in both cases, or would the business be liable as a limited company?

- As far as HMRC are concerned, would I/the business be considered to have made a gross profit if I were to buy and sell equipment on eBay, for a profit, and then use that profit to purchase assets to expand the business? If this is acceptable, I assume it would all need to be in the same accounting year? It somehow feels 'wrong' as I would not be able to to the same thing as a private individual without being liable to tax.

- If I registered as a limited company, what SIC code should I be using? The business would be primarily event production engineering. The closest code I can find is 90020 (support activities to performing arts), but would this be appropriate given that the business would also have other activity trading on eBay or the like?

Many thanks in advance.

00ec25

if you are genuinely serious about this then go and see an accountant and get full and frank information based on the answers to so many questions they will ask that it would be ridiculous to even try to do the same on a free internet forum

- your understanding of a company owner's liability is flawed

- your understanding of accounting treatment for assets for sole traders is non existent

- SIC is the least of your worries

electronicsuk

I appreciate your frank and honest reply. I'm smart enough to appreciate that I don't know what I don't know, so will do as you suggest and seek advice from a professional.

00ec25

PS read up on the £1,000 micro trading allowance as you may need it for your first year

this passed into law 1 year late in April 2017, but here is the start point
https://www.gov.uk/government/publications/income-tax-new-tax-allowance-for-property-and-trading-income/income-tax-new-tax-allowance-for-property-and-trading-income