Going Self Employed

chrisb1357

Hi all,

I am looking at going self employed soon in my local area. Am i correct to say i need to inform the Inland Revenue of my start date and also the Tax office. I will be going as a Sole Trader (Self Employed).

If anyone can give me any adivce that will be great.

Thanks
chris

fengirl_2

Yes, you need to inform HMRC as soon as possible after you start. Forms are at www.hmrc.gov.uk or you can ring the helpline. Inland Revenue is now HMRC and is the same as the tax office.

chrisb1357

Can anyone advise if i can use a normal bank account when going as a sole trader / Self Employed. I dont expect lots of work at the start but i have a spare bank account that is never used. Could i use this.

Also what Insurance would i need to cover myself when working in peoples homes

Chris

fengirl_2

It's good practice to use a separate bank account and any type of ac!!!! is fine. Its the separation of personal and business income which is important.

Not sure what you are going to be doing - take advice on insurance from a broker.

chrisb1357

Well i am going to be offering local computer support etc in my area as a part time test to see how i get on. I knows its going to be a risk trying it but you dont know until you do.

One thing that struck my mind is that i am living with family at the min. Would i need to inform my dads mortgage company that i am going self employed from home as well as his insurance company. All i will be doing is having a small desk in the house in our room, my mobile phone and printer.

Am i also correct that i would not need to pay bussines rates due to me only having a small desk in a room thats being used for other things,

Chris

chrisb1357

I have also seen on here that some people suggest not to register for Tax until you need to after 3 to 6 months when starting a very small company

fengirl_2

You need to register for tax right away as you will need to start paying class 2 NIC's.

I dont think your dad's mortgage company will be interested in your small operation, but you might like to look at insurance to cover customers' computers which you take home to fix. There will be no business rtaes.

fazste

you might want to have a look at public liability insurance and possibly indemnity insurance aswell. can't be 100% sure if you need both but will be worth finding out about to cover any eventualities. Also as far as im aware your house insurance should be okay as some don't really care that much though best check! if your working from home on a pc it can be classed as clerical work so won't have a big impact on your cost (so i was told by my business adviser)

Horace

You do need to register for tax right away because if you don't and the HMRC think that you have been trading for longer they will hit you with a huge fine. You will also need to pay Class 2 NIC but if your income is minimal then you can apply for an exemption but you will have to pay it eventually.

I also work from home and will charge a proportion of my bills for the home to my business e.g. electricity etc - I don't pay business rates either. If you are giving advice etc then you will need professional indemnity insurance and possibly public liability insurance (you will have to check this with a broker). With regard to the bank account - if you apply for a business account many banks will give you free banking for 3 years so that will help keep costs down.

Have a chat with Business Link too as they will be able to give you plenty of advice to help you set up your business.

Good luck.

Trespasser

Ah ...... I did this last month myself. This is what happened, you may find this useful.

Firstly I have been told by my accountant that I needed to register with HMRC within 3 months. I did this online and its painless ...... really.

The second thing I did was to get a business bank account, now this is where I thought I would get stuck as I have a bad credit rating and a couple of CCJ's. However .. the bank were fine with this and I stressed that I do not need credit or and overdraft facility, I got chequebook and paying in book within 10 days of seeing them. You need to keep your money and company money seperate .... one day you just might forget and go on a spending spree with your company funds.

Make sure your insurances are valid .... car insurance for business use, house insurance as you may be working from home, public liability insurance, and indemnity ..... incase you have a blonde moment. Get a PAYG mobile or simple cheap contract (EG:: O2 £9.70p 30 day rolling contract// 150 minutes free talktime // 300 texts ..(suits me ))

Finally have fun, but you need to be aware that no-ones looking over your shoulder or keeping tabs on what you do ... or don't do. Just because you work for yourself beware of the trap where you can have a day or two off ' because your the boss '.

I started mine on 1st April and its the best thing I could have done, the pay is crap, the hours are sh!te ... but I'm loving every stressful minute of it. I wish I could have done it 10 years ago.

For the work you do at home you can also claim some as expenses, phone, electric, water, mileage