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.

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

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