2.0 Changing from sole trader to a limited company in order to employ people

If you decide to change your business’s legal structure, for example if you’re a sole trader or partnership and you want to make your business a limited company, you’ll have to inform a number of areas of HMRC to ensure your tax affairs are kept in order.

If you decide that you want to change your business structure to a limited company, you need to register with Companies House first. You’ll also need to tell HMRC, file Company Tax Returns and pay Corporation Tax.

2.1 Getting started with Corporation Tax

If you were previously a sole trader or a partner in a business partnership, you’ll need to complete a tax return for the year you stopped trading and started a new company. If the partnership is ending, the nominated partner will have to fill in a tax return covering the period until the partnership ends.

If you change your business status from a sole trader to a limited company you’ll also need to deregister as self-employed and stop paying self-employed Class 2 National Insurance contributions. You can do this by calling HMRC’s self-employed helpline http://www.hmrc.gov.uk/startingup/

2.2 Employing people

If you’re a sole trader or partnership which hasn’t previously employed anyone and are now starting a limited company of which you’ll be a director then you’ll be an employee of the company. This means you’ll have to register as an employer and set up and run a PAYE scheme. The scheme will also cover any other employees you take on.

If you’ve already been running a PAYE scheme as a sole trader or partnership, you’ll need to set up a new scheme for your limited company. You’ll be provided with a new employer PAYE reference number. You can get more advice from your employer Tax Office.

    The training TBG Learning offers ties in very well with our own pre-employment programme and they support their customers extremely well. We’re keen to work with the local community and the local workforce, to ensure the hotel is a valuable asset to the area.

    So far we’ve employed three new staff through TBG Learning and they’ve been fantastic additions to our team.

    Carly Whitcombe, Jurys Inn, Human Resources Manager

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    Some of our successful learners

    Every year more than 35,000 people participate on a TBG Learning programme. Here are some of our successful learners and job seekers, read about how they’ve achieved their goals.