Sole traders - getting started

caff · 16 Feb 2006 at 14:17

Anyone setup as a sole trader? I've got lots of questions for you

1. I'm looking to become a sole trader, in the evenings, running a website business. I'm wondering about how you manage your finances? (e.g. Excel, on-line banking statements, Microsoft Money etc.)

2. Should I get a dedicated business bank account? What are the benefits of having one? I know there are charges with having a business account, whereas not if I used my personal account.

3. What taxes do you pay?

4. Do you need an accountant as a sole trader?

5. Do you have liability insurance?

6. If I have a fulltime job, do I legally have to declare to my employer than I am running a business on the side?

Ok that's all for now, thanks for any help

caff · 16 Feb 2006 at 14:51

My business is ready to run (ie. I have a website setup and all the products ready to start selling).

I've done a lot of research on various websites such as the Inland Revenue and Business Link, and it seems if I can finalise some of the details of what steps I need to run a business, I'll be set to go.

I don't expect answers for everything, but if anyone has experience as a sole trader and has tips for gettings started, I'd appreciate any insights or advice.

caff · 16 Feb 2006 at 15:38

Cool thanks. Any good tips for a business bank account?

I don't need a cashcard or chequebook, just a depository to take incoming payments from PayPal. Preferably on-line banking only too, I don't need necessarily need a high street bank. There will be minimal outgoings (ie. only really merchant payments to PayPal, maybe webhosting costs)

[edit]I hold a mortgage + current account with Natwest - should I speak to them? I also have savings with Egg but they don't seem to have a small business setup[/edit]

caff · 16 Feb 2006 at 16:39

Thanks Caravan! That's some pretty comprehensive advice.

I'm having a look at Abbey - they seem to have a good approach - only charging for non-standard services. I may well pop into a branch and have a chat. I've always been impressed with Natwest too, so I'll see what they have to offer also.

caff · 17 Feb 2006 at 11:31

Thanks all, really helpful advice.

Income tax - bah - looks like I'll be taxed at 40% then - because I earn over £29k in my daytime job.

So it looks like I'll pay income tax @ 40% and a bit extra for NICs on top of what I currently pay in my daytime job.

Another question - do I pay corporation tax as a sole trader? Or does this only apply to limited companies?

Also bank account - can't see much harm having a business account as long as the fees are low / non-existant. It would certainly help keep my finances separate. I'll pop in to Abbey today to pick up some leaflets. I take it everything relating to the business like bank charges count as expenses?