The term “sole trader” suggests a lone person running a business, with complete responsibility for all the different roles involved. This scenario is often the case. However, for business growth and/or access to complementary skills, employment is often the way forward.
‘We work with many businesses run by an individual operating as a sole trader,’ says Claudia Pop, Payroll Manager with Spicer & Co Chartered Accountants in Dunstable. ‘Some people work in isolation, however many have employees – full time and/or part time – working within their organisations. It’s absolutely possible to be both a sole trader and an employer. The important part is to ensure your payroll is set up and managed correctly – for HMRC and for your team.’
Why should a sole trader consider employing people?
Key benefits of being a sole trader are the speed and simplicity involved with the business structure. Employing people needs an investment of time and money. What are the advantages involved? Becoming an employer offers sole traders the potential for:
- Increased capacity
- Additional expertise
- A new perspective
- Faster customer service
What is the process involved with becoming an employer?
All business formats have the same legal and tax responsibilities as employers. The considerations when employing someone are:
- You need to register as an employer with HMRC.
- Employment contracts must be written and provided to employee(s).
- Provision must be made to ensure the health, safety and welfare of your employee(s).
- A Pay As You Earn (PAYE) scheme must be set up to pay your employee(s), deducting income tax, national insurance and pension contributions as necessary.
- A workplace pension scheme may be required, depending on the age of employees and how much they earn.
- HMRC must receive tax payments that are correct, compliant and on time.
Initially, the steps involved with becoming an employer can seem daunting.
Good news! The friendly experts at Spicer & Co are here to take the pain out of payroll. We’ll help you register as an employer and set up the necessary systems so everyone receives the payments and information they need accurately and at the right time.
Are you a sole trader who’d like the capacity and flexibility available to employers?
Are you keen to expand your business and recruit your first team member?
Talk to the team at Spicer & Co Chartered Accountants in Dunstable. We love helping our clients’ businesses to grow. Let’s bring your plans to life.