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Sole Trader to LTD company

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Hello, I've been doing a bit of E-commerce, and if I haven't registered yet for Sole Trader tax, but been trading as such since around August, but am now planning on registering as a LTD company for the future what order should I take the procedure?
Do I need to declare myself as a registered sole trader from the aprox August to March dates (even though there was no taxable income made but still over the £1000 gross limit), finish up with that and THEN register for the LTD company, or can I go straight to the LTD company?
 Is there some other way this is meant to be done correctly? Does the order matter? Can I just forgo the sole trader registration and non taxable amount declaration (I read there is max 3 month declaration for LTD and I've been trading since around Aug)?

Thanks


Comments

  • Bookworm105
    Bookworm105 Posts: 2,016 Forumite
    1,000 Posts First Anniversary Name Dropper
    edited 27 March 2024 at 1:44PM
    You appear to be conflating separate issues.

    The LTD is an entity in its own right, it is not "you". 
    Until the LTD comes into existence it cannot and did not have any trading income since it could not invoice in its own name as that name did not exist. The "you" aspect applies to sole trader activity declared via a personal tax return and subject to your income tax position (eg net of personal allowance).

    The 3 month time limit is simply a deadline by which you must notify HMRC that the company has commenced to actively trade (for example it is common for companies to be created and remain dormant until sold to an owners as an as "off the shelf" entity and the new owner starts trading.
    That has nothing to do with sole trader activity before the company existed.

    In simple terms you had a sole trader which appears to have had in excess of £1,000 trading income before it was replaced by a LTD. Those 2 separate activities must be declared 


  • DullGreyGuy
    DullGreyGuy Posts: 18,613 Forumite
    10,000 Posts Second Anniversary Name Dropper
    LaurenTsV said:
    Hello, I've been doing a bit of E-commerce, and if I haven't registered yet for Sole Trader tax, but been trading as such since around August, but am now planning on registering as a LTD company for the future what order should I take the procedure?
    Do I need to declare myself as a registered sole trader from the aprox August to March dates (even though there was no taxable income made but still over the £1000 gross limit), finish up with that and THEN register for the LTD company, or can I go straight to the LTD company?
     Is there some other way this is meant to be done correctly? Does the order matter? Can I just forgo the sole trader registration and non taxable amount declaration (I read there is max 3 month declaration for LTD and I've been trading since around Aug)?
    You cannot back date the creation of a company any more than you can make your date of birth earlier. So what you've been doing to date is sole trader activity and so you will have to register with HMRC as self employed as you have made more than £1,000 of revenue. 

    It makes no difference if you form the company first or register as a sole trader first, they are two independent things but the LTD cannot have traded before it existed hence both will be required.
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