richard thomas
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| posted on 17/8/15 at 10:13 AM |
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Start up as sole trader
Anyone done this and have any golden nuggets of advice please? I'm looking to start up as a car trader/repairs/sales/restoration/other on a low
volume scale with no premises, working from home.
I have been online and it seems far too simple to set up - online register for £170 with companies like Duport etc, register with HMRC, get some
insurance, trade plates and off to go.
Am I missing something?
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kingster996
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| posted on 17/8/15 at 10:26 AM |
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Depending on how much money you will make - might be worth going Limited. Much better tax regime once your earnings get reasonable.
I used to be indecisive, but now I'm not so sure
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richard thomas
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| posted on 17/8/15 at 11:02 AM |
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quote:
Originally posted by kingster996
Depending on how much money you will make - might be worth going Limited. Much better tax regime once your earnings get reasonable.
I did consider, but I feel that my financial liability will be very small so not too worried about that - I only anticipate a low turnover to start
off with, bit of a sideline business so to speak......
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Slimy38
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| posted on 17/8/15 at 11:07 AM |
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You might need planning permission to change the use of your house to business premises. And I thought trade plates were extremely expensive, or at
least the insurance behind them is?
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kingster996
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| posted on 17/8/15 at 11:36 AM |
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quote:
Originally posted by Slimy38
You might need planning permission to change the use of your house to business premises.
I work from and run my business from home - I just sorted the insurance out. Mind I am in IT rather than anything 'physical' so might be
different.
I used to be indecisive, but now I'm not so sure
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coozer
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| posted on 17/8/15 at 11:54 AM |
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I went limited, agencys wont touch sole trader as the tax liability stays with the client.
Limited means tax liability is with the company and you as the director.
Only £30 to register as a limited company at companys house and nothing else! Cost of trade plates are tax deductable as is everything you buy or use
for the company.
The other thing you need is a very tax savvy accountant.
1972 V8 Jago
1980 Z750
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pewe
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| posted on 17/8/15 at 12:11 PM |
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All the above is sound advice.
Given you're providing a service where safety is fairly important I'd say you need to go limited.
The clue is in the word limited.
In the hopefully unlikely event there's cause for a claim against you your liabilty is limited.
That's not to say you're able to duck responsibility but safeguards your house etc. which could go if it all went tits-up as a sole
trader.
Also consider registering for VAT. It not only means you can reclaim the VAT on your inputs but also gives more credibilty to your business and the
on-line quarterly returns are as easy as car tax.
Having the ability to accept credit/debit cards is almost essential.
As has already been said employ a good accountant and keep to the straight and narrow as far as cash, records etc. is concerned. HMRC are pretty
understanding if they can see you're straight, complete barstewards if they sense you're on the fiddle.
BOL, Pewe10 
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Slimy38
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| posted on 17/8/15 at 12:21 PM |
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quote:
Originally posted by kingster996
quote:
Originally posted by Slimy38
You might need planning permission to change the use of your house to business premises.
I work from and run my business from home - I just sorted the insurance out. Mind I am in IT rather than anything 'physical' so might be
different.
Same here, I did contracting many moons ago and my business address was my home address. As you say it's more significant with
'physical' jobs, for example if some nosy neighbour decides they don't like the number of cars that turn up on your doorstep. I just
know from previous friends experience about garages being run from home where they've been reported and things have got very awkward.
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Charlie_Zetec
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| posted on 17/8/15 at 01:21 PM |
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Running my own company, I can indeed confirm that Limited is the way to go. I would advise going to speak with an accountant at earliest available
opportunity to get their perspective on things, especially when it comes to VAT etc..
I was advised that you shouldn't have to be VAT registered until your company income exceeds circa £75k or unless you are buying and selling
goods on a long-term basis.
I have my home address registered as company HQ, but it didn't affect my house insurance as it's not a physical job, merely an office -
therefore you shouldn't have to take out an specialist insurance for that reason. As for change of use, unless you're planning on
changing your downstairs into a workshop, then no need - it's still your house, you just happen to be working from there.
Out of courtesy to neighbours I would suggest you have an informal chat with them if you intend to buy a lot of "do-er uppers" and will be
spending plenty of time on them, or plan to have a car lot on the front driveway, just to make them aware and try to keep them on side. You should be
aware that if you intend to do servicing etc. on vehicles as part of the services offered, then you always run the risk of a visit from the
Environment Agency to check you've got the correct waste permits etc. and are disposing of things in a responsible manner. But assuming you
don't pour waste oil down the drains in view of your neighbours, what happens behind closed garage doors stays that way.... *
* [I am in no way suggesting you do this, but dispose of all waste materials in the correct manner. But if you work behind closed doors, people have
little reason to suspect foul play unless you give them suspicion.]
Plenty can be offset against the company as well, including proportion of home bills including heating, phone/internet, mobile, corporate insurance
etc., plus any IT equipment of sundries you may have to purchase.
Again, speak with an accountant, who will be able to tell you what's what, and theoretically save more than their annual cost if they're
any good.
Been doing my work for 4+ years, which is probably less than some on here, but feel free to PM me if you have any questions, and I'll be happy
to try and answer them for you!
