I'm currently in the process of starting to write a business plan for a 'company' idea i've been toying with for a while now. My question to all those out there in cyberland is if i am classed as self-employed how do i go about getting items at trade prices? When you register with HMRC as self-employed do they give you a unique number (like a VAT number and/or a Limited Company) to show to companies you are entitled to things at trade prices?
Self-Employment and Trade accounts
- Thread starter AlanG
- Start date
I've been self-employed at the same time as working for a large company - HMRC can give you two tax accounts.
Trade discounts have nothing to do with HMRC. Every company can decide who they want to give discounts to, and how much. Some companies will want to see evidence of your turnover, others will just want to see your company letterhead, which you can probably produce using the word processor on your PC! As Peter said, some will set a minimum order level, some won't give discount but will give a rebate at the end of each trading year.
It's more difficult if you want to open an account with a company, they'll want details of your business bank and probably references from suppliers.
Pete
Trade discounts have nothing to do with HMRC. Every company can decide who they want to give discounts to, and how much. Some companies will want to see evidence of your turnover, others will just want to see your company letterhead, which you can probably produce using the word processor on your PC! As Peter said, some will set a minimum order level, some won't give discount but will give a rebate at the end of each trading year.
It's more difficult if you want to open an account with a company, they'll want details of your business bank and probably references from suppliers.
Pete
G
Al , the HMRC will only give you a V.A.T. registration through the V.A.T office.If you are under the V.A.T. threshold you can still register but will have to charge on your invoices. Forming a Company is another separate thing, and not always the best thing re returns etc, best to see an account on this .
You apply to a wholesaler and ask what their terms of business are for having a trade account.
As for trade discounts these will vary as Pete and Pete have said. Depending on which business group you will be in. Some suppliers ask for trade references, always a problem when you start, and others what quantities.you intend to sell . Most in building trade like a trade references.
HTH .
You apply to a wholesaler and ask what their terms of business are for having a trade account.
As for trade discounts these will vary as Pete and Pete have said. Depending on which business group you will be in. Some suppliers ask for trade references, always a problem when you start, and others what quantities.you intend to sell . Most in building trade like a trade references.
HTH .
Cheers for the replies guys.
I've been in contact with two companies i would like to buy from and they both offer great prices for the products i want,. But they are asking for two references and business details. The business details are not a problem but the references are. How can you get references when the only companies you are likely to get them from are the ones you are trying to get a trade account with :angry:
I have no problem with a minimum spend or with paying up front for the goods. I just wish it would be easier sometimes to start a business lol.
I've been in contact with two companies i would like to buy from and they both offer great prices for the products i want,. But they are asking for two references and business details. The business details are not a problem but the references are. How can you get references when the only companies you are likely to get them from are the ones you are trying to get a trade account with :angry:
I have no problem with a minimum spend or with paying up front for the goods. I just wish it would be easier sometimes to start a business lol.
Hi Al
I guess that they are interested in your credit rating if they are going to open a trade account where payment is normally made on a 30 days credit basis. Perhaps you could suggest paying for the kits up front for the first year and revisit the issue after you have been a customer for a year of so?
peter
I guess that they are interested in your credit rating if they are going to open a trade account where payment is normally made on a 30 days credit basis. Perhaps you could suggest paying for the kits up front for the first year and revisit the issue after you have been a customer for a year of so?
peter
Al', when I started on the road to being self employed way back in 1970, I had to give references galore. They didn't have to be from people you were hoping to trade with, but rather Character References from people in the higher echelon of public life. I knew a Justice of the Peace and the other was a Barrister. Both gave good references about my character. And in those days that was all that was needed to open all sorts of doors......
G
The age old problem Al.
Think Peter is right, offer to pay upfront for a start . Once you have built up a relationship and a good payment record you could speak to the accounts dept.
Good luck
Think Peter is right, offer to pay upfront for a start . Once you have built up a relationship and a good payment record you could speak to the accounts dept.
Good luck
Hi Alan
I run myself as a limited company and its very easy to register a company name on the company's house website ( £14 I think), once you have established your company name, HMRC will send you a certificate of incorporation with your unique company number. VAT is a different beast, as long as you don't earn I think in excess of £85k a year then you don't need to be VAT registered (You will get a separate number for that!). I think as John said it would be wise to see an accountant, as also they will be able to tell you there cost for keeping book and providing pay rolls etc. HTH!
