The lovely Liz at MoneyBee has created this amazing "Just Starting Out in Business" document which should answer all those business/money/tax related questions. We all know how confusing it can be to get your head round that side of it.
How do I register as a new sole trading business?
You don’t. The most you have to do is to register for self-assessment. This will put you on the HMRC radar and let them know they might be getting some tax off you when Self-Assessment time comes. They will send you a reminder to self-assess in the April after you register
What happens then?
You will receive a UTR (Unique Taxpayer Reference). You need to keep this safe as you will need it to report your profits to HMRC. You can then Self-Assess any time after April 6th.
I have only just started my business – do I need to do this NOW?
No, not really. You don’t have to report any income until it reaches over £1000.
It is worth registering if this is your ONLY income as it allows you to pay voluntary NICs – which count towards your state pension, maternity allowance, tax free childcare costs etc.
What about Companies House though? Do they need to know?
No – not unless you want to be a Limited company (e.g., ‘Things Ltd’). There is no requirement to do this unless you want to – there are pros and cons to it (but that’s a whole other factsheet) … for now, while you’re starting out, it’s simpler to be a Sole Trader.