Sole Traders
Becoming a sole trader is probably the simplest of all for business start ups and gives you complete control over your business and financial affairs.
To set up as a sole trader all you will need to do is register as self employed with HM Revenue and Customs and of course meet the legal regulations of the child-care sector eg. gain the appropriate Ofsted registration that is required for your provision. Make sure you register with HMRC the moment you start running your business otherwise you could incur a fine of up to £100.
The main disadvantage to operating your business as a sole trader is that you are personally liable for any debt incurred or claims against you. Therefore, ensure you have appropriate levels of insurance cover and carefully monitor your finances.
Your ongoing accounting requirement will be to complete an annual self assessment form for HM Revenue & Customs and keep accurate and up-to-date records of all business transactions and accounts. You will also pay income tax on all profits and pay national insurance contributions on those profits.