Starting a Very Small Bussiness .

[moose]

Im a little confused as to how easy or hard it is to set up a small legal enterprise, Im not wanting great deals of work as im working for a company.

My only idea is to do the odd job maybe on a weekend, do some testing and move a socket etc, maybe a rewire as a rarity.

Im fine with registering with ELECSA and the required bits(Doesnt say how much test sheets are?), im happy to also register for a UTR number as a Sole Trader.

The Part im confused with is the payments to the HMCR.gov as a hole, What is required for the Self Assessment as there is no info on this unless you register and I dont want to register until I understand what I have to Pay out, is it worth my starting, hope you understand my thoughts.

Daft Ideas ive seen but still unsure.

1) I have seen a £2.95ish, a week is this all I would have to pay and would i get it back if a dont get any work?.
2) I know its easier to set up a bussiness Account once I have the UTR, but do I put money in here to start buying materials or only Work money ive gained from work.
3) I have been told to keep all receipts for Materials and sundries for VAT returns (im thinking i get the VAT back on the items). is there any other things i need to keep.

Any help would be so kind.

 

[telectrix]

first of all, don't register for VAT. not up to speed with the threshold, but it used to be £54K turnover. all i would do for now is keep all receipts, use a diary to record income and expenditure, then at the enf of the financial year ( march). work out how much you have made, then ring HMRC and ask their advice, telling them that you have done some work for yourself and how much profit you have made ( if any).

 

[Octopus]

Go and see an accountant.

Just remember ALL of your personal allowance will be used by your "employed" salary so you'll pay 20% on every pound you earn, less the tax "offsets" allowed by HMRC.

 

[telectrix]

but if your wife/girlfriend is a stay at home, you can pay her about £130/week before incurring tax and NI as a secretary/telephone answerer etc.

 

[Octopus]

but if your wife/girlfriend is a stay at home, you can pay her about £130/week before incurring tax and NI as a secretary/telephone answerer etc.

As a sole trader, I don't think so.

 

[earwig1]

I think you might need to look through your plans again.

The costs you will incur to register yourself, test gear if you dont already own it & calibration. Day off for assesment as you work for someone else.

This doesnt make sense to just install a couple of sockets every now and then.

Personally I would get my test gear, and carry out small jobs not requiring notification. As works build up and you are thinking of going on your own, then take on the extra costs.

I would not register for VAT in your position - if you are working for domestic customers this will make you less competitive.

Just register with HMRC saying you carry out some self employed works. They will send you out a self assesment form to fill in each year. You can do this yourself.

If you get a couple of rewires or are planning on lots of small notifyable jobs then look at joining a scheme.

Good luck

Simon

 

[telectrix]

As a sole trader, I don't think so.

yes you can. i've done it for years. not now though, as the current 'er indoors is working.

 

[moose]

Thanks guys for the advice so far ,

See an accountant, would that be expensive?

If i didnt use the HM route till end of year how much money should I leave in the bank so i dont get a Heart attack, Rofl as i would have to pay the HM something im guessing.

 

[Hiddo]

As earwig says start small doing a bit here and a bit there. Ensure you tell the tax man what you are doing and declare every penny you earn.

It will be hard squeezing the jobs in because they will all come at once. You will have to be prepared for seven days a week and late nights.

That's how I started and I'm now expanding again because I'm so busy.

Good luck.

 

[telectrix]

do a weekly tally. money in/money out. say for arguments sake, you did 3 jobs in a week totalling £200. that goes as income. then on the out side, materials used, any tools bought etc. etc. say that comes to £80. then you have made a profit of £120, in which you need to set aside £24 for tax. at the end of the year, though, your vehicle costs are allowed at 45p/mile so if you've done 1000 miles for your private jobs, thats £450 to come off your taxable earnings. in the first year you should pay no tax. MFT, tools etc. all are deductable.

 

[Octopus]

Thanks guys for the advice so far ,

See an accountant, would that be expensive?

If i didnt use the HM route till end of year how much money should I leave in the bank so i dont get a Heart attack, Rofl as i would have to pay the HM something im guessing.

Most will give you an hour for free. Find a small local one to you and call them

 

[tbs1983]

Im in exactly the same boat, work for my local council and have recently registered with hmrc as a sole trader and set up my own small business which i do on evenings/wkends. I havent advertised at all yet ive got plenty of regular work coming in now. My next step is to join Elecsa which im doing end of the month. As stated above you will pay tax on earnings from day 1 as you will have passed your tax free allowance with tour normal job, but there are plenty of things you can deduct from your end of year profits to keep your tax bill down, especially in year 1 - multi function testers, tools, pl insurance, computer, printer, stationery, elecsa fees, vehicle maintenance costs, fuel etc etc etc, infact you may have more deductibles than profit, in which case you may get a tax rebate on your tax paid in your normal employment

 

[amlu]

do not forget to keep record of all them little jobs, changing a switch for £20 in cash etc... ;-)

 

[earwig1]

When i first started doing private jobs, i was also working for a company. All the profit i made for the first few years was ploughed back into buying every tool i could need. I was earning my wage during the week to cover bills. Anything extra went back into my business for the future.

After a couple of years i had enough to go it alone and a good barrier to employ a couple of sparks who i had worked for as an apprentice.

By doing this i had virtually no tax liabilities as my costs exeeded my income. As it has been said above, you might even get a rebate.

I would definetly work out all of the costs of becoming a scheme member and make sure it will be worth it to you. Work out the maximimum days you are prepared to work outside of your day job divided by costs. To earn the same amount per day as others you will have to charge a lot more as your costs will be split over a lot less days.

There is no point in working hard just to pay your costs

 

[rare breed]

Do not forget you have to register for class 2 National insurance as each employment requires it if you want to be fully legitimate.