Sole Trader set up guidance

21
Posted 5th Nov
Hi All,

I am thinking about selling products online on amazon and ebay.
I tried to get in touch with distributors but they say they want my sole trader account details before they can provide any quotes. I want to understand how much profit I can make by selling products online so my plan is to set up sole trader account but after receiveing the quotes if I don't feel there isn't enough money to make then I want to be able to close everything related to sole trader account.

Following is what I understand so far:
1. Essentially a business bank account is needed but for few initial months I don't expect to make any profit so I can use current bank account as I won't have any expenses or income.
2. There is a £1000 allowance and if my income minus £1000 is zero then no need to register with HMRC and no tax returns or self assessment required.
3. For ebay: I would need to use ebay business account and cannot use personal account.

My first question is: for a start I just want to set up a sole trader account without telling HMRC as I won't make any money and my sole purpose is to just connect with the distributors and understand what quotes they can provide. How can I set up sole trader account?

If I feel I am not making any profits after I receive the quotes from suppliers and distributors I would like to delete or close this account. How can I do this?
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You've basically got to wing it.

A P.O box for your trading address, your home address as your warehouse (Unit 1, [your home address]) .

Your name as the Proprietor, projected turnover ????. Basically some kind of business plan which in your circumstance seems incredibly difficult to achieve.

But don't give up, because difficult is good, it sorts out the wheat from the chaff.
21 Comments
Has the word "bank" been omitted from your text or not?
"They want my sole trader account details."

What details exactly do they want from you?
AndyRoyd05/11/2019 22:10

Has the word "bank" been omitted from your text or not?


Updated
PeacePipe05/11/2019 22:14

"They want my sole trader account details."What details exactly do they …"They want my sole trader account details."What details exactly do they want from you?


Distributors and suppliers: they are asking for yearly turnover, director name, registered address of the company. Website link, plans to sell and warehouse address.
ab71305/11/2019 22:19

Distributors and suppliers: they are asking for yearly turnover, director …Distributors and suppliers: they are asking for yearly turnover, director name, registered address of the company. Website link, plans to sell and warehouse address.


Have you tried telling them the truth that you are just starting up as a sole trader and looking at the viability of stocking their products?
Edited by: "PeacePipe" 5th Nov
PeacePipe05/11/2019 22:21

Have you tried telling them the truth that you are just starting up as a …Have you tried telling them the truth that you are just starting up as a sole trader and looking at the viaiiblty of stocking theoir products?


Yes told them already. I told them I don't have a website to sell but I just want a quote for a start so that I can plan next steps but there response is until I don't have limited or sole trader account they won't tell me anything.
ab71305/11/2019 22:22

Yes told them already. I told them I don't have a website to sell but I …Yes told them already. I told them I don't have a website to sell but I just want a quote for a start so that I can plan next steps but there response is until I don't have limited or sole trader account they won't tell me anything.


See if you can pay cash on delivery or at time of order up and they probably will only need basic information. If you are going to a global manufacturer though they will probably want the full details.
eslick05/11/2019 22:41

See if you can pay cash on delivery or at time of order up and they …See if you can pay cash on delivery or at time of order up and they probably will only need basic information. If you are going to a global manufacturer though they will probably want the full details.


I can pay cash on delivery but they are global manufacturer and they probably want to know how legitimate busines/person I am...thats why I want to understand how can I set up sole trader account just so that I can ask them for quotes but if I don't like the quote I want to be able to delete this trading account. I don't want to go and inform HMRC at this moment bcuz i am not even sure if I am going to purse this any further as completely dependent on the quotations I receive.
ab71305/11/2019 22:46

I can pay cash on delivery but they are global manufacturer and they …I can pay cash on delivery but they are global manufacturer and they probably want to know how legitimate busines/person I am...thats why I want to understand how can I set up sole trader account just so that I can ask them for quotes but if I don't like the quote I want to be able to delete this trading account. I don't want to go and inform HMRC at this moment bcuz i am not even sure if I am going to purse this any further as completely dependent on the quotations I receive.


I'm not really understanding what your issue is with HMRC? They don't bite. However take a look at Tide business account and create a letterhead in Word. you can be ab713 t/a 'whateveryouwantwithinreason' and the ab713 bit doesn't need to be on the letterhead. Your address could be a P.O box if you want to pay for one and don't want to use your home address.
Edited by: "OllieSt" 5th Nov
OllieSt05/11/2019 23:08

I'm not really understanding what your issue is with HMRC? They don't …I'm not really understanding what your issue is with HMRC? They don't bite. However take a look at Tide business account.


I have no issues with HMRC. My plans are completely dependent upon the quotes I receive from the distributors. If the quotes are not good enough then I would just scrap my plans. There is a high likelihood of my plans getting scrapped so I just don't want to do anything at HMRC when nothing is final.
All I want to understand is if it is possible to create sole trader account without registering with HMRC?

