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Tag: tradesmen liability insurance

Should A Tradesman Hire An Apprentice?

Posted on by Nova Blogger

Traditionally apprenticeships were the norm for hiring tradesmen. Currently, many tradesmen choose to hire an apprentice as a way to fill the skills gap that exists in the construction industry. Also, there are more and more people choosing to become apprentices in a particular trade instead of going to university.

Here’s a quick look at what it entails, and why many businesses are also choosing to take this route.

 

What Is It?

An apprenticeship is a government created work and study programme to help employers get skilled staff. It allows participants the opportunity to gain a recognized qualification and relevant work experience while earning a salary. They can be either a new or current employee but they must be over the age of 16.

There are currently 4 types of apprenticeships available. There is the intermediate level, then the Advanced level, then the higher level, and finally the degree level. Apprenticeship can last between 1 and 5 years depending on the level of qualification.

 

What Are The Pros and Cons?

As with any business decision, hiring an apprentice as a tradesman has both advantages and disadvantages, here’s a quick look at a few of them.

 

Pros

  • They are hard working and productive.

  • They tend to be long-term employees. You have a motivated and dedicated employee that has decided to take this specific route, which will mean they are less likely to leave.

  • Hiring apprentices can be a cheaper and lower risk way of hiring staff.

  • The government offers plenty of support, both financial and nonfinancial

  • You can train them the specific way you require.

  • It allows you to build a workforce with industry-relevant skills and qualifications at a lower cost than usual.

  • You are giving someone an opportunity.

 

Cons

  • It can be time-consuming. Due to their lack of experience, they often require close mentorship throughout the whole process.

  • You must commit to it for a minimum of 1 year, but depending on the level it can be up to 5 years.

  • There is both an initial cost and an ongoing one for taking on an apprentice.

  • There is the risk of them not liking the programme and deciding to drop out before the allotted time period.

 

How Do You Do It?

Before you hire an apprentice your business must be sure that your business is in a good position to take on another member of staff. It can be a good idea to seek both financial and legal advice to make sure you’re ready.

Once you know you are ready to hire an apprentice, then here are a few of the steps to take:

 

First of all, you need to choose the right apprenticeship framework for your industry and the type of apprenticeship. Then you need to find an organization that offers training to your chosen frameworks standard.

 

Next, you should check what government funding is available to help towards the cost of training and assessing the apprentice. Once this is done you can then advertise your apprenticeship. Then select your chosen candidate, get them to sign the necessary agreements and then they can begin.

If you don’t want to run the apprenticeship scheme, there is the option of using an apprenticeship training agency to do it for you.

 

For the majority of tradesmen taking on an apprentice turns out to be a good decision. However, it is important that it is done at the right time because your business has to be ready to handle the commitments that come with it. It is a good idea is to ask other tradesmen that have already hired an apprentice for feedback about it before doing it.

 

How Tradesmen Can Keep Safe and Warm During Winter

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Now that we have said goodbye to autumn and winter has started. The days can be bitterly cold and windy, with an added problem of rain, snow or ice. Working outside during winter is extremely challenging, so it is important to put measures in place that will ensure you stay safe and warm during this period. This way you can continue to be productive at work despite the many challenges that winter weather brings.

Here are 3 tips to help you stay safe and warm during the winter months:

 

Invest In Some Specialist Winter Work Wear

To avoid conditions such as frostbite or hypothermia, it is essential that you invest in some specialist winter work wear. The best option to keep warm is to go for 3 loose-fitting layers rather than one or two bulky items. The loose layers help retain heat better and if you get too hot, you can take off some layers to stay comfortable. Your clothes should be both waterproof and thermal, for the first layer try to find fabric that wicks away sweat from your skin and dries quickly, avoid fabrics like cotton and look for wool or synthetic based clothing instead.

