Misunderstanding Sole Trader - HMRC Registration Deadlines

Misunderstanding Sole Trader - HMRC...

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How long does a sole trader or Ltd Company have to register their business with HMRC from the time they start trading.

I want to know when each has to be registered so I know which to go for? Time is the issue as I have little of it, all records wil be kept when I have time but just need to know which option gives me most time bearing in mind it is going to a part time business as I have a full time job.

I am thinking soletrader option maybe better:

Note 1: As I am full time, this will be a part time business which I hope will bring in £3000-£6000 per year after a few years of trading.

Note 2: I am keeping all the outgoings receipts etc and have no income yet as I am not ready to trade yet.

Correct me if I am wrong bearing in mind I am not ready to trade yet;

I intend to start trading in 1 Jan 2014, but I will have to submit my sole trader tax return for 1 Jan 2014 - April 2014 from April 2014 onwards but my absolute deadline to submit my tax return will be 31 Jan 2015 but I don't need to register my sole trader business until 6 October 2014. I am right or have I got it horribly wrong.

Please advise

Replies (5)

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By cmiskin
02nd Nov 2013 07:42

Deadlines

If you trade as a sole trader, the deadline to register is 6th October following the end of the tax year in which you start to trade. If you intend to trade through a Limited Company I would suggest that you appoint a tax adviser as the compliance obligations are more onerous and professional advice is usually required. 

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By doublea
04th Nov 2013 13:09

Thanks CMISKIN :-)

Note 1: As I am full time, this will be a part time business which I hope will bring in £3000-£6000 per year after a few years of trading.

Note 2: I am keeping all the outgoings receipts etc and have no income yet as I am not ready to trade yet.

Correct me if I am wrong bearing in mind I am not ready to trade yet;

I intend to start trading in 1 Jan 2014, but I will have to submit my sole trader tax return for 1 Jan 2014 - April 2014 from April 2014 onwards but my absolute deadline to submit my tax return will be 31 Jan 2015 but I don't need to register my sole trader business until 6 October 2014. I am right or have I got it horribly wrong.

Please advise.

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By ACDWebb
04th Nov 2013 13:55

You may of course wish to register sooner

to cover off the Class 2 NIC's, or apply for a Small Earnings Exemption to defer those and Class 4 as you are also employed and paying Class 1.

Telling HMRC you have commenced prior to 6/10/14 is unlikely to have any other effect than to put HMRC on notice that they need to issue a return, and stop you forgetting and missing the deadline.

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By doublea
04th Nov 2013 14:14

But what if I dont get paid

Do I still need to register for class 2 NIC's or apply for small earnings exemption or class 4 if I do not take any income for myself as i want the business to grow. I don't want to take any money out of it for a couple of years to ensure it grows so dont intend to take anything other than expenses. Note: I intend to open a seperate business bank account even though I am a sole trader as I dont want to mix up all the figures into my personal account. I want clear visibility on how much I am making hence a seperate business account is important.

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By ACDWebb
04th Nov 2013 14:26

If you take the self employed route

you are taxed on profits of, not drawings out of the business

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