Do you HAVE to register as a business?

[RnBlood]

I am in the process of setting up a website which offers a service (payment taken by credit card). What I need to know is do I have to register as a business and set up a business account and all that? Or can I just be a self-employed individual?

Hi, you are required by law to register your business with the Inland Revenu, I think you have three months from the date of trading to do so. If not, you risk a big fine.

You can register as a sole trader, or partnership, whatever really.

You should probably think about opening up a business bank account, your bank would get uspicious if you had large numbers of cheques going into a private account. You ahould be able to get ree business banking from most of the main banks, at least for the first 6-18 months. Avoid natwest though, because once they do start charging, it's very expensive!

Good luck with your busines venture!!

Many banks do free banking for first year, some do permenant free banking but many restrictions apply such as Abbey

Its the inland revenue you have to register with and you may have to pay NI.

I would visit your local business advice place they often run day courses in the bascics to get you started but you can just book a visit with an adviser who will check that you have done all the legal things you need to.

You will also have to fill out your self assesment form each year even if you earn under the threashold for tax you have to prove it, as a sole trader you personal tax allowance will apply and will be split with any other jobs you have.

thanks very much! So I must register with the IR, but must I register with Companies House, or is that the same thing?

RnB - you only need to register with companies house if you are setting up a limited company - in which case you will need proper financial and legal advice.

If you want to set up as a sole trader, then you simply have to register with the inland revenue. They will send you some info about being self-employed, and you will begin paying NI contributions (just over £10 per month). You will need to tell them the first day of trading, and will have to complete annual accounts and tax returns from then on.

Also, if setting up as sole trader, you don't need separate bank account at all. DH and I (both sole traders) save a fortune in mortgage interest because we bung loads of money in there (flexible account) during the year and then take it out again when the tax man wants paying twice a year! As long as you keep adequate records of which payments relate to business then I can't think of any reason to get a separate account at all.

You can but different kinds of account books in WH Smiths "The Best Small Business Account Book" is very clearly laid out and will remind you of everything you need to put in. (There are VAT and non VAT ones and 2 types depending on type of business). If you know about accounts you don't need these but as a novice I found them very helpful.

Remember record all your business expenses as this will all help to reduce your on paper profit margin which is what you pay tax on. Things like your milage when picking up stock even though you maybe were going that way anyway make a big difference.

yes - you can be self employed as everyone has said, and you can use your normal bank account (I did).

But you should see an accountant anyway - the IR will send you leaflets and such, but if they forget to send you anything you are liable for any mistakes that arise. I know this from personal experience: "the IR don't make mistakes".

I think unless you are trying to get a business loan or grants its not nescesary. I would have gone for the Abbey business account if I hadn't needed chage for floats and stuff. Its free but they don't deal with you in the branch and resricted on what kind of transaction they do.

I am with The Royal Bank of Scotland, it was free but now I get charged for Direct Debits and cheques, well everything. I may change to Abbey as I tend to keep float at home anyway and bank the notes so it might suit me more than I thought.