Setting Up Your Small Business: trading, tax and trademarking

Taking the leap from hobby to small business can seem daunting, but it doesn’t have to be with the right knowledge under your belt. From trademarking your name to understanding tax, there are lots of factors that you need to consider, and get right, when starting up your small business. With a little help from this blog, you’ll easily be able to understand what applies to you and what you need to have ticked off your list! 

Trading

A vital part of any business whether you’re big or small is insurance. Even if you don’t see yourself as a big or established business, you’re still under the same legal obligations as any other business out there but that doesn’t mean that you’ll have to pay the same insurance costs. It's also worth noting that often, you’ll need proof of public liability insurance for things such as craft fairs and market stalls. You can find out more about Insurance here in our blog.

When trading it's also important to ensure that you have a compliant CLP label for each and every product you sell. In order to sell your candles and craft products to the public, you must ensure that all of your products are CLP compliant. It’s important to review your CLPs often to ensure they are still compliant with current rules and regulations and you should also remember to check your CLPs to make sure that no ingredients in your products have been changed by your manufacturer. You can find out more about CLP Labeling here in our blog.

Tax

If you are a sole trader, it means that you run your own business as an individual and are therefore self-employed. As a sole trader, you need to pay tax on the profits you make. Sometimes as a small business, you may not need to set up as a sole trader, but if you earned more than £1000 from self-employment from April 2019 to April 2020, you will need to register. To set up as a sole trader, you’ll need to tell HMRC that you pay tax through Self Assessment, which also means that you’ll need to file a tax return every year.

As a sole trader of a small business, you’ll have some responsibilities, these include; keeping records of your business’s sales and expenses, sending a Self Assessment tax return every year and pay income tax on your profits and Class 2 and Class 4 National Insurance. You can find more help online on the .gov website if you’re considering setting your business up as a sole trader.

Trademarking

Trademarking is often very important for small businesses. A trademark is a type of intellectual property consisting of a recognizable sign, design, or expression which identifies products or services of a particular source from those of others. In short, it means that no one can legally copy your name, symbol or word, whichever you choose, without your permission. It's also important to get your brand trademarked as it will ensure that your business is protected against your competitors making it harder for other businesses in the same field to take or use your intellectual property.

So what aspects of my business can I trademark? In order to trademark something, it must be unique, but apart from that, you can trademark words, sounds, logos, colours and or a combination of any of the above. Exemptions include anything that is offensive, words related to the goods or services such as ‘candles’, anything that is misleading, any 3-dimensional shapes associated with your trademark, anything that is too common or non distinctive or anything that looks too similar to state symbols, flags or hallmarks. A full list of exemptions and their details can be found online. If you have similar versions of your trademark you can also make an application for up to six of these! You can also check if your trademark has already been registered by using the .gov online database.

It’s super simple to trademark your business and its hugely beneficial. All you have to do is head to the .gov website and apply to register your trademark. You can easily apply online and have your trademark within 4 months as long as there are no objections. Your trademark will then last for 10 years!

It’s important to remember to research every aspect of your business to ensure you are compliant with laws and regulations, but once you get stuck in, it’ll become second nature. For all your candle making and small business questions you can find out more online in our blog at www.suppliesforcandles.co.uk/candle-college.