hmrc question

[BrokenBiker]

my brother asked me this.morning, and i didn't know the correct answer so thought id ask here

do you have to have a registered business name to register as self employed with hmrc?

when i did it i registered as sole trader through duport, who are an agent of companies house. They then sent all the paperwork out, rights to the business name, form to register as self employed etc.

can he just fill out the forms and register as self employed?

 

[rtbcomp]

Just choose a name, your own is fine, as long as nobody else is using it.

If you're self-employed Companies House doesn't get involved. You only have to register with them if you form a limited company or a limited partnership.

You do have to to tell HMRC, just write to them in the form "As from dd/mm/yyyy I shall be self-employed, trading as Fred Bloggs Saggermakers Bottom Knocker".

I suspect if you want to a protected name then register it as a trademark, you can do this yourself quite cheaply, http://www.ipo.gov.uk/types/tm.htm

 

[Wallace]

No need for a trading name, the person or persons in the case of a partnership registers unless you are setting up a Ltd Company then you have to register with them first.

 

[cumbriasteve]

Yeah all I did was drop them a letter saying I was starting a small business under a name I had chosen after googling to make sure it did not exist with someone else.

If he has no experience with self employment and HMRC they run some free 1 day courses which can be really helpful, even to the point of saving you money rather than the normal belief they are out to grab every penny off you.

Because mine was a very small retirement venture and I already had full NI contributions covered, they advised me how to avoid paying national insurance if my business income was below a certain amount.

All in all I found them great with any advice I wanted.

 

[BrokenBiker]

excellent. He only wants to start up as painter decorator on the side of his current job...painting and decorating for a bit of extra cash.

so was it a bit pointless in me registering a business name as a sole trader with companies house? I think i pretty much just protected the name then informed hmrc i would be trading under it as a sole trader

 

[rtbcomp]

Exactly how did you get registered with Companies House as a sole trader?

 

[BrokenBiker]

i used one of their agents called duport. Entered the name i wanted, it checked it was free, then registered as sole trader. I then received confirmation from companies house along with all forms needed for hmrc. I own the rights to the name, was allocated a domain too.

 

[rtbcomp]

Interesting - are you sure you didn't end up with a limited company?

 

[BrokenBiker]

im definately not limited. Ill dig the papers out later but it does say on there something along the lines of registered company acting as sole trader.

out of interest, what costs are associated with being a limited company? Is it mandatory to register for vat or is that still optional up to the threshold?

 

[rtbcomp]

VAT is the same for companies as everyone else. The biggest difference is that you have to submit annual accounts and other information to Companies House which then appears in the public domain, and you have to maintain a balance sheet so that involves more time and work and possibly the expense of an accountant.

 

[zx9]

im definately not limited. Ill dig the papers out later but it does say on there something along the lines of registered company acting as sole trader.

out of interest, what costs are associated with being a limited company? Is it mandatory to register for vat or is that still optional up to the threshold?

That does not sound right, you can not be a Registered company acting as a Sole Trader, you can be / have both but they have to be / have different identities and will be treated differently for taxation and accounting purposes. I think you need to look into what has happened before you become liable for failure to supply accounts for something that does not exist, or at least get it registered as 'non trading'.

 

[rtbcomp]

^^

That's what I thought, although a Ltd Co. can trade under a different name e.g. Acme Trading Ltd. trading as Fred Bloggs. This is something you have to watch out for, you may think you're dealing with a friendly plumber and when it all goes wrong it turns out to be a limited company that folds and leaves you in the clag.

 

[BrokenBiker]

right, dug the paper work out. I have a cert stating that i am sole trader, and also a cert saying i have dormant LTD with the same name.

does this sound right?

the leaflet they gave me reckons every year i have to remind companies house that the dormant company is not trading, but i am free to trade as a sole trader and register as self employed with hmrc, which i have.

as far as i knew i was paying to register the company name in order to stop anyone else registering it, so i could use it and trade as sole trader, which i am doing

 

[zx9]

right, dug the paper work out. I have a cert stating that i am sole trader, and also a cert saying i have dormant LTD with the same name.

does this sound right?

the leaflet they gave me reckons every year i have to remind companies house that the dormant company is not trading, but i am free to trade as a sole trader and register as self employed with hmrc, which i have.

as far as i knew i was paying to register the company name in order to stop anyone else registering it, so i could use it and trade as sole trader, which i am doing

Sounds about right still I would be calling HMRC for advice, in the past I have found them very helpful they are not there to catch you out and will help to resolve any problems they uncover.
As an aside one of the guys I use as a subbie works for me as a Sole Trader but also trades as a Limited Company and has done so for the last ten years or so. All was well until he was diagnosed as suffering from MS, as a Sole Trader he was signed off by the doc. but he cannot claim any sort of benefit as he is still a director of his Limited Company even though he is not able to work at the moment. The only option is to wind up the company which he does not want to do, as he is hoping for the MS to go into remission and be able to start working again.

 

[rtbcomp]

........... I have a cert stating that i am sole trader, and also a cert saying i have dormant LTD with the same name.

does this sound right?

..........

Yes, you've protected your name by owning a company with the same name, although the cert. saying you are a sole trader sounds superflous.

 

[rtbcomp]

The only option is to wind up the company which he does not want to do, as he is hoping for the MS to go into remission and be able to start working again.

If he winds up the company and loses his job as a director he can claim job seekers allowance, after 6 months if he doesn't get a job he can become self-employed and claim working tax benefit. He can always forma new company in future if he wants to.

 

[BrokenBiker]

right, so i have protected my company name as it is a dormant limited company i.e. Non trading but i am still the director. Does this mean i can still trade as a sole trader with the same company name, as i own it? Or do i have to trade as a sole trader under a different name?

i think the cert saying am sole trader is just part of the package they give out when you register

 

[Rocketman]

You can't put limited on the end of the company name unless it is limited which each year you will be paying fees for being registered as far as I know. So I think you will have to take the company out of being dormant to use the limited company name.

Alternatively you can use the name BUT without limited on the end.

So instead of say Brokenbiker metalwork limited.
You would use Brokenbiker metalwork.

 

[BrokenBiker]

You can't put limited on the end of the company name unless it is limited which each year you will be paying fees for being registered as far as I know. So I think you will have to take the company out of being dormant to use the limited company name.

Alternatively you can use the name BUT without limited on the end.

So instead of say Brokenbiker metalwork limited.
You would use Brokenbiker metalwork.

this is exactly what I am doing at the moment, as I thought that was what I had to do.

I am not using LTD attactched to anything for the sole trader, not on any paperwork for hmrc, not on any invoices or books, not on van.

I am assuming when I eventually want to step up to operating as a limited company when I finally get enough together to leave the crap job im in now and actually get some premesis I can just take the LTD out of being dormant by speaking to either hmrc or companies house and then trading as LTD and submitting accounts annually through my accountant?

 

[Rocketman]

Yep I think that is pretty well it. It's dormant not wound-up and dead.