Sole Trader + Dormant LTD?

[tpstudios]

Hello

I have just recently registered with the HMRC as a sole trader and now I found an US manufactur for the products I normally sell on eBay and could buy the items directly from him. However as he's in the US he asked me to fax him my business License and as I know there is no such thing in the UK as a sole trader. Now I was told I could just buy a LTD company or make an Dormant LTD as this would provide me with company ID/#.

As I would like to continue to sell as a sole trader I did a bit of research on the internet and so far found those 3 pros and 1 contra for opening an dormant LTD

Pros.
1: Having my business name registered with the companies houses. My name is protected so no other busines could use it in the UK
2: Being able to finally buy directly from US/non US companies which require Business Licenses
3. Having an official Business. More Professional

Contras:
1. Having to fill tax return forms to the companies houses even if the LTD is dormant + having to send self assesment forms back to the Inland revenue as I would still trade as a sole trader


That said It seems to have mainly positive features for my business rather then negative ones. But as those are my Pros / Contras which I googled up myself I think that there is alot more to it than this.

Now would it be easy going to open up a Dormant LTD and continue as a sole trader? I was told while I registered as a sole trader on the phone that its not necessary for me to have an accountant as the self assesment would be rather easy to fill out and found the same statement on several business advice websites aswell. Now that I would open a Dormant LTD I know I still have to submit my tax return forms to the companies houses even if the LTD is dormant but would I just fill out NULL everywhere since there is no trading going on with the LTD? Could this then be done by myself (with a bit research) aswell as I believe I dont need to fill out tax/PAYE/profit etc.. since the LTD is dormant or would I definitly need an accountant for the dormant LTD? As sole trader I would probably make about 5k - 7k profit per year so this just as an info. I was also considering to go as a LTD and stop trading as a sole trader but since april this year I believe even companies with less then 10.000GBP profit have to pay cooperation tax of 19% so I think with low profits like mine its rather better to be a sole trader then a NON-dormant LTD.


I would really appreciate any help/advice/tips/tricks/infos/links regarding my post and I hope my post was understandable as Im still working on my english you have to excuse some misspellings

 

[Joyous]

However as he's in the US he asked me to fax him my business License and as I know there is no such thing in the UK as a sole trader.

I assume you mean “there’s no such thing in the US as a sole trader” as in the UK the number if sole traders far exceeds the number of limited companies. Is it not possible to educate your proposed supplier with this fact? I presume he just wants the comfort of confirming your business status. Do you not have headed paper, a website or anything else that can satisfy him.

If you form a limited company and provide him its details then any agreements you make with the US supplier will be with the limited company. As such the company will not be dormant and you’ll have to prepare full statutory accounts.

Just trying to point out that the possible consequences of forming a limited company.

Regards

Joy

 

[tpstudios]

sorry I meant to say "there is no such thing in the UK for a sole trader"...as in there is no business license available for sole trader.

well I have told the guy first that I dont have a business license because it doesnt exist over here and told him I could fax him my letter from the tax office with my UTR on it (once it finally arrives ) and then we went on talking about the products im interested in..but then yesterday came this email asking me to fax him my business license..the guy doesnt seem to understand me properly and I tried to explain it several times before but now I just give up and thought about opening the dormant LTD. As I thought it would be worth it since all products I sell on eBay I could now buy from the manufactur directly instead of buying them through 3 different sources. I had a feeling it would be like as soon as I mention my LTD so he can have a look on the companies houses website its not dormant anymore..But I thought maybe if I buy from him as a sole trader, pay with my sole trader business bank account and receive the items in my sole trader name and just give him the LTD infos just for his satisfaction...

I do understand his position because I'm myself from a country where you would have to get a business license as soon as you start a business even if it would be something like a sole trader. I was quiet suprised as I was told that there is no business license or confirmation for sole traders and that its sufficient for most UK wholesalers to show your business card or letterhead. So until I heard about this I would also have acted with suspision if I was a wholesaler and a customer just wanted to buy something showing his business card. I give it a try with showing him my website tho..maybe that will help.

Where do people get information about sole traders? I mean for informations about LTD's you just go to the companies houses website and lookup the LTD in the search enginge. Is there such a thing for sole traders aswell? I read somewher that you could call up any tax office in the UK and they would provide you with information about the sole trader? Maybe I could tell him to call my tax office so they could confirm him that im a business? So I guess a dormant LTD wouldnt be the way I should go, right?


thanks

markus