If you are considering following your business dreams and setting up as a sole trader, there has never been a better time to take the plunge. The Internet holds a wealth of information that can help you to find clients and learn how to run a business effectively. At the same time, being your own boss is one of the most liberating things you can think of. You will be earning money by yourself and for yourself, and there’s no better feeling than that. In order to become a legitimate sole trader, there are a number of things you will need to put in place to make it a reality. Here are 5 tips to help you on your way:
- Register Your Business
The first thing you will need to do when setting up your business is to register with HMRC for tax purposes. By getting this done straight away, you can avoid any costly fines further down the road, which could spell disaster for your business.
- Tax Assessments
After registering your company, you will need to remain on top of your yearly self-assessments for tax and national insurance. It is important to bear this in mind from the start, as well-kept books will make the whole process far easier when it comes around. You should also hang onto any business receipts you have for purchases related to your work, as you may be eligible to claim tax back on these, which could end up saving you a fortune. If you’re not good with numbers, then accountants come relatively cheap who can deal with your tax assessment for you.
- Set Up Insurance
You will also need to set up the appropriate sole trader liability insurance from the start to ensure that you, your equipment, your clients and anything else related to your business is covered in the event of an accident or problem. Issues can come in many forms – some avoidable and some not – which is why it is so important to be prepared for the worst. In the absence of insurance, a costly legal suit or irreparable damages can spell the end for a company.
- Set Up Business Banking
You will also probably want to set up a separate business account with your bank. This not only allows you to keep your personal finances separate, but also may allow you to take advantage of specialised business deals and loans. It will also make it easier when it comes to making business purchases or receiving payment from clients.
- Inform Your Mortgage Provider
If you are working from home, what many people don’t realise is that there is a requirement to let your mortgage provider know. So long as your work will not affect the interior or value of your home in any way, this should be easily approved.
Setting up a new business can seem complex, but once you have these essentials in place you’ll be well on your way to being a fully-fledged sole trader.