Setting up as a Sole Trader???

[ItsTony]

Hi,

Just wanted to ask anyone who knows better if what I'm doing is correct. I'm about to start a business and set up as a sole trader. I will also be employing one member of staff.

I've already applied for a business bank account and sent of all the signed documentation, so just waiting for them to get back to me. I have use of a warehouse and I'm covered for all the correct licenses and insurance etc.

Now, for me to set up as a sole trader, do I need to fill in this form below and get it back to the inland revenue.

http://www.hmrc.gov.uk/forms/cwf1.pdf

and then, for me to register as an employer, do I just need to fill in the form below. (Also, how can I set up a PAYE from my business bank account to his personal account, so all tax and NI contributions are paid directly to the revenue - is there software for this???)

https://online.hmrc.gov.uk/shortforms/form/EMPREG_...

Also, by registering myself as self-employed, will the business not also need to register with the local council or anything like that too.

How long does it tend to take to set all this up and can I trade before all this is set up. I keep reading and people tell me different things so if anyone can give me some solid guidance, that would be great. Also, if theres anything else I should know, please share

Thanx

Edited by ItsTony on Monday 16th February 11:34

[Smiler.]

Have you got an accountant? That would be my first task (indeed it was when I started as a sole trader).

You will need to notify HMRC of your change of employment status

As for the HMRC on-line services, I think this is for registering for on-line returns & the like. It takes a couple of weeks to register & get all the passwords etc. It can't calculate Tax & NI ('ees & 'ers) for you, nor make payments.

You can set up payments to your employee via on-line banking if you have it, but the amounts usually vary so it will need to be done manually.

You must make payments to HMRC with a dedicated account number for an employer, all of which results from your registration. Again, can be done manually with on-line banking.

I would strongly recommend you get or speak to an accountant. A good one can do all the returns & produce payroll info for you.

Mine charges about £450 per annum for accounts & £160 for payroll.

Good luck.

[Eric Mc]

There are plenty of payroll packages out there which will take most of the headache out of calculating PAYE, NI and Net Pay for your employees. I use Iris Paymaster which I find very easy to use (but then again, I am an accountant).

Please note that, from tax year 2009/10, the annual returns made by an employer after the end of the tax year will ONLY be allowed to be submitted electronically - so you will really not have any choice but to carry out your payroll calculations using some sort of dedicated computer payroll system.