Artificial intelligence is no match for natural stupidity!
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richard thomas
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| posted on 17/8/15 at 01:49 PM |
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Only looking to trade cars one at a time, with a resto ongoing in my garage......so very quiet business......to start with anyway.....
I think I have already upset a neighbour with the beetle bodyshell on my driveway whilst the floorpan is in my garage being sorted......was told
somebody turned up in a car, took some pics and drove off so I can only imagine it's the Environmental people.......
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Volvorsport
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| posted on 17/8/15 at 02:24 PM |
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doesn't everybody have a stripped car on their front lawn in bridgend ?
only joking ...
all good advice above , and wish I got some of that from the HSBC when I started .
try only to do jobs that you've got the tools for aswell , otherwise cashflow will suffer , but don't expect to earn loads of money from
it either ...
www.dbsmotorsport.co.uk
getting dirty under a bus
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richard thomas
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| posted on 17/8/15 at 03:41 PM |
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Hoping to scratch a living doing something enjoyable for a change......no big boss and all.......bit of fixing up and a couple of trades here and
there should be do-able I hope......got most tools now - accrued over the years, weld kit, plasma cutter, comp air and tools....pity my garage is a
bit cramped.....
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TimC
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| posted on 17/8/15 at 07:45 PM |
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Have you hired eagle-eyed Lyn as QA Technician?
Good Luck Mate.
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richard thomas
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| posted on 17/8/15 at 07:56 PM |
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quote:
Originally posted by TimC
Have you hired eagle-eyed Lyn as QA Technician?
Good Luck Mate.
Not yet, I was hoping he would offer his services for free 
Cheers Butt
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Brook_lands
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| posted on 17/8/15 at 08:42 PM |
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You shouldn't be paying anyone to set up as a sole trader - you decide you are going to be a sole trader then that's that.
If you don't already do an income tax self assessment for HMRC then go on line and register to do it on line. Slightly more complicated if this
is you only activity/ income where you will need to inform them that you are self employed.
Keep records of expenditure and income related to your trading activity and declare it when you fill out your self assessment.
For any trading you do between now and the 5th April 2016 it will need to be accounted for on your self assessment form which if done on line needs to
be completed by end of January 2017 and any additional tax paid by 31st Jan 2017.
As a sole trader there is no need to keep trading income and expenditure separate from your other money, eg income can be paid into your personal bank
account although you may want to think about keeping it separate for admin purposes.
Think carefully about the liability, as the trading activity and you are one and the same then your personal assets can become a target for anyone
making a claim, OK maybe you think it unlikely to be something you can't handle but you need to give it some consideration.
Setting up a limited company takes about 30 mins on line on the companies house website and costs £14 or £15.
Because the company is a separate entity to you it will need a separate bank account in its own name and you will have to keep your money and the
company's money separate.
Once the company is set up you have to notify HMRC within 3 months of it starting to trade. That is within 3 months of it spending or receiving money,
not 3 months from when it was set up. You can set up a company now and leave it sitting there (called dormant) until you want to start trading through
it.
The minimum requirements for a company is that they complete an annual return to companies house once a year, cost £13 and about 10 min on the
computer, and submit a set of accounts, again can be done on line at no cost or a good accountant will do it for £200 - £250 if you give them all the
info in an easy to read spreadsheet.
You have to register for VAT when turnover exceeds (or is likely to exceed) £82,000 per year. You can register for VAT before you reach this level
which means can claim back the VAT on most business/trading expenses but then you have to charge VAT on your services and pass this onto HMRC every 3
months. If you are mostly selling to businesses who are also VAT registered and can claim the VAT back then whether or not you charge VAT is not an
issue. If you are selling to Joe Public then that extra 20% could be an issue, as well as the extra paperwork.
There are also added complications regards VAT on 2nd hand goods and for businesses selling into Europe.
As said the insurance situation needs careful consideration, public liability insurance, affect on your personal car insurance when you tell them you
are a motor trader, buildings and contents insurance (some insurers will not insure a domestic house at which a business is registered even if no
business activity takes place at the house).
There are some tax advantages to operating though a limited company but the government are onto this (well the government created them in the first
place) and from next April there are one or two changes to taxation that will reduce that advantage a bit and I'm sure over the next few years
more changes will be made "to harmonize taxation" across the those on PAYE, Sole Traders and those working through Ltd companies.
You need advice based on your personal circumstances and likely volume and type of activity. Doing up one car at a time where that car is registered
in your name after which you decide to sell it is probably a hobby (assuming you are only doing a handful a year) having half a dozen cars park
outside for repair/ servicing everyday and you have no other job its a business. Somewhere between the two it stops being one and becomes the
other.
[Edited on 17/8/15 by Brook_lands]
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dilley
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| posted on 17/8/15 at 09:04 PM |
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I've been self-employed since 18, now at 35 I'm almost retired, if you're interested, send me a u2u with your number and we can
talk..... I've had several ltd companies, dealt with vat registration etc. I'll offer help where I can. it's nice to see someone
thinking of not following the Heard!!! Oh yes, I'm a qualified mechanic to NyQ 3 plus, qualified financial and mortgage consultant, cemap 123,
cefa 123..... I'm here if you want real experience.
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