How to start a small removal company Man with a Van Service

Starting a man and van business

If you are thinking of going it alone and setting up a small removal company or man with a van

Start your removal company

service. You will have to make some choices of what road you will need to go down. Regarding your tax status here are some options. Sole trader, partnership or limited company? You have decided that you want to run a removals business. Now decide how you will achieve this – starting a small removal company.

Sole trader man and van

Hundreds of thousands of people across the UK become sole traders every year. Many starting in the transport business with removal companies and smaller man and van concerns. Making this the most popular way to start a company. The reason? It’s easy and simple. As soon as you’ve registered with HMRC for Tax and National Insurance, which you should do soon after launch. You have a company you can call your own. The owners of limited companies may have to register their business a Companies House, but not a sole trader.
Sole traders can and do employ staff, but most often sole traders are people who are striking out on their own. When setting up in the removals business you may need help with labour. Unless you are targeting the “bags and boxes” market. Lots of young professionals are moving without the larger furniture items and usually rent flats and houses.
The business you create as a sole trader will be all yours. All the profits go to you but then so too do all the losses. So get stuck in get your advertising out there and start earning. This is important as you will be personally responsible for any debts that the business may incur. Often people form limited companies to shield their personal assets from any debts the business may make.
There are no legal stipulations for a sole trader to draw up accounts (although a basic record of revenue and costs should be a minimum for any company). Sole traders simply have to complete a Self Assessment tax return every year. Something they can do on their own without the help of an accountant. This can be done online at HMRC.
A key advantage for sole traders over other types of business. Is that normally they can deduct losses made in the first year from future profits or other income they may have. Obviously you won’t be setting out to make losses but, if it’s a possibility, this could be useful.
Look at your market and target your customers whether it is Manchester removals to London. Or even further afield into European destinations. Do not restrict yourself the world is yours to exploit.

Partnership

The removals sector is very competitive. It’s important to offer a good quality service so that your reputation allows you to charge realistic and competitive rates.

If you like the simplicity of the sole trader set-up but you’d rather other people were involved in your business (two heads are often better than one, after all). Then it’s worth considering a partnership.
Setting up a partnership is easy (just as it is to set-up a sole trader business). In that you’re a fully compliant trading entity the moment you register for tax with HMRC.
There is no legal requirement to draw up accounts. A Self Assessment tax return is all that is needed. If you’re likely to make losses in the first year or so, you can normally deduct them from future profits like a sole trader.
As the joint owner of the company you will split any profits with your partner. If there are any losses, you’ll be personally responsible for your share of the debt as well as those of your partners. You can get around this by forming a Limited Liability Partnership. Which although being more complicated to set up than an ordinary partnership, does reduce responsibility for business debts. In the same way as a limited company.
Partners often enjoy having someone else around who can help shoulder the workload. But, given that starting a business with someone can be more intense than marrying them. It’s sensible to get a solicitor to draw up a written partnership agreement before you start out. The agreement should deal with how the profits and work are split. Plus what happens if one of you decides to up sticks and leave.

Limited company

Sole traders or partnerships might be easy to set up. The fact that they don’t offer protection from a company’s debts makes a limited company a more attractive option for many. As a director of a limited company, and as long as you operate legally, your personal assets won’t be at risk if your company can’t pay back a debt.
Business people often choose to set up a limited company because they believe that to do so lends credibility to their endeavours.
Setting up a limited company is not difficult and is done by filling out a number of forms. All of which are available from the Companies House site. If you’d rather not do this yourself, there are companies that will set it up for you for a small fee.
The accounts for a limited company must follow a form set out in law. They need to be drawn up by an accountant then submitted to Companies House. The fact that you must use an accountant has an upside. They should be able to advise on how you can legitimately extract maximum value from your firm. (by, for example, supplementing your wages with dividends).
It is usual in the removals sector to request prepayment from customers. So most of your income is likely to be bank transfer and cash sales so make sure you record all transactions with receipts.
Business Link, types of company: © Business Link, 2011. Source https://www.gov.uk/set-up-business