You are here: Home: Business: Markets: Becoming a market trader

Becoming a Market Trader

Trader responsibilities

Yearly accounts

By becoming a self-employed market trader you alone are held responsible for the payment of your tax and national insurance contributions. If you are a married woman, you have the choice to opt out. You can pay your contributions by stamping a card, or by setting up a direct debit at your bank.

You must also keep a record of all expenditure / income in order to complete your yearly accounts. Grants and training may be available through the Business Link Programme which can help with book keeping skills.

If your turnover exceeds £54,000 in any 12 month period or less, it will be necessary to register for VAT. This means that if your goods are standard rated, 15% (or the current prevailing rate) of your sales will be paid to the Customs and Excise.

You are of course entitled to claim the VAT you have paid on your purchases. After your first year of trading, you will be required to submit accounts to the Inland Revenue, unless you wish to receive a very high tax assessment.

Many traders choose to hire an accountant who will give advice on bookkeeping and taxation and often save traders more than the accountant costs to employ.

Public Liability Insurance

You will also require Public Liability Insurance, which maybe obtained from the organisations below (alternatively you may wish to consult an Insurance Broker):

• National Market Traders Federation, Tel: 01226 749021
• M Imber Insurance Brokers Ltd, Tel: 0207 231 5005
• Combined Market Traders Insurance Association, Tel: 0208 500 8489.

Application forms are available from the Market Office.

Dealing with the law

As a market trader you must also be aware of the statutory legislation applicable to you.

If you are a food trader, particularly one that sells perishable products, you should make yourself aware of Food Hygiene Legislation such as statutory temperature controls when selling and transporting foods. If you use your own stall it will be necessary to register the address where the stall is kept. Consumer legislation, such as the Sale of Goods Act and the Trade Descriptions Act must also be strictly adhered to. For further advice contact your local Environmental Health Department.

If an article is brought back that is faulty or not fit for the purpose for which it was sold, then you must rectify the matter either by exchanging the goods, issuing a credit note or giving a full cash refund. It is the customers choice over which method is used.

Often goods may be returned that are not faulty but the customer has found the product was not really what they wanted, or in the case of clothing, it does not quite fit. In this case there is no obligation to make the matter right, but if you feel the reason is genuine, then in the long term it is better to do so. You may lose a sale on this occasion, but you have built some goodwill, and the customer will most likely return again and again. By adopting this attitude you may occasionally be taken for a ride by an unscrupulous and dishonest customer, but the good reputation you will build up completely justifies it.

You must always adhere to the Trade Descriptions Act. Don't sell counterfeit goods, and don't describe your goods incorrectly. If you are selling seconds don't describe them as perfect. If you are selling Egyptian new potatoes, don't describe them as English. If you do, you will eventually fall foul of the Trading Standards, and apart from the fine you will be facing, your reputation will be harmed.

Market trading can offer a long-term opportunity of self-employment and a springboard to greater things. Many casual traders go on to become permanent but this is not a guarantee of success. However if you have the right product, at the right pricing structure then with a bit of luck you will go far. Take a look at JJB Sports, Marks and Spencers, WM Morrison and Richard Branson to name but a few.

For additional guidance on a trader's responsibilities, see Guidance for commercial tenants.

back to top