So far what I have read it seems it is not possible but I just want to understand from others here on hukd.
OllieSt05/11/2019 23:08

I'm not really understanding what your issue is with HMRC? They don't …I'm not really understanding what your issue is with HMRC? They don't bite. However take a look at Tide business account


You gave a link for business bank account. I can already set up a starling bank free business account.
ab71305/11/2019 23:15

I have no issues with HMRC. My plans are completely dependent upon the …I have no issues with HMRC. My plans are completely dependent upon the quotes I receive from the distributors. If the quotes are not good enough then I would just scrap my plans. There is a high likelihood of my plans getting scrapped so I just don't want to do anything at HMRC when nothing is final. All I want to understand is if it is possible to create sole trader account without registering with HMRC?So far what I have read it seems it is not possible but I just want to understand from others here on hukd.


what do you mean by sole trader account. I can start a sole trader business called OllieSt trading as AB713 PRODUCTS right now. Create a letterhead with AB713 PRODUCTS using my home address, get the bank account to match and off I go.
OllieSt05/11/2019 23:20

what do you mean by sole trader account. I can start a sole trader …what do you mean by sole trader account. I can start a sole trader business called OllieSt trading as AB713 PRODUCTS right now. Create a letterhead with AB713 PRODUCTS using my home address, get the bank account to match and off I go.


How do I register sole trader company name with the Government? So that distributors can check the legitimacy.
Sounds as if they might want a limited company name, maybe a VAT Number and trading address etc.
You can get most of those cheaply enough and dispose of them if you never trade.
You can'/don't. That's the whole point of being a sole trader. You only requirement is to register by the 5th Oct of your 2nd tax year and you don't seem to want to involve HMRC at the moment in any case. And that info is not in the public domain. What you would be able to do is show a set of accounts after you had been trading.


The issue here is that you are not getting to first base with the distributers. All you can do is as I suggest (letterhead and matching business name), you have nothing else to show.
PeacePipe05/11/2019 23:42

Sounds as if they might want a limited company name, maybe a VAT Number …Sounds as if they might want a limited company name, maybe a VAT Number and trading address etc.You can get most of those cheaply enough and dispose of them if you never trade.


But then the following will not be applicable

2. There is a £1000 allowance and if my income minus £1000 is zero then no need to register with HMRC and no tax returns or self assessment required.







If your company is actively trading, you must register with HMRC for corporation tax within 3 months of beginning any business activity. You may also have to register for VAT if your company generates over £83,000 of VAT taxable turnover in one year, or it is likely to exceed this threshold within the next 30 days alone.

If your company is registered for corporation tax, you will be required to send an annual Company Tax Return to HMRC and pay any corporation tax that is owed. You must also include a full set of annual accounts with your tax returns.
Edited by: "OllieSt" 6th Nov
You've basically got to wing it.

A P.O box for your trading address, your home address as your warehouse (Unit 1, [your home address]) .

Your name as the Proprietor, projected turnover ????. Basically some kind of business plan which in your circumstance seems incredibly difficult to achieve.

But don't give up, because difficult is good, it sorts out the wheat from the chaff.
PeacePipe05/11/2019 23:42

Sounds as if they might want a limited company name, maybe a VAT Number …Sounds as if they might want a limited company name, maybe a VAT Number and trading address etc.You can get most of those cheaply enough and dispose of them if you never trade.


thanks
OllieSt06/11/2019 00:17

You've basically got to wing it.A P.O box for your trading address, your …You've basically got to wing it.A P.O box for your trading address, your home address as your warehouse (Unit 1, [your home address]) .Your name as the Proprietor, projected turnover ????. Basically some kind of business plan which in your circumstance seems incredibly difficult to achieve. But don't give up, because difficult is good, it sorts out the wheat from the chaff.


Thanks
ab71305/11/2019 22:19

Distributors and suppliers: they are asking for yearly turnover, director …Distributors and suppliers: they are asking for yearly turnover, director name, registered address of the company. Website link, plans to sell and warehouse address.


If you don’t have what they are asking, eg registered company address and warehouse why does it matter about sole trader.

You you can register your home as company address, set up a website, but warehouse and yearly turnover is your sticking point. If you register company address I would inform taxman if your not making profit it won’t cost you anything but keeps it all above board
ab71305/11/2019 22:46

I can pay cash on delivery but they are global manufacturer and they …I can pay cash on delivery but they are global manufacturer and they probably want to know how legitimate busines/person I am...thats why I want to understand how can I set up sole trader account just so that I can ask them for quotes but if I don't like the quote I want to be able to delete this trading account. I don't want to go and inform HMRC at this moment bcuz i am not even sure if I am going to purse this any further as completely dependent on the quotations I receive.


Thats your problem, sounds like the manufacturer is for a finished product they want to know those things so they can establish if its worth speaking to you. I work for a similar company and we dont even consider small sole traders, they would go to cash and carry type places, or other distributers as the small companies dont have the sales volume the manufacturers are looking for to deliver direct. The best bet may be to go to a distributer rather than direct.
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