tax question. self employed sparks.

[dan35]

Hi all just a quick question , I'm looking at going self employed in a year or so and looking to buying more tools , tester ,ladders ,etc whilst I'm still employed. If you buy the gear now and keep the receipts is it still tax deductible in a year or so or would I be better off saving and buying gear when I start up on own??
Cheers

 

[dave274]

I think you would just have to put it through your books as an asset introduced to the business with the estimated value then it would be deducted from your profit.

 

[dan35]

Thanks Dave lots of things to look into before I make the step.

 

[SYKRAPS]

Could you not just sell them to the company when it starts up?

 

[Redvanman]

Investment capital tools, van, materials anything that you bring into the new business good luck with it

 

[dan35]

Cheers redvanman can start saving and picking up good deals when I see them

 

[Octopus]

This is worth a read:

HM Revenue & Customs: Starting a business

 

[Kate]

Do whichever is easiest for u...don't rely on tax deductibles. There's no guarantee u would do enough work in your first 'year' to get a tax rebate. I'm not up on tax legalities, I have an accountant to do that. But if u don't earn enough net profit (?) u dont pay tax, if u dont pay tax u don't get a rebate. Year is classed as a total loss.

 

[Octopus]

Do whichever is easiest for u...don't rely on tax deductibles. There's no guarantee u would do enough work in your first 'year' to get a tax rebate. I'm not up on tax legalities, I have an accountant to do that. But if u don't earn enough net profit (?) u dont pay tax, if u dont pay tax u don't get a rebate. Year is classed as a total loss.

And this is a very good point. Before you take the plunge, make sure you have plenty of cash in the bank so you can cover your day to day costs. Its tough out there and expecting to get work for 48 weeks of the year is very tough, and you don't get sick or holiday pay!

 

[Kate]

That's the most important...always always have spare money!!! U buy your own materials, only so many times wholesalers will accept an extension!! If u are going to be one man, u will find most, if not all of your customers will not pay until a job is completed and then u have to give them time to pay. U may be able to get some material costs up front but not always. So u may find yourself paying for materials months before u actually get paid.

 

[dan35]

Thanks for advice everyone!

 

[Kate]

Sorry if this bums u out but it needs considering I enjoy self employment! U also need to consider start up costs, part p registration, insurance, business cards etc.
actually best advice I can give u, is go self employed gradually. It doesn't matter how much advertising u do, it's all about networking/contacts and reputation. My advertising gets me about 5% of my annual work if that, I do not pay for advertising now, nor do I have a website. I don't need it, I built my rep up the hard way and gradually over about 18months.