Starting up a Business as Sole Trader

[Woolley1]

Hi,

I am currently employed full time but have also just started a new business working evenings and weekends as a sports coach.

I am looking for various advice on the below questions to get my business as a sole trader set up properly.

At the moment I'm unsure how this new business venture is going to go re income etc.


1 - How do i go about registering my business name as a sole trader?

2- Do I need to register with HMRC now or wait till I know I will earn over £1000 in a tax year?

3- Is the £1000 limit for self employed after any expenses or is it just on total income?

4- I would like to open a seperate bank account for this business can I apply for a business account now or do I need to want till I have a few months trading to prove my business name etc?

5-As this is only a small business at the moment I would still need to keep a set of accounts does anyone have a google sheets template to run simple accounts?

Sorry for all the questions but justing wanting to get everything set up properly before I really get the business up and running to hopefully make it is easier in the long term.

 

[fisicx]

Don’t need to register anything. You just start doing your thing.

A business bank account will be needed but not a necessity right now. You just need to be very strict in your accounting. The high street banks won’t want to sign you up so try the challenger banks.

There are loads of online accounts packages you can sign up for. QuickBooks is ideal for someone like you.

 

[Banksbroo]

As fisicx said, be very strict in your accounting. Keep good records. Record all receipts (don't get smart and try to put through anything that isn't strictly business, it will come back to bite you!). Issue proper invoices. Make sure you get paid.
If you are self employed, consider any potential liability if a customer makes an injury claim against you. Do you have recognised coaching qualifications? Are you part of a recognised sports governing body? If you are you working with under 18s or vulnerable groups - there is a set legal requirement for these situations. One of the reasons organisations offer people "self-employment" is to avoid their own liabilities, and pass all the liability over to someone else. In many situations it is far simpler and safer to get the employing organisation to just employ you as a casual or temporary employee, then all the legal liability and accounting is dealt wit them, and you can get on with the bits you enjoy!

 

[Paul Kelly ICHYB]

1 - How do i go about registering my business name as a sole trader?
You will need to visit the IPO and register there, however, at best it is a few hundred pounds and, if challenged, it could costs a lot more.
Probably best to not worry about it for the moment

2- Do I need to register with HMRC now or wait till I know I will earn over £1000 in a tax year?
Whilst you do not need to register until you hit £1k IN SALES, if you do not think you will make that much, starting this business might be awaste of your time. Have confidence and register!,

3- Is the £1000 limit for self employed after any expenses or is it just on total income?
Sales

4- I would like to open a seperate bank account for this business can I apply for a business account now or do I need to want till I have a few months trading to prove my business name etc?
Use one of the new online banks and get a normal or self employed account. The bank might use you business name as a t/a (trading as), but the account is in your name

5-As this is only a small business at the moment I would still need to keep a set of accounts does anyone have a google sheets template to run simple accounts?
If there are only a few transactions, this will be fine, however, many of the newer bank accounts let you keep records on their platform which you then download (so getting an account asap is important).

Best to ask the questions now rather than when it is too late.

BTW, after a few months of trading, consider speaking to an accountant - at tax return time they will probably save you more money than they cost (couple hundred pounds)

 

[Woolley1]

1 - How do i go about registering my business name as a sole trader?
You will need to visit the IPO and register there, however, at best it is a few hundred pounds and, if challenged, it could costs a lot more.
Probably best to not worry about it for the moment

2- Do I need to register with HMRC now or wait till I know I will earn over £1000 in a tax year?
Whilst you do not need to register until you hit £1k IN SALES, if you do not think you will make that much, starting this business might be awaste of your time. Have confidence and register!,

3- Is the £1000 limit for self employed after any expenses or is it just on total income?
Sales

4- I would like to open a seperate bank account for this business can I apply for a business account now or do I need to want till I have a few months trading to prove my business name etc?
Use one of the new online banks and get a normal or self employed account. The bank might use you business name as a t/a (trading as), but the account is in your name

5-As this is only a small business at the moment I would still need to keep a set of accounts does anyone have a google sheets template to run simple accounts?
If there are only a few transactions, this will be fine, however, many of the newer bank accounts let you keep records on their platform which you then download (so getting an account asap is important).

Best to ask the questions now rather than when it is too late.

BTW, after a few months of trading, consider speaking to an accountant - at tax return time they will probably save you more money than they cost (couple hundred pounds)

Thanks for the replies so far.