Good old fashion long Johns can be a tradesman’s best friend in the winter, so invest in some. Proper gloves are very important as you will often be handling very cold equipment and materials, such as metal. Your gloves should be light enough to allow you to work, but should still offer excellent protection from the elements. About 30- 50% of body heat is lost via the head, so don’t forget your hat. Find a thermal liner for your hard hat, including a balaclava and scarf for your face and neck.

The weather can lead to some hazardous conditions on site, making it easier to slip and fall. Having the right footwear for winter weather can go a long way in preventing such accidents, so too will a bit of extra care when walking around on site.

 

Eat A Healthy Diet

More than ever it is important to eat a healthy diet, with plenty of fresh fruits and vegetables during the winter months, so as to provide you with the nutrients your body needs to boost your immune system and so protect you from catching a cold or worse, the flu. Make sure to invest in a Thermos flask, so you can always have a hot slightly sweet drink with you such as tea or hot chocolate to warm up your system. It is important to stay hydrated as the cold weather can dehydrate you quickly, so too can alcohol and caffeine.

 

Take Frequent Breaks From Working Outside

Take frequent breaks from working outside to go indoors so you can warm up and dry off. Learn to be vigilant for the signs of hypothermia, such as uncontrollable shivering and slurred speech, and if you or any of your colleagues have these symptoms, get help immediately. If at all possible, try to do outdoor work during the day when it is light, and indoor work in the mornings and evenings when there isn’t much light outdoors.

Since there is little you can do to control the weather, if you have to work outdoors in winter, the only option is to be adequately prepared.

 

By following a few simple steps, you can stay safe and warm while on site throughout the winter period. On days when the weather is really bad, just take a break, it is better to be safe than sorry. Use the time to work on other areas of your business, such as your marketing, finance or any administrative tasks you have been putting off doing.

 

 

How Technology Can Increase Your Productivity as a Tradesman

Posted on by Nova Blogger

 

By now most tradesmen will be familiar with the use of technology at home, but not as many take advantage of it at work. You can use your phone or tablet to automate routine tasks so as to save you valuable time and energy throughout your working day. By making full use of the technology available today, your work days can become more productive.

Here are some of the reasons why tradesmen should consider using technology at work:

 

It Can Save You Time:

You can use your phone to search for and buy any equipment or materials you need for a job, on the spot. The alternative would be to physically go shopping for the goods, which can take up valuable time. You can also make and take payments on the go, as well as create bids and estimates for new work in a short space of time.

Project management software can be used to help you plan and complete large jobs on time. On a smaller scale, a daily task manager and timer can help you stay focused on the most important tasks for the day.

 

It Can Save You Money:

With your phone or tablet you can use price comparison sites to get the best prices for purchases, as well as checking for any special deal or discount coupons.

 

It Can Bring In New Opportunities:

Having an online presence such as your own website can lead to more jobs for your business and increase awareness of your brand. Also, you can use social media channels to interact with your target market whenever you choose for free. In addition to that tradesmen can also use apps to find work.

 

It Can Help You Solve Problems:

If you run into a problem on site that requires you to seek advice, you can easily go online and check to see if others have had similar problems and what their solutions were. If that is not enough, you can reach out to experts in your field.

You don’t have to carry lots of paperwork, you can store any information such as plans drawing contracts, quotations in the cloud, and access them when you are on site. You can also check for equipment manuals and other relevant data you might need.

 

Manage Your Business:

Technology can be a great help in the daily running of your business. With smart phones, you can communicate with clients and colleagues on the go via email, or one of the many internet call services. Using accounting apps or software on your smart device, you can do your all your bookkeeping including your budgeting, as well as keeping track of your daily expenses, and calculating vat and taxes.

It is also easy to send estimates and invoices in a timely a professional manner. With your camera on your smart phone, you can take photos of work on site either as proof of progress or for your portfolio of work. You can also store ideas any that come to you throughout the day with voice recorders that can transcribe to notes.

 

The smart phone or tablet can be used as your digital personal assistant, simplifying your day to day tasks with the use of software and applications. Many of the apps required are free, and they can be downloaded, installed and put to use in minutes.