I run myself as a limited company and its very easy to register a company name on the company's house website ( £14 I think), once you have established your company name, HMRC will send you a certificate of incorporation with your unique company number. VAT is a different beast, as long as you don't earn I think in excess of £85k a year then you don't need to be VAT registered (You will get a separate number for that!). I think as John said it would be wise to see an accountant, as also they will be able to tell you there cost for keeping book and providing pay rolls etc. HTH!
Hi Al. Not sure about the needs for registration today, it was nearly thirty years ago that I was self-employed and I would be really surprised if things haven't changed since then. If you can stay below the VAT threshhold and therefore not have to register, that would help a lot as you can undercut the competition if you're selling to retail customers.
One thing I would recommend though - as the guys have said - get hold of a good accountant. Don't use him for bookkeeping as that will be expensive, but you're going to need one at the end of each year to certify your tax accounts anyway, so it's worthwhile as a good one could save you more in taxes than he costs.
One thing I would recommend though - as the guys have said - get hold of a good accountant. Don't use him for bookkeeping as that will be expensive, but you're going to need one at the end of each year to certify your tax accounts anyway, so it's worthwhile as a good one could save you more in taxes than he costs.
Cheers guys. Been doing the sums and whilst some items would make a profit, others would make a loss even at trade prices. Ah the joys of postage (especially for items over 10Kg) and online fees. I sometimes wonder how and why some people sell at a loss and still remain viable.
I'm going to pay Business Gateway a visit and see if they can shed some more light onto things. My friend (he's a manager of a depot) has said he'd give me a reference so that might help a little.
I'm going to pay Business Gateway a visit and see if they can shed some more light onto things. My friend (he's a manager of a depot) has said he'd give me a reference so that might help a little.
For items over 10kg open an account with UPS and use their drop off points rather than have them collect, I rarely use them but if I’m sending to a business it will cost me under £4, but they won’t take aerosols that’s why I use DPD, you can also get good rates from Royal Mail using their tracked service, you can send up to 20kg, but your prices are based on average weight, if I have anything over 3kg I use DPD to keep my Royal Mail price down
Don‘t worry about being VAT registered, I think its set at 88k now, and I wouldn’t go limited at first, I would wait to see how you get on, lots more paperwork to do.
If you need a trade reference you can put me down, just give me some more info before you do.
But as you said the fees can make a difference to your profits, you would be better also having a website, hopefully repeat customers will buy direct
Don‘t worry about being VAT registered, I think its set at 88k now, and I wouldn’t go limited at first, I would wait to see how you get on, lots more paperwork to do.
If you need a trade reference you can put me down, just give me some more info before you do.
But as you said the fees can make a difference to your profits, you would be better also having a website, hopefully repeat customers will buy direct
Cheers John. I never thought about UPS as i always saw them as being an expensive company (granted i was buying from the US). I've only ever used Royal Mail and Hermes for posting things so know nothing about other couriers.
I wouldn't be selling aerosols but some of the items are not allowed via Royal Mail (disinfectants for bio-security) so other carriers are essential. The maximum weight i expect to post is 20Kg. Any more then that and it would probably be cost prohibitive.
I think i am going down the 'sole trader' route at first because of the red tape and fees involved with incorporation and yearly accounts. With self-assessment i think it is quite straight forward.
I know this has digressed away from the original question regarding trade accounts but everything said is really welcomed.
A website is in the planning and i'll have payment options on it, although there are obviously fees for that too (just not evilbay ones).
I wouldn't be selling aerosols but some of the items are not allowed via Royal Mail (disinfectants for bio-security) so other carriers are essential. The maximum weight i expect to post is 20Kg. Any more then that and it would probably be cost prohibitive.
I think i am going down the 'sole trader' route at first because of the red tape and fees involved with incorporation and yearly accounts. With self-assessment i think it is quite straight forward.
I know this has digressed away from the original question regarding trade accounts but everything said is really welcomed.
