Becoming a business.

[Riejufixing]

Should one become a business, i.e. a sole trader in something (fish?) what are the approximate set-up costs, assuming that the setting-up can be DIY'd? Are there on-going costs? Assuming that the business does no business, what happens about costs then?

[Ste]

yes.

[Easy-X]

Unless your annual turnover is enough to interest the VAT man then not worth the bother vs. self employed.
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[Diggs]

Strange question.

If you 'trade' and earn more than 1k per year from it, you have to register for self assessment and NI, so you are a sole-trader. This doesn't cost anything to do and you can do it yourself by simply sending a form to HMRC. The only cost as such is in preparation of a set of accounts each year. See an accountant.

Is the question you meant to ask - should I operate as a Ltd Co rather than a sole-trader?, in which case it all depends upon the business you are in and whether you want to pay just yourself, or want to take advantage of someone else's unused tax allowance. See an accountant in this instance.

I don't see why someone would register for self assessment if they don't trade. Unless that is, they don't pay NI currently and want to top up their years by paying Class 2. Not sure how HMRC would view this though...
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[Riejufixing]

[Easy-X]

Over the years I've been self-employed and a company director... what do you want to know?
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[Riejufixing]

[Nobby the Bastard]

You can loan the business the setup costs and the business can then repay the loan when profitable.

As far as I'm aware no tax is payable on this as its repayment of a loan.
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[martin734]

[Diggs]

[BanditsHigh]

I've just created a company (well it'll be tomorrow) and all for the princely sum of £13.59.

Registered with companies House and both .com and .co.uk domain names as well ... will obviously need to pay more in a years time for the domain names, but that's par for the course.

I'll leave the company status as DORMANT for now ..... only when I do what I'm thinking of doing, will I make the company active .......... so no ongoing costs or action required until that happens.

I have the company name and domains now, so even if I decide not to actually carry out my plan, it hasn't cost me a lot of money

[mentalboy]

As someone else who traded both as a sole trader and director of a Limited company, I'd like to add that those are not your only two options.
Your decision about which way to go should primarily rest upon how much personal stuff you have at risk if you fuck up, whether you are a mostly service orientated provider, and whether you are going to hit the VAT threshold.
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[Easy-X]

The actual paperwork: very simple. Plenty of websites out there will do you "a company in a box" where they automate all the initial filing for you. After that, if you don't turn over much, you get a small business exemption where you don't need to file anywhere near as much detail on the end of year accounts which equals cheap fees from your accountant...

On that I wouldn't recommend not having an accountant, i.e. why buy a dog and bark yourself.
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[mentalboy]

[panrider_uk]

And any decent accountant will save you more than they cost you - if you're trading.
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[Freddyfruitba...]

The original question is completely redundant without more information.

Using me as an example, I work from home as a freelancer, which is how I earn my income, ie just using my brain. I started out years ago doing it part time; I had no outgoings whatsoever as my only 'tool' was the computer I already owned. Nevertheless I was still a sole trader (and filled in my income on a tax return) so the answer to the OP's question is potentially and quite realistically 'zero'.

As I got busier I used an accountant (just one year) who told me about the stuff I could set off against expenses (which were pretty minimal in my case), such as depreciation of computer, internet/phone use of home as office etc. So the accountant was an 'expense' that year... in subsequent years I just did it myself and saved his fee, using the first accounts as a template (my business was extremely uncomplicated).

Latterly though I set myself up as a Ltd company, I always use an accountant, and although my work is basically the same my situation is very different; and I am by HMRC definition no longer a sole trader.
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[colink98]

[A100man]

'Sole' trader in 'fish'..

I geddit..
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[Freddyfruitba...]

Can I just reiterate - a "sole trader" and a "limited company" are legally mutually exclusive, ie the OP will be one or the other (or maybe a partnership?), but definitely not some weird hybrid of the two. If the OP is confused about the terminology he needs to clarify which he means; alternatively if he definitely means "sole trader" then all the replies going on about Ltd companies are completely irrelevant...
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[Easy-X]

AFAIK your choices are:

Self-employed
Sole Trader
Partnership
Private Limited Liability Partnership (LLP)
Private Limited Liability Company (LTD)
Public Limited Liability Company (PLC)

For a small scale business you'll be paying set up costs and an accountant at least annually for all but the first one (although a friendly accountant is still recommended.)
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[Ribenapigeon]

[thx1138]

I'm a registered sole trader with HMRC. It's pretty easy doing the tax returns overall.

First 2 years, accounts were super simple.,

Starting to get ever so slightly more complicated, but I don't think I'll be needing an accountant any time soon.

[colink98]

if the OP wants to get into the fish business this might help

https://www.youtube.com/watch?v=j4hpkBrX2Kw
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[bhinso]

OP should go into business selling fish as wipers for visors when it's raining.

[mentalboy]

If fishing is the business then you may just as well ignore all the advice on this thread and go speak to a fisherman - their rules are totally different.
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