There are many ways you can use technology to make your job easier, so go ahead and choose a piece of software or an app, give it a try and enjoy the benefits. Remember to do some research into each software or application you plan to use, as well as staying safe online.

 

 

Keeping Business Records For The Self Employed

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What Are Records? 

A business record is any digital or paper document that records a transaction or process that the business has been involved in. For someone who is registered self-employed, there are three types of records that you will deal with regularly, they are accounting, legal, and insurance.  
 

Why Keep Records? 

To begin with, you have to keep adequate records in order to remain compliant with the rules of being registered self-employed. Failing to do so could result in fines and penalties. Another good reason is that you can file your annual returns quickly and accurately before their deadlines.

 

By being prepared, if you are ever audited or investigated by HMRC you will have all the required information to hand. Finally, by keeping good records you will have all the necessary information you need to make important decisions for your business, for example if you need a loan, having proper records shows potential investors you are serious. 
 

What Records Do You Need To Keep? 

  1. Accounting: statements, invoices, receipts

By keeping good accounting records, you can keep track of how money is moving in and out of your business. You are required to keep all your invoices and receipts, as well as all your relevant bank statements. The same goes for any payment slips and chequebook stubs.  
 

  1. Legal: certificates, contracts, permits and licenses.

It is important that you have copies of all the documents that prove you are registered as self-employed. All of your qualification related certificates must be kept as proof of your training and experience. Details of any contracts that you have signed, should also be kept for future reference. It is a good idea to have up-to date original copies of any permits and licenses, as these will allow you to show you are fully compliant with any regulations in your industry.  
 

  1. Insurance: policies

Many self-employed people have some for business related insurance. All of your policy statements and renewal documents should be kept in good order, just in case you need to make any insurance related queries or file for a claim.  
 

How Long Do You Need To Keep Them For? 

Currently you are required to keep all your business records for a minimum of 5 years from the 31st of January of the relevant tax year. However, in most self-employed people tend keep their records indefinitely, choosing to store them when they are past the six-year mark. This is a good idea, because if you are part of an investigation by HMRC, that 5-year time limit maybe longer. 
 

How and When To Keep Records? 

Even though it may seem daunting at first, keeping proper records doesn’t have to be a chore, all you need is to develop a simple system that you can follow. Start by making a check-list of record keeping tasks that you need to do on a daily weekly and monthly basis. By doing a bit of organisation regularly, you can stay on top of things. This way you will find it much easier when it’s time for to use your business records.  
 

Nowadays with the added help of technology, you can make the record keeping process relatively stress free, and there are many resources both free and paid that are available to help. It can be helpful to keep both digital and physical copies of all your documents, this way you can have access to the digital copies when you are away from your office. The added benefit is that you have some form of backup should you lose all your physical records. 

 

 

 

Healthy Eating For Tradesmen

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The job of a tradesman is a physically demanding one. Most have early starts and the days are long, with the average being between anywhere from ten to twelve hours. Majority of the day is spent on your feet, carrying building materials around, coupled with that you are often working outside facing the elements. With all this in mind, it comes as no surprise that eating properly during the working day can be a challenge.

Here are some of the common problems tradesmen face when it comes to healthy eating.

 

Problem 1: Too busy, so don’t have time to eat

In a typical workday there are lots of tasks to be done. Very often things don’t go as planned on site, something might come up which needs your urgent attention, and so you end up skipping lunch and not taking any breaks. You often find that the day goes by and you haven’t had time to eat.

 

Problem 2: Making unhealthy choices

You don’t have time to go and shop for lunch, so you have to eat what is available on site, even if the choices might not always be the healthiest.

 

Problem 3: No food on site

You are on a site that has no food, and there is nothing near by.

 

To function properly on site, you to have eat well in order to fuel the body with enough energy for the day. Not getting enough food will mean you are more likely to get tired later in the day, which can affect your concentration levels. So here are a few things you can do to improve your eating habits while working as a tradesman.