A website is in the planning and i'll have payment options on it, although there are obviously fees for that too (just not evilbay ones).
That bit is easy, just email or phone them asking for trade terms, some might have minimum value first orders and most will put you on pro-forma to start with, some might never take you off pro-forma, especially if they are abroad, but most will send you trade prices, I don’t know what you will be selling, but don’t expect large margins, modelling products are quite low compared to other industries, what you’re selling might be the same.
I used to be a buyer for an electrical wholesaler and the RRP on cable was 95% profit if it was sold at full RRP, no one ever did.
John you're in the clear. I aint dipping into your profits :tongue-out2:
I'm looking into smallholding/crofting/agricultural supplies. I've dipped my toe into it and made a profit on the items i sold with people coming back for more, returning customers if you like to call them that. I'd like to up my scale a little so i can make a little more profit. This is initially going to be a part time job as i have a full time paid job on the farm. But. I have the option later down the line to go full time into this should it go the direction i want it to go.
Thanks for the offer of a reference as well. I shall let you know later all the details and then you can make a judgement call.
I'm looking into smallholding/crofting/agricultural supplies. I've dipped my toe into it and made a profit on the items i sold with people coming back for more, returning customers if you like to call them that. I'd like to up my scale a little so i can make a little more profit. This is initially going to be a part time job as i have a full time paid job on the farm. But. I have the option later down the line to go full time into this should it go the direction i want it to go.
Thanks for the offer of a reference as well. I shall let you know later all the details and then you can make a judgement call.
My margin on petrol sales when I ran a garage (as a franchise operator) was a staggering 2p per gallon - and I had to stand the losses from drive-offs' out of that! Of course that was back in the day when it only cost about £2.50 per gallon.
The margins on the products i intend to sell are small for some things and bigger for others. It all depends on the quantities the customer buys. There are one or two that would be a negative profit should i decide to sell them at certain quantities but they are the most requested ones. I cannot understand how suppliers make a profit on those (if they do) as i know what the manufacturer/wholesaler sells them for.
I used to be in Sales & Marketing for a major electrical manufacturer, and the wholesales used to tell me they sold cable at a loss, or at cost, and depended on a yearly volume rebate from the manufacturer to show a small profit.
Alan, could it be that the manufacturers give their larger customers a rebate when they exceed a certain volume?
Pete
Hi Al
I agree with the comments about speaking to an accountant, or more specifically a tax accoutant. As a sole trader there may be a number of 'day to day' expenses which you can claim as business costs and reduce your income tax. you have different tax rules in the UK than we do in Guernsey but here are a few thoughts:
- petrol and / or depreciation on your car if you have to drive to the post office, or collect goods from suppliers. I would expect this to be based on the percentage of business milage compared to personal milage,
Where this can really be a benefit is if you can include or combine what would be 'normal' activities, for instance combining a weekend at a modelling show with a visit to a nearby supplier and the costs of getting to the area/show/supplier may become a business expense; or taking things to the post office as part of your weekly shopping trip.
I knew a chap in the 1980's who ran a mobile disco, he was able to claim 1/3 of his haircut costs as a business expense on the bais that he had to have his haircut more often due to being a DJ!
Peter
I agree with the comments about speaking to an accountant, or more specifically a tax accoutant. As a sole trader there may be a number of 'day to day' expenses which you can claim as business costs and reduce your income tax. you have different tax rules in the UK than we do in Guernsey but here are a few thoughts:
- petrol and / or depreciation on your car if you have to drive to the post office, or collect goods from suppliers. I would expect this to be based on the percentage of business milage compared to personal milage,
- internet and phone costs - even if you do not have a separate line for the business you may be able to claim part of the costs,
- if you have to keep a store room heated then those costs may be attributable,
- costs of attending trade shows.
Where this can really be a benefit is if you can include or combine what would be 'normal' activities, for instance combining a weekend at a modelling show with a visit to a nearby supplier and the costs of getting to the area/show/supplier may become a business expense; or taking things to the post office as part of your weekly shopping trip.
I knew a chap in the 1980's who ran a mobile disco, he was able to claim 1/3 of his haircut costs as a business expense on the bais that he had to have his haircut more often due to being a DJ!
Peter
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