Any suggestions on a online bank to look for for a sole trader like you have suggestions.

 

[DontAsk]

You should open a business account, not another personal account. As a sole trader, you and the business are one and the same legal entity but most personal current accounts prohibit use for business. You do not want to risk being caught and de-banked by your current bank.

I would approach your current bank and ask to open a business account for a sole trader.

 

[Paul Kelly ICHYB]

You should open a business account, not another personal account.

You are correct, ideally, do this.

 

[fisicx]

I would approach your current bank and ask to open a business account for a sole trader.

It’s increasingly difficult to do this. The high street banks don’t want to open accounts for new businesses. The challenger banks are often the only option.

 

[Paul Kelly ICHYB]

I would always choose a separate bank - never have business and personal in the same place.

 

[DontAsk]

I would always choose a separate bank - never have business and personal in the same place.

I find it's much easier to transfer (e.g. salary, directors loan) between accounts at the same bank, at least with Santander.

 

[Paul Kelly ICHYB]

Interbank transfers are easy and quick nowerdays.

 

[fisicx]

I find it's much easier to transfer (e.g. salary, directors loan) between accounts at the same bank, at least with Santander.

With open banking you can have accounts from different banks on the same app. Making transfers is a doddle.

 

[Newchodge]

I find it's much easier to transfer (e.g. salary, directors loan) between accounts at the same bank, at least with Santander.

Yes. but if, as some new businesses do, you have finmancial problems, if both accounts are with the same bank (or even banking group, I think) they can take money from one acount to pay into the other, without your permission.

 

[DontAsk]

Interbank transfers are easy and quick nowerdays.

Of course they are. My point is it's even easier (less clicks) when I transfer between my accounts at Santander.

 

[DontAsk]

Yes. but if, as some new businesses do, you have finmancial problems, if both accounts are with the same bank (or even banking group, I think) they can take money from one acount to pay into the other, without your permission.

Sorry, I wasn't clear that my business account is for a Ltd, so a different legal entity. What you say is probably true for a sole trader.

The point about ease of transfers still stands, however.

 

[Paul Kelly ICHYB]

Yes. but if, as some new businesses do, you have finmancial problems, if both accounts are with the same bank (or even banking group, I think) they can take money from one acount to pay into the other, without your permission.

and that is why I recommend different banks....

 

[Woolley1]

Can anyone recommend a free and easy to use accounts software they I could use for this small start up business.

 

[eteb3]

Can anyone recommend a free and easy to use accounts software they I could use for this small start up business.

Any free spreadsheet software (I like LibreCalc, but Gxxgle Sheets works too)

Columns:
Date Item £in £out

Then ask an accountant how to classify it all. If it’s as small a biz as you say, it’s pointless learning any accounts software imo: you’ll be much better just getting the customers in at this stage.

 

[eteb3]

Any suggestions on a online bank to look for for a sole trader like you have suggestions.

My other half is a freelancer and likes Starling a lot. It’s online only but will take cheques by post. Never had an issue with it

Re invoices, if you issue these then stick to the rules: https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

Carbonless invoice book or receipt book might be useful depending on your style/ if you take cash. A few quid at the post office . Or I think Starling app will do you a pdf one linked to the account, so you can see if it’s paid

 

[Newchodge]

Quickfile is free until you hit the tranaction limit.

 

[Woolley1]

I have now opened a sole trader business account with Starling.

I will be taking a mixture of bank transfer payments and cash.

Can I keep the cash and just make a transfer of the same amount from my personal account into my business account?


Is it a legal requirement to issue invoices to all my customers as I know none of them will want an invoice?

 

[eteb3]

Is it a legal requirement to issue invoices to all my customers

No. Generally only needed if selling on credit. You should still record who pays you and exactly for what, for your own & HMRC purposes - so a receipt book can be handy, even if you never hand the receipt over.

Can I keep the cash and just make a transfer of the same amount from my personal account into my business account?

I’d be interested to know what the accountants say, but that’s what I’d do. Best really is to stack it up and pay over the counter weekly/monthly. possibly Starling will let you do that at the PO?

Recipe for disaster is to make payments out of the cash, not out of the account. Your system would avoid that, so great.

 

[Lisa Cummings]

Thanks for the replies so far.

Any suggestions on a online bank to look for for a sole trader like you have suggestions.

Tide bank are excellent, no monthly fees just 20p per bank transfer, can attach receipts with bank use in app, send invoices