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What is a Sole Trader? |
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Business Formation
Sole Trader
Partnership
Limited Company
Limited Liability Partnership
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About CYB
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Being a sole trader is ofter the first step onto the business ladder for most people. Its the easiest business to set-up, no forms to fill in apart from a declaration to the Inland Revenue stating that you are self-employed.
The big disadvantage of being a sole trader, is that YOU are responsible for any debts run up by your company, or any liability for work you do, unless you take out specific insurances to cover this. Imagine running a computer repair business as a sole trader and you accidentally destroyed a customers valuable data? How would you cope with the threat of being sued? If you are worried about this aspect, think about forming a limited company.
There is no limit as to how big you can grow as a sole trader, although if you are turning over more than £30,000 you should seek advice from you accountant about using dividends to save tax.
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Declare that you are Self-Employed
Make sure you declare that you are self employed by completing the form CWF1 using this link here: http://www.inlandrevenue.gov.uk/forms/cwf1.pdf
Remember, even if you earn money by buying and selling on ebay in addition to your normal employment you still need to register with the Inland Revenue.
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