We receive a number of questions here at Ascentant, both from clients and online via #AskAscentant. Here Kevin Drew, Managing Director answers some of the common queries that new businesses ask.
A – A sole trader will need to complete an annual self assessment tax return and pay tax/NI on profits. Payments on account may be required to pay tax twice a year in January and July depending on the amount due.
A – You should register with HMRC for a UTR number when beginning self employment.
A – You cannot register a company name as a sole trader, however you can choose a trading name to trade under. You should check that you are not infringing on a trademark or passing off another named business.
A – Inn the event of a legal dispute, you will be sued personally unless you have suitable insurance. You and the business are the same legal entity.
A – If looking for a loan or business finance, you and the business are the same entity. You will therefore need to offer a personal guarantee against any business credit or finance.
A – You can withdraw profits from the business, but it is not classed as remuneration as you are not an employee.
A – You will be able to claim a deduction for mortgage interest, rates and light and heat if you have an office at home.
A – You can claim capital allowances on the purchase of a computer, but mobile phones will be subject to a private usage adjustment. You will be able to claim tax relief on expenses incurred wholly and exclusively for business.
A – Generally a self assessment tax return will cost around £100+VAT and production of a set of financial statements or accounts in the region of £200 – £300.
Ascentant are Bookkeepers, Accountants and Business consultants. We are based in Derby with an office in London.