 

Solution 1: Bring your own food to work

If you know ahead of time that that your days are always busy, then take some time when you are off work to plan your meals for the week. This is the best way to take control of your eating.

Search for a few ideas online, then make a shopping list. Choose simple nutritious foods that are easy to prepare. Try to include lots of vegetables. Prepare your meals the night before. If you are really pressed for time, then another option is to take left overs from dinner for lunch the next day. Also invest in a lunch box so you can take both hot and cold food.

 

Solution 2: Eat a good breakfast

Having a good breakfast sets you up for the day ahead. Try to go for some form of wholegrain such as oats, to keep your energy levels up throughout the morning day.

 

Solution 3: Keep healthy snacks

Be sure to include some healthy snacks that you can eat on the go, to boost your energy levels between breakfast and lunch, and between lunch and dinner. Fruits and mixed nuts are a great example. If you are really pressed for time then consider taking some form of health shake that you can mix with water to drink.

 

Solution 4: Drink plenty of fluids

As you work you are losing water throughout the day. Dehydration can lead to a loss of performance, so to keep you hydrated, it is important to drink lots of fluids.

A good idea is to carry a few bottles of water, or a flask is also a good idea as you can keep cold drinks in it in the summer and hot ones in the winter.

 

Eating well does not have to be difficult, even for busy tradesmen. The benefit of doing so means that you will have more energy and so you can be more productive at work. By getting prepared ahead of time you can find a way to eat healthy without disrupting your workday.

 

 

What Are The Benefits Of Having A Website For Your Trade?

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Nearly 50% of all small businesses in the UK don’t have a website. Many claim websites are either not relevant to their business or they are too expensive for their budget. Also many say they lack the technical know how to develop a site by themselves. There is a general lack of understanding about the impact that having an online presence can have on your business.

Here’s a quick look at some of the benefits of having a site for your trade business.

 

Creates A Professional Image:

With a site potential customers can find out about the services you offer in an instant, and they can get an idea of what your business is like. By having a site that ranks in the search engines, customers get the impression that your business is a serious one that can be trusted.

They can see photo’s or videos of your prior work, as well as any reviews from past customers about their experiences using your business. This all goes a long way in helping them decide if you are right for them. Your website also improves your brands credibility, by demonstrating that you have the resources and the competence to keep your business up to date with the times.

 

Generates Business Leads:

A website can be another great source of new business leads, in addition to what you are currently doing. It increases your visibility, allowing you to reach potential clients in a wider geographical area than your own local region.

Also, by employing simple digital marketing strategies such as search engine optimisation, you can increase your website rankings in search engines. This can lead to increased traffic to your site, which can translate into new opportunities.

 

Gives Constant Exposure To Potential Customers:

No 9-5 office hours. You have a presence online, 24 hours of the day, 7 days of the week, as long as your website is up. This means potential clients can visit your site at any-time of the day to see what your brand is about, and contact you there and then. In effect your business is always open, and it is always easy to get into contact with.

 

Good Investment:

Having a website gives you great bang for the buck. For a relatively small sum, or in some cases for free, you can set up some form of a website to advertise your trade business. Getting just one customer from your site can often payback the cost of setting it up.

Compared to other forms of advertising, a site can offer a high return on your advertising investment. Added to this is the fact that you can get a lot of targeted exposure to your potential audience for little or no money.

 

A Useful Tool For Market Research:

Having a website is a great way to get lots of market research about your target market. When people come to your site and are interested, they ask questions or leave comments, and so over time you get to know what potential customers want. Also there is plenty of useful information that you can get from analysing the data that is generated from visitors coming to your site. This can lead to discovering profitable new services you can offer.

In order to be found in the current digital age, tradesmen need to have a website, even if they only intend to operate locally. Nowadays when people are looking for trade services they go online to a search engine such as Google, and simply type in the service they are looking for.

 

Gone are the days of looking through your local papers or the yellow pages, with smart phone usage at an all time high, it is now all about the net. If your trade business is not on there, then you could be loosing potential customers to your competition.

 

 

How Can Tradesmen Keep Their Tools Safer?

