[JoshD]

England, UK

Okay, so, one of my Dads friends is a business man. And in a VERY short conversation he suggested I research the legal side of being a freelancer.

This is what I know:
Officially a freelancer is a Sole Trader.
To be a Sole Trader you must register as such with HMRC and submit yearly tax returns.

What else do I need to know?

Thanks,
Josh D

[Vermiculus]

I know when I released my first program for a client, my dad 'recommended'/told me to not refer to myself as PaperClip Productions - but rather to do something like - "this program is the intellectual property of [insert legal name], D/B/A [doing business as] PaperClip Productions

I think that would eliminate the need for registration, but I'm not positive. I think the trouble would have been arising out of who exactly was PaperClip Productions... If it was never listed with anybody, no one would officially know. D/B/A I think solves this problem by providing a legal reference to the owner.

[JoshD]

Thanks, for the tip.
Having researched it, I believe, in the UK we are supposed to use T/A which is Trading As instead of D/B/A which is Doing Business As.

However, I don't know whether this works if you have a website advertising your services or not. Do you know?

Thanks,
Josh D

This post has been edited by JoshD: 17 June 2010 - 09:37 AM

[Kilorn]

D/B/A is the way we do it here in the US too. My father is an electrician and owns his own company, but since he's the sole proprietor, he's required to label himself as [legal name] D/B/A [company name].

[JoshD]

Does he advertise his services?
Maybe through a website, or through leaflets/posters. Anything?

Thats what im not sure about, is D/B/A (in the US) and T/A (in the UK) is allowed when you advertise your services?

And what would the Legal Name be? Is it your real name?

[Kilorn]

In my father's case, he doesn't advertise. His business is grown strictly on word of mouth and references from past customers to their neighbors and whatnot. Legal name would be the name that you were given at birth, or your current name if you ever changed it as it would appear on any court documents.

[JoshD]

Okay, thats cool.
If anyone knows whether you can advertise or not. Please let me know.

Oh good, thats what I thought it would be. Thank you =)

[JoshD]

Okay basically, this does not eliminate you from having to register with HMRC, obviously, anything, has to be registered with HMRC as otherwise, it is Tax evasion.

And other than registering to HMRC I don't think there is anything I have to do. So might as well just register to HMRC.

Is there anything else I have to do?

[dsherohman]

JoshD, on 17 June 2010 - 06:40 PM, said:

Okay basically, this does not eliminate you from having to register with HMRC, obviously, anything, has to be registered with HMRC as otherwise, it is Tax evasion.

This is basically two different registrations.

The first, which is required, is that, as an EU company, you must register for a VAT number to be able to legally conduct business, unless it only constitutes a small portion of your overall annual income and the UK has a relevant "hobby income" rule.

The second is registering a name to do business under, which allows you to just do work as "MyCompany" rather than "Me, TA/DBA MyCompany". This is optional, unless you're registering an LLC or similar, in which case it's effectively part of that registration, because the LLC is a separate legal entity with it's own name, but that's a more involved (and expensive) process that it doesn't sound like you're looking to undertake at this point. The US also has an exception for if the company name contains your full legal name (e.g., I didn't need to file any papers with the State to be able to issue invoices from "David Sherohman Technical Consulting" when I was working under that company name), but I have no idea whether EU or UK rules are similar on that point.

Note that my understanding is based on having worked both as a sole proprietor and through an S-corporation in the US and as an enskild firma (sole trader) in Sweden. I am not familiar with the details of UK law, only general EU regulations. Consult a competent legal professional who is licensed to practice law in your jurisdiction if you want definitive answers.