RE: FN-FORUM: tax / sole trader names question

date posted 21st January 2005 18:01

Sorry one last question on this...
Do companies have to keep their records at Companies House up to date? For
example, if they change address?
If so, can I take it that the information available at Companies House's
searchable database, is also up to date?

Richard.

-----Original Message-----
From: [EMAIL REMOVED] [EMAIL REMOVED] Behalf Of Marc
Wilson
Sent: 21 January 2005 15:21
To: FN-FORUM / [EMAIL REMOVED]
Subject: Re: FN-FORUM: tax / sole trader names question



On 21 Jan 2005 14:44:37 -0000, Richard Monk [EMAIL REMOVED]
wrote:

>
>Just another question for the day, partly in relation to what some of you
>were discussing in earlier threads concerning using a 'business name' to
>describe a sole-trader, accepting cheques under this name, etc.
>
>I have been in contact with a colleague in the past who has been using two
>different 'trading names', call them 'GraphicsCo1' and 'GraphicsCo2', and
>accepting consultancy work from a variety of employers whilst billing under
>these names. There are two questions I have relating to this - obviously if
>he is paid to 'GraphicsCo1' then the bank were willing to accept cheques
>payable to this name, but does the inland revenue view this as ok?

within reasonable limits, you can have as many trading names as you need,
as long as there's no intent to defraud. If he's splitting the income
between the two names to avoid registering for VAT, for instance, he's
heading for a world of pain- there are rules about "artificial separation".
Penalties can exceed 100% of the tax owed, plus compound interest on the
lot. Custodial sentences are not unknown.

Even if you are a sole trader, you should maintain a separate business bank
account (or accounts, if trading under different names). IIRC, it's
actually now a criminal offence to run a business from an individual
account- it certainly breaches the T&C of any bank. Just from the point of
view of documenting what money is going where, and why, it's a good idea
anyway.

>Equally, does he need to register these trading names with Companies House
>or anything?

Only Limited Companies (including PLCs) are registered with Companies House
(there's sort of a clue in the name).

There's no requirement to register as a Sole Trader or Partnership.

>I had noticed that both names were already the names of
>existing companies.

That *may* be a problem- he might be found to be infringing a copyright or
trademark. If he's trading as GraphicsCo1 Limited, and he's not Limited,
he will be in deep doodoo. Otherwise, it's only a concern if he is
attempting to "pass off", i.e. pretend to be another organisation to get
trade.

>I am convinced that he may be trying something a little dodgy on in terms
of
>IR, but I have no real idea of how a lot of this works.

It could be a bit of a "shell game"- keep the money moving in a confusing
way, and no tax gets paid. I know an Ozzie contractor that managed that
not once, but twice: paid no tax for 5 years, ran away to Oz, did a "take
it or leave it" deal with the IR and C&E- for about 10% of what was owed.
--
Marc Wilson

Cleopatra Consultants Limited - IT Consultants
2 The Grange, Cricklade Street, Old Town, Swindon SN1 3HG
Tel: (44/0) 845 890-3012 Fax: (44/0) 871 236-1531
Skype: cleo-marc
Mail: [EMAIL REMOVED] Web: http://www.cleopatra.co.uk
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