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Tool theft in the UK has been on the increase in the last year, with a value of approximately £30,000,000 in equipment stolen. Thieves have become more sophisticated, stealing anything from a few tools to a whole van. Many of the tools are usually stolen from construction sites, equipment lock ups and tradesmen’s vans.

Apart form trade skills and experience, tools are one of the most important asset a tradesman owns. To begin with they cost a lot to buy, and without them a tradesman can’t earn any income. Replacing them can be very expensive so keeping them safe is a must. Even if you are in a position financially to replace stolen tools, the time taken to do so is inconvenient and may result in loss of income. So here are a few ideas to help protect your tools from theft.

 

Van:

Most of the time your tools will be in your van, so the first step is to make your van secure. You can increase your vans security by investing in additional safety locks to make it harder for potential thieves – these can range from deadlocks to slam-locks to plate locks.

It also goes without saying that the van should be fitted with an immobiliser if it does not come with one installed. Make sure you have a fully functional alarm installed, preferably one that is wireless, and remember to install a small CCTV camera in the van to keep watch.

 

On Site:

When you are on-site, try to make sure that you keep your van parked in a busy area. Only take out the tools you need for a particular task, keeping the rest of your tools in your van. If you have to store tools on site, make sure they are kept in a secure toolbox and placed in a safe designated place.

 

At Home:

Don’t leave your tools in your van overnight, because they will be vulnerable. Try to take them out when you arrive home and put them in a secure place till you need them. If you have to leave them in the van overnight, then make sure they are locked up in a secure tool storage box and kept out of sight.

Place a warning sticker on the van to deter potential thieves that says “no tools stored in van overnight”. You can also cover all the van windows so no one can see what’s inside the van. Be sure to check that all your van doors and windows are locked before you leave it, and try to keep it parked in a secured garage overnight. If that’s not possible, then make sure it is parked in a well lit busy area.

 

Other Ways To Protect Your Tools & Equipment From Tool Theft:

There are a few other things that can be done to protect your tools and equipment. First of all, mark all your tools with a UV pen or have them engraved. This can help in two ways, by serving as a deterrent, and by helping to identify any tools. Another way is to put a list of all your tools on a national valuables and property register, and also mark them as registered.

Finally take out motor insurance to cover your van, and tool insurance to cover your tools. Get to know the terms of your policies, so that you know you are storing your van and tools in line with what is expected. Keep an inventory list of all your tools including photos, and receipts, in case you need to make a claim.

 

By becoming a bit more proactive, you can take steps to reduce the chances of your equipment getting stolen. Many of thefts are opportunistic, in that they tend to go for the easy targets, so any thing you can do to make your tools less attractive to thieves will help keep them safer.

 

 

Top Tips To Protect Your Small Business From Cyber Attacks

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Small and medium enterprises are easy target for hackers. Most small businesses don’t have a dedicated IT department and the majority don’t have proper cyber security measures in place to protect their data. Also there is the feeling amongst SME’s that they are too small for cyber criminals to attack when there are bigger businesses out there, and so investing in cyber security is not a priority.

 

Protecting Your Business From Cyber Crime

The reality is that cyber crime is one of the biggest risks to businesses of all sizes. Attacks can lead to large financial losses, damage brands and may even result in legal action been taken against your business by a third party. These consequences could result in business closures, so therefore it is important for SME’s to become more proactive about this issue.

 

One of the main threats is from ransomware attacks that locks devices, before demanding a ransom from the victim to unlock them. Ransomware usually comes in email attachment that users unknowingly activate by opening attachments.

 

Those who pay the ransom are often more vulnerable to future attacks as their willingness to pay is communicated to other hacking groups. Other common forms of attack are spam, spyware, phishing emails, and data breaches. They all enable fraudsters to get hold of confidential and sensitive information such as bank details.

 

In today’s increasingly digital world, SME’s need continuous real time protection that is both affordable and user friendly. The best solution is a blend of proper education and effective use of existing technology.

