Help Starting up - what do i need/where do i get it

Confusedone_3

Hello Everyone

Im new here so please be gentle!!

Basically i am looking to start up my own shop online, i have bought the domain and have a host and am in the process of getting the website developed. But i have loads of questions:

1. Do i need to register the business, even if its not a Ltd Company?

2. Do i need to register for VAT even though i dont expect to make over £67,000 a year (as yet)

3. Can i use my home address as the business address as it will be an online site, and can i use my mobile/landline - or how easy is it to get your own Buisness number/line installed

4. If i wanted to open a business bank account wat information would i need - as its just registering/starting up can i open one?

5. I will still be working my own job, but would like to obviously use the profit i make eventually, so could i just give myself a wage etc or is there some complicated process i need to go through to take the money out! Would i be self employed and need to do a self assesment every year..

Ok i think that is all!! Any help would be much appreciated!!

fengirl_2

In answer to your queries:
1. You need to register with HMRC within 3 mths of starting - you can do it through www.hmrc.gov.uk
2. No
3. Yes, provided there are no restrictions in your lease/deeds to your house. I would imagine that if there are not going to be hundreds of callers at the door, no one would know.Its easy to get a business line, although BT charges more for line rental and I dont think you can get the free calls packages.
3. You should open a business bank account or at least a separate bank account for business. Ask your bank what info they need - I imagine it will be the normal ID stuff.
4. yes, you would be self employed. As a sole trader, there is no complicated process for taking the money out of the business as you and the business are one and the same. Just make sure you keep bomb-proof records of all your income and expenditure (which is why a separate bank account is good). You will self assess each year and pay any tax due in Jan and July following the year of assessment.

TCM_3

Hi there
Good luck with your new business. I would register the company anyway but as a sole trader you would not have to publish your accounts anyhow. Take what are called "drawings" out of the business rather than a salary - these cover your living expenses. If you keep records of your phone bills etc you should be able to claim this on your tax return. VAT is a tricky one... you will benefit in some ways as you can claim it back on your purchases and overheads but you will also have to pay it on sales regardless.
Hope all goes well for you. Its not an easy time for any business at the moment but keep your overheads as low as you can until you see how things pan out and keep your stock at a managable level.
T xx

Savvy_Sue

fengirl wrote: »

3. Yes, provided there are no restrictions in your lease/deeds to your house. I would imagine that if there are not going to be hundreds of callers at the door, no one would know.

Just to amplify this: if you are a tenant (particularly with a social landlord) then your tenancy agreement may say you cannot run a business from home. However if you ask for permission to do so, it may well be granted, as long as it is not going to cause a 'nuisance' or hamper the right of your neighbours to 'quiet enjoyment' of their property.

Your mortgage lender may have a similar restriction, or at least require you to tell them you are running a business from home.

Your insurance company also needs to know. Even if you tell them that you do not want to insure the business stock, they need to know. I believe someone on this board recently said that their insurer now wouldn't cover them for break-ins - even though they didn't want cover for the stock, they now couldn't get cover for their contents.

Confusedone_3

Hello thank you all for your replys, i do not rent i own my own home and have no mortgage on the house. I will not be keeping stock at my home as i have managed to arrange drop shipping style from the designers, until i decided whether to open up a shop. So will i sill need to check the deads/insurance?

TCM, i have heard about drawings - how do they work if you dont mind me asking? on the accounts how would i mark them down?

I was thinking of using www.companiesmadesimple.com, which also give you the option of using their address for a few months - so i can see how the business is going to go, whether to expand into an actual premises!

Thank you all for your help, i shall try and get a business account open! Do i need to keep note of any costs i have already paid, i.e web design/domain name registration/hosting as some sort of capital injection into the business

fengirl_2

re use of home - there may be a covenant on your property to prevent you from trading from home, but as I said, if hundreds of people are not turning up at the door, who is to know.
Drawings you just include in your book keeping under 'drawings'. This is just info for the balance sheet - its your money, so you dont operate PAYE on it or do anything special.
The website you have shown is for limited companies which does not apply to you as a sole trader.
Yes, you should keep a record of what you have spent so far and this will be regarded as capital introduced in the balance sheet.

TCM_3

Yep, on your accounts at the back of the tax return there is a section for drawings and how much you took out of the business to "live". My OH is on drawings and i'm on a salary as I am employed by him. He takes enough to cover the mortage and basic living costs then my salary can fluctuate as needs be. Do a basic costing of your personal expenses and cost of living then take what you think you will need to live on as "drawings". The amount of profit you make in the business is counted as "earnings" and you would be taxed on that. You would pay your NI contributions quatrerly yourself but have no PAYE as that is all done in your tax return.
It sounds more complicated than it is. Just keep good accurate records of everything and you'll be fine. Also look at working tax credit as you may be able to get it
Good Luck
T