Did you know that as a sole trader, you can employ members of staff? Very many sole traders across North Wales and beyond take the status a little too literally and take the term at face value, often working alone and ending up doomed to failure by being far too overburdened by public demand.
Any accountant in North Wales worth their salt will disagree with the notion that being a sole trader means that you have to go it alone – being a sole trader is actually characterised by the fact that you own the business and are responsible for it on your own. This of course can be quite a double edged sword with the fact that if anything does go wrong with the company, you personally are liable for it. As the saying goes – with great power comes great responsibility – and the services of a good accountant are absolutely paramount in all manner of pressing matters.
Don’t feel that as a sole trader you get it easy in other respects, either. It doesn’t matter whether you are a sole trader, a limited company, a gigantic corporation or even a partnership, if you employ people you have to obey the same criteria absolutely every other company in the country has to go by. You must pay a minimum amount of staff benefits – such as holiday pay, the national living wage and of course make contributions to an employee’s pension, as of 2017.
You need to enrol employees over the age of 22 into the workplace pension scheme, which will involve you making a contribution into your employee’s pension yourself. Keep in mind that if your employee earns over £10,000 per year, you will need to pay at least 1% of your employee’s qualifying earnings into the pot.
As of July 2017 the Living Wage stands at £8.45 an hour (Please keep in mind that the National Living Wage in London stands at £9.75 per hour) For employees under the age of 25, you will need to pay the National Minimum Wage. You’ll need to check that your brand new employee also meets the criteria for being legally allowed to work within the UK, as well as conduct other employment checks as the criteria demands, such as DBS checks.
As a sole trader, limited company, or any other employer, it also falls to you to register as an employer with HMRC up to 4 weeks before you take on your new employee and pay them. For many, this can be daunting, but the services of a good accountant in North Wales can help you get it right in an efficient manner.