 

There are many things that can be done for little or no money to reduce the chances of cyber attacks, here are some of them:

 

  1. Proper preparation is key, this can be done by having a comprehensive cyber security plan that outlines employee roles and procedures in the event of an attack. These plans can then be updated and rehearsed periodically.

 

  1. All staff should be given the appropriate training to raise their awareness of the issue’s at hand. They should be informed about the appropriate use of their technological devices and company data on a regular basis. By ensuring staff are vigilant against things such as malicious email attachments, they will be less likely to fall victim to cyber crimes.

 

  1. All data should be backed up regularly on external drives as well as in the cloud.

     

  2. All devices should have robust, up to date anti-malware and anti-virus software to help block and notify users of potential attacks before they happen.

     

  3. All software should be updated when new updates are released as they contain vital security fixes that help to keep devices safe.

     

  4. Passwords should be changed regularly, and generated using a password generator to make them stronger.

     

  5. Access to sensitive data should be strictly controlled, with user privileges limited to a select few.

     

  6. All paper documents should be properly disposed of by using a shredder. So that no information can be obtained from office waste.

     

  7. Businesses should also consider taking out some form of cyber insurance cover, to protect themselves against any financial or legal fall outs from hacking attacks.

     

  8. Using virtual private networks (VPNs) can provide protection against data collection by outsiders, by creating a secure encrypted connection between your technology devices and the internet.

 

The threat of cyber crime is on the rise, and attacks are becoming more and more sophisticated. Small and medium sized businesses need to pay more attention to their cyber security as they are the most vulnerable. While it is not possible to be a 100% protected against malicious attacks, prevention seems better than cure.

 

9 Steps For Starting Up A Bricklaying Business

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Running your own bricklaying business will provide you the opportunity to be your own boss and set your own hours, but there are a few things you’ll need to get your business on the right track to success from the start.

Here are 9 steps to help you launch your business:

 

Step 1: Create a business plan

Writing a business plan will help you determine your business goals and the resources you need in order to meet those goals. The process of writing a plan will also give you a chance to see if your idea is feasible or not. Your plan will act as a working document for your business, as well as a tool for getting any required finance.


Step 2: Get the right training and qualifications

Once you decide that your idea is feasible, the next step is to get qualified. If you have no formal training in the construction industry, then you should consider taking one of the many accredited bricklaying courses that are available. It would also be a good idea to find some kind of temporary or part-time bricklaying work so as to practice your skills. If on the other hand you have experience in the industry, then put together a list of your current skills/experience and determine what additional training and qualifications you need to get.


Step 3: Get the necessary finance

With your business plan written, you can now begin the process of looking for money to fund your start-up. Check to see if there are any available government funded schemes that offer financial assistance to your industry. It is also worth approaching your bank and the many alternative lending providers including crowd funders.


Step 4: Find a suitable business location

You now have to decide where you will operate your business from. With a bricklaying business you will need a suitable place, because you will have equipment and materials to store. You may choose to work from home to begin with, in which case you should set-up a designated area for that. However if you decide that you want to work from away from your home, it is best to look for a location that is easily accessible, so that potential customers will be able to reach you.


Step 5: Register your business

Now it is time to decide whether to operate as a sole trader or a limited company. Both have their pro’s and con’s. It is easier to set up as a sole trader, but a limited liability company will offer more legal protection. If you decide to incorporate, then you have to choose a name and register it with Companies House so no one else can use that name. Regardless of which structure you choose, you have to notify HMRC of your decision, so you can apply for the necessary tax/ national insurance documents before you begin.


Step 6: Get equipped

It is time to equip your business with any tools you need to perform your bricklaying tasks. This will also involve choosing a vehicle to transport you and your kit. Depending on your finances you may decide to buy these items outright or to lease them until your business grows. If you already have equipment, then this is the time to get them cleaned and serviced.


Step 7: Apply for licenses and permits

You need to contact your local council in order to find out what licenses and permits are legally required for you to operate as a bricklayer. This is also a great time to join any relevant trade associations.


