Setting up as a sole trader help

**SupremeSpod** · 30 July 2010, 06:41

Originally posted by GB2408 View Post

All,

If you read my other newbie thread, this one is related. I have decided the best route for what I am doing will be setting up as a sole trader. What benefit do I get from using an accountancy company like sjd?

They offer a £30 a month package but as far as I can tell, all they do is tell me what forms I need to fill in (which as far as I can see is just the one CWF1 HMRC form), and remind me to pay my tax - But if HMRC send me a tax return form next April, why do I need to pay an accountant to remind me?

Is it as simple as:

Get contract (done)
Fill in CWF1 form (done)
Invoice the client to pay me directly (to my current account or cash account)
Keep a full record of all business expenses (will literally just be mileage and food)
Finish my contract and wait for HMRC to send me the tax return form - At which point I will declare whatI have earned in my permie position + what I have earned as a sole trader, and declare my tax deductable expenses?

Am I missing anything?

If not then there's no point paying for an accountant is there?

Thanks again for the help...

A quick question.

Are you sure that you can service your contract as a "Sole Trader"?

**Clare@InTouch** · 30 July 2010, 07:26

Originally posted by GB2408 View Post

All,

If you read my other newbie thread, this one is related. I have decided the best route for what I am doing will be setting up as a sole trader. What benefit do I get from using an accountancy company like sjd?

They offer a £30 a month package but as far as I can tell, all they do is tell me what forms I need to fill in (which as far as I can see is just the one CWF1 HMRC form), and remind me to pay my tax - But if HMRC send me a tax return form next April, why do I need to pay an accountant to remind me?

Is it as simple as:

Get contract (done)
Fill in CWF1 form (done)
Invoice the client to pay me directly (to my current account or cash account)
Keep a full record of all business expenses (will literally just be mileage and food)
Finish my contract and wait for HMRC to send me the tax return form - At which point I will declare whatI have earned in my permie position + what I have earned as a sole trader, and declare my tax deductable expenses?

Am I missing anything?

If not then there's no point paying for an accountant is there?

Thanks again for the help...

It depends on whether you need help knowing what expenses to claim, or if you're happy enough to do it on your own. You could always do the draft yourself and then pay an accountant to double check it - probably a cheaper half way option.

**GB2408** · 30 July 2010, 07:56

Originally posted by SupremeSpod

A quick question.

Are you sure that you can service your contract as a "Sole Trader"?

I have informed the agency this is my plan and he did not object but I am just going to double check with the client.

Originally posted by *Clare* View Post

It depends on whether you need help knowing what expenses to claim, or if you're happy enough to do it on your own. You could always do the draft yourself and then pay an accountant to double check it - probably a cheaper half way option.

Hi Clare,

I am used to keeping a track of expenses whilst away on business for my permie role - But for this contract role the only expenses I would have would be mileage and food.

So if I am able to happily keep track of my own expenses, and I know the correct forms to fill in for HMRC initially (CWF1? any others?) then I'm good to go? If my tax return at the year end is too tricky I always have the option of asking my Nan or Auntie to help as they have done tax returns and book keeping in the past!

**Stag Cozier** · 30 July 2010, 08:41

Originally posted by GB2408 View Post

I have informed the agency this is my plan and he did not object but I am just going to double check with the client.

Bet he comes back and says you need a limited company or go brolly. If he doesn't then I'd possible rethink about the agency

**GB2408** · 30 July 2010, 08:57

Originally posted by Stag Cozier View Post

Bet he comes back and says you need a limited company or go brolly. If he doesn't then I'd possible rethink about the agency

Just had a conf call with the client - I asked if he's happy for me to be a sole trader and his response was "No problem at all for me, that means you won't be claiming VAT right? Yeah no worries".

Do I legally need an accountant? I know you do for a Ltd company.

**Clare@InTouch** · 30 July 2010, 09:02

Originally posted by GB2408 View Post

I have informed the agency this is my plan and he did not object but I am just going to double check with the client.

Hi Clare,

I am used to keeping a track of expenses whilst away on business for my permie role - But for this contract role the only expenses I would have would be mileage and food.

So if I am able to happily keep track of my own expenses, and I know the correct forms to fill in for HMRC initially (CWF1? any others?) then I'm good to go? If my tax return at the year end is too tricky I always have the option of asking my Nan or Auntie to help as they have done tax returns and book keeping in the past!

You'll also need to register to pay Class 2 NI - http://www.hmrc.gov.uk/leaflets/se1.pdf

Go careful with expenses too, they are not always the same across the board. What you can claim as a brolly employee is not the same as you can claim as a self employed person. Food, for example, is not always allowable if you're self employed.

The Carpenter’s Lunch – Subsistence Expenses for the Self-Employed

**GB2408** · 30 July 2010, 09:09

Originally posted by *Clare* View Post

You'll also need to register to pay Class 2 NI - http://www.hmrc.gov.uk/leaflets/se1.pdf

Go careful with expenses too, they are not always the same across the board. What you can claim as a brolly employee is not the same as you can claim as a self employed person. Food, for example, is not always allowable if you're self employed.

The Carpenter’s Lunch – Subsistence Expenses for the Self-Employed

Thanks Clare. I thought I had to do the NI form but wasn't sure so I was going to contact HMRC today.

I won't be going mad with expenses. Just the basics - Mileage from home to site & return. And up to a tenner for the evening meal.

So I should go it alone? I am a comprehensive googler, I'm sure anything an accountant can tell me I can find out for myself

Seems that the sole trader route is very simple indeed.

**Clare@InTouch** · 30 July 2010, 09:13

Originally posted by GB2408 View Post

Thanks Clare. I thought I had to do the NI form but wasn't sure so I was going to contact HMRC today.

I won't be going mad with expenses. Just the basics - Mileage from home to site & return. And up to a tenner for the evening meal.

So I should go it alone? I am a comprehensive googler, I'm sure anything an accountant can tell me I can find out for myself

Seems that the sole trader route is very simple indeed.

It is simple, and you may be absolutely fine. I'd still suggest you get an accountant to check everything at least for the first year though, just to be sure - they may also point out things you're not claiming that you could, thus saving their fee in tax. You can then go forward on those principles :-)

This is assuming the agency will allow it of course, in my experience they usually refuse to deal with self employment!

**northernladuk** · 30 July 2010, 09:17

Originally posted by GB2408 View Post

I'm sure anything an accountant can tell me I can find out for myself

Seems that the sole trader route is very simple indeed.

So how come you are asking on here?

I would be wary of the that comment. Google is full of garbage as well... for example most of my posts can be found on it so that gives it a black mark for a start lol.

Setting up as a sole trader help