11 STEPS TO SETTING UP AS A SOLE TRADER (SELF-EMPLOYED) - Post 4
ITEMS TO DO BEFORE TRADING Cont'd
4. OPEN A BUSINESS BANK ACCOUNT
As a sole trader it is not a legal requirement to have a business bank account, but you may need to check the small print of your personal account to see if business use is allowed.
By opening a business bank account, it draws a nice clean line between the business account and your personal account. It saves time when keeping your bookkeeping records as you are not wasting time shifting through a personal account sorting out what is personal and what is a business transaction. This is also true when it comes to having your year-end accounts completed the professional that completes this task could charge your extra for their time sorting through an account for decide what is business and what is personal.
If you need financial help at the start of your business or in the future having a business bank accounts shows that you are serious about your business.
A business bank account is mandatory for a limited company as it is a legally a separate entity.
5. NATIONAL INSURANCE NUMBER
As part of being a sole trader you will require a National Insurance number as subject to you profits you pay Class 2 and Class 4 National Insurance, a subject we will dealt with earlier.
So, who needs to apply for a National Insurance Number:
· If your planning to work
· Claim Benefits
· Apply for a Student Loan
· Pay Class 3 voluntary National Insurance contributions.
Please check on GOV.UK “Apply for a National Insurance Number” for latest information but due to Coronavirus you currently are unable to apply for a National Insurance Number, but you can still start work without one if you can prove you can work in the UK. You can still apply for benefits or a student loan.
To prove you can work in the UK you’ll need one of the following:
· your biometric residence permit number
· your biometric residence card number
· your passport or national identity card, if you have settled or pre-settled status
If you’re an EU, EEA, or Swiss citizen, you can continue to use your passport or national identity card to prove you can work in the UK until 30 June 2021.
LOST NATIONAL INSURANCE NUMBER
If you know you had a National Insurance Number but have since lost it but have been employed check a payslip, P60 or letters about tax, pension’s and benefits. It is also available via your “personal tax account” where you can download a confirmation letter.
Alternatively, you can fill in a CA5403 form on-screen and print and send to HMRC along with up to 2 of the following documents.
· Birth Certificate
· Full or provisional driving licence
· Adoption Certificate
· Home office or travel document
· Work permit
· Certificate of naturalisation
· Marriage or civil partnership
· Certificate of service in Her Majesty’s Forces or merchant navy
· Identity or medical card
Allow up to 15 days to receive you National Insurance number by post.
You can also contact the National Insurance numbers helpline 0300 200 3500 Monday to Friday: 8.00am to 4.00pm, but if you are unable to answer all the questions you will need to fill in the CA5403 form. If you are unable to answer all the questions over the phone you will still have to wait up to 15 days to receive you National Insurance number by post.
NEVER HAD A NATIONAL INSURANCE NUMBER
After you have applied you will receive a letter asking you to attend a National Insurance number interview at Jobcentre Plus (or a processing centre if you are in Northern Ireland).
Listed within the letter will be which documents to provide to prove identity, such as:
· Birth or Adoption Certificate
· Passport Identity Card
· Full driving licence
· Residence permit
· Certificate of naturalisation