Step 8: Get Insured

This is one of the most important steps that you must complete. In bricklaying as in many construction related jobs, accidents can and will happen. Therefore it is essential that you protect yourself, and your business from any legal action that may follow. To begin with you would need some type of public liability insurance coverage, this is is great for things like customer and staff injuries as well as any mistakes or damage to your customers properties. Then you need some form of coverage for your all equipment including vehicles if you have them to protect them for loss, damage or theft. Finally you may want to consider some form of income protection so you are covered in times when you are unable to work due to personal illness or other unforeseen events.

Step 9: Promote your business

Once you are financially and legally ready to start operations, you focus should now be on getting customers. A great way to do so is by having an online presence via a company website. This will make it easy for potential customers to find out about your business and the services you offer. Couple this with the many social media channels and you can reach a large audience of potential customers quickly. Offline you can take out ads in local papers and business directories. It is also worth networking with other tradesmen, to find out if there is any work you can do together.

Once you have completed all these steps, you will be ready to launch you new bricklaying business, knowing that you are adequately prepared for the journey ahead.

 

 

Making The Switch From A Sole Trader To A Limited Company

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You can choose to change your businesses status from sole trader to limited company at any time. Both formats have their pros and cons, the best choice will depend on a combination of your current situation and future plans. However there may be an optimal time to make the switch and that is when the benefits of being a limited company outweigh those of begin a sole trader.

So when might this be? Well here are a few possible situations in which it might be the right time to make the switch, but it is important to make sure you calculate the potential benefits and savings first before making the switch.

You may decide its time to make the switch if:

Your salary is increasing:

As a sole trader you have only one way to take your salary, and that is as a salary, plus you must pay both income tax and national insurance contributions on it. A company director on the other hand can choose to take their wages by a combination of salary and dividends. Dividends are free from national insurance contributions. So as a company director you can reduce your taxes by taking a small salary and the rest from dividends, making it a more tax efficient way.

You are looking for investment:

If you are looking for investors, then setting up as a limited company means that you can sell shares to investors. Also there is the added perception that a company has more credibility than an individual, and so many companies prefer only to do business with a limited company. Due to this, potential investors are likely to be more open to investing in a limited company as opposed to a sole trader.

You are concerned about liability protection:

As a sole trader you and your business are considered one and its debts are yours, so if your company fails then you are liable for it’s debts. A limited company on the other hand is legally a separate entity from its owners, and so if your company is fails then your personal assets are not at risk, because as a share holder you are not liable for its debts.

Your company profits start to grow:

When you are trading as a sole trader, you are taxed via the annual self assessment system and you and your business are considered one entity. A company, however is taxed via the corporation tax system. There are some potential tax savings that can be made by switching to a limited company.

For example, for the 2016 -2017 tax year, as a sole trader your tax free allowance is £11,000, you the pay 20% tax on any amount between £11000 and £43,000, after which you are taxed a higher rate of 40%. However for a limited company, the annual small profits tax rate is currently 20% on any amount up to £300,000. So switching to a limited company may be more tax efficient because even though it is taxed at the same tax rate, it has a much higher maximum amount.

You want to protect your intellectual property:

By registering your company name with companies house, you prevent any other person or business from using the name, it is now protected by law. However as a sole trader you don’t have this protection, and so it can be a lot harder to protect your name.

So there are some scenarios in which you might consider changing from a sole trader to a limited company, because to do so will result in some form of savings and other tangible benefits. If you do make the decision to switch, you then need to notify the HMRC that you are becoming a limited company, and then de-register as self employed. From there it is a simple process of registering your business with Companies House and then you can start trading as a limited company.

 

 

 

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1995 - 2024 Nova Insurance. Nova Insurance Limited. Company Registration Number 3482686. We are authorised and regulated by the Financial Conduct Authority and our firm registration number is 307128. Registered Office : 3 Redwing Court Business Centre, Ashton Road, Romford, Essex, RM3 8QQ