Business set-up: a checklist for UK Sole Traders and Partnerships

Here's a quick checklist for anyone in the UK setting up a business as a sole trader or partnership. If you're a limited company then the process is a more complicated and we'll cover that in another article.

Sole Traders

• Register with HMRC (Her Majesty’s Revenue and Customs) that you are self employed
• Decide if you are liable to become VAT registered (threshold of £67,000 08/09) and file returns accordingly
• If you employ other workers register for PAYE with HMRC and deduct income tax and national insurance contributions from their wages to pay to HMRC
• Obtain any permits or planning permissions you may need fro the local council
• Maintain records and receipts of all income and expenditure
• Calculate the net amount of profit you have made
• Complete and file an annual self assessment tax return by 31st January for the previous year ended 5th April
• Pay your income tax and national insurance contributions that HMRC inform you are due by the deadlines.

Partnerships

• Each partner registers with HMRC that they are self employed
• Draw up a ‘Deed of Partnership’ explaining what capital will be injected, how profits or losses will be distributed and what the roles and responsibilities are of each partner.
• Decide if you are liable to become VAT registered (threshold of £67,000 08/09) and file returns accordingly
• If you employ other workers register for PAYE with HMRC and deduct income tax and national insurance contributions from their wages to pay to HMRC
• Obtain any permits or planning permissions you may need fro the local council
• Display all partners names on any stationery or websites
• Maintain records and receipts of all income and expenditure
• Calculate the net amount of profit you have made
• Complete and file an annual self assessment tax return by 31st January for the previous year ended 5th April and send with your partnership accounts
• Pay your income tax and national insurance contributions that HMRC inform you are due by the deadlines.

This article has been taken from the Blevins Franks' Guide to Running a Micro-business, although it may have been edited slightly from it's original form.You can download the full guide at the Blevins Franks website.