Why should I register my company?
The reason to sign up your enterprise is to ward off any nasty surprises from HMRC – if you’ve not registered and not paid the correct amount in taxes, you may be hit having a hefty fine and a backdated bill for the full amount your debt.
You might also need to sign up for certain varieties of trading activity. For instance, in case your business sells alcohol or you wish to operate being a street vendor, you’ll have to have a specific license one which just legally trade.
If you’re planning on employing any members of staff, you’ll must register being an employer with HMRC. And don’t forget that you’ll also need to get employer’s liability insurance, because this is a legitimate dependence on any company with a minumum of one employee.
Even though there’s more admin involved, there are many reasons why you should register your small business like a limited company with Companies House. If you’re trying to make a brand, registering like this means you’ll be able to reserve and protect your business. Operating as being a limited company also reduces your individual financial liability, should things fail.
If you’re unsure in what is essential of your business, it’s worth talking with a financial consultant for guidance.
Is my hobby a small business?
There’s normally a blurred line with regards to differentiating between a hobby as well as a business. Quite simply, if you are making money from your hobby or side hustle, then you’ll must register as a business with HMRC, in case you work at home and don’t have business premises.
You should register when:
Any trading or professional business activity comes about
Services or goods are purchased or sold
Income is taken and profit is manufactured
Any products are bought to trade and make a profit
Any interest is earned
You’ll definitely have to register your company in case you start employing staff or looking into business insurance, so that it is practical to have this sorted immediately. Once every one of the admin is sorted, then you’re able to move your organization premises or start conducting interviews to defend myself against staff.
However, you won’t have to register your business with HMRC if you’re earning under ?1,000 per tax year from the business.
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