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

FreeAgent Guest Blog

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 was guest authored by Blevins Franks. To find out more about them, visit the Blevins Franks Website.

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