Self Employed Starting Out

kw03cd

My BF is trying to work as self employed after being flung off benefit. Have no capital but seems to have worked out that they can start up using money from their OH's wages. What is worrying them is the cost of employing an accountant and paying for business banking alongside scrimping to start up. OH doesn't earn enough to get loans. Does anyone have any practical suggestions re starting up. Job Centre were no use as were small business unit.
Please don't say things like it is a stupid idea.

Flashdaisy

What type of business does your BF want to start?

Conor_3

kw03cd wrote: »

My BF is trying to work as self employed after being flung off benefit. Have no capital but seems to have worked out that they can start up using money from their OH's wages. What is worrying them is the cost of employing an accountant and paying for business banking alongside scrimping to start up. OH doesn't earn enough to get loans. Does anyone have any practical suggestions re starting up. Job Centre were no use as were small business unit.
Please don't say things like it is a stupid idea.

Firstly, I'd like to say congratulations.

Regarding the costs...

Virtually everyone offers FREE business banking for the first 18 months. He'll need to make up a business plan to present to them when applying. It's credit checked as well so if in doubt, it's always worth applying at your own bank first. As I said, they're all free for the first 18 months and I don't think any give interest on balances so there's not much to choose between them in that period.

Accounts. Unless it's complicated, there's no reason why he can't do his own if he's doing it as a sole trader. I've done my own for the last 3 years with little problem using little more than an Exel spreadsheet. The trick is to keep on top of them and not leave it until the week before the SA deadline. If he does want an accountant to check them then provided he's kept clear easy to understand books, an accountant would check them over for under £200. It's when you give them a carrier bag full of receipts and a load of paper which you call invoices and then tell them to sort it out that it gets expensive.

The only bill you have to worry about, other than expenses, which MUST be paid is the quarterly Class 2 NI bill he'll get which is £29.30 a quarter. Other than that, the first date he'll have to pay tax on any profit from this tax year is January 31st 2010 but that will be 150% of the tax bill with another 50% due in July 2010 as the year following the first year you make a taxable profits' tax bill is paid in advance on account based on the first taxable years income if that makes any sense. So if he doesn't make any profit in this tax year, he won't have a tax bill to pay in 2010 or any subsequent year until he does but as I said, the 150% / 50% rule applies the first year anytax is due.

Your local Business Link should be able to help you with a basic bookkeeping course which they run regularly and councils/chambers of commerce regularly hold events for small businesses and new start ups.

Oldernotwiser

kw03cd wrote: »

My BF is trying to work as self employed after being flung off benefit. Have no capital but seems to have worked out that they can start up using money from their OH's wages. What is worrying them is the cost of employing an accountant and paying for business banking alongside scrimping to start up. OH doesn't earn enough to get loans. Does anyone have any practical suggestions re starting up. Job Centre were no use as were small business unit.
Please don't say things like it is a stupid idea.

I'm a bit confused by your post; how many people are going to be involved in this venture and is your BF the same person as "their OH"?

LittleVoice

Perhaps BF is best friend rather than boy friend?

Horace

If the friend is on JSA then he/she could join the New Deal for Self Employment - this is a scheme where you set up your own business and work with the chamber of commerce who help you set up the business and you test trade for 6 months whilst still getting JSA (the business earnings go into a bank account from which you are allowed to withdraw expenses only until such time as you come off JSA).

The local chamber of commerce or business link would be able to offer advice on setting up a business - unless the idea isnt viable and they will say so.

When setting up a business you need to register it with the HMRC (Her Majestys Revenue & Customs) within 90 days of setting it up otherwise you will be stung for back tax. The HMRC also run some free courses on becoming self-employed and how to complete a Self Assessment tax form.

kw03cd

Oldernotwiser wrote: »

I'm a bit confused by your post; how many people are going to be involved in this venture and is your BF the same person as "their OH"?

Best Friend.

Relevance and help?????

Oldernotwiser

kw03cd wrote: »

Best Friend.

Relevance and help?????

Why such a shirty answer? :mad: It hadn't occurred to me that BF meant Best Friend and my misunderstanding on this and your use of the word "they" all the time made it rather confusing. I can't see any point in offering help until the situation has been clarified.

I'd advise your friend to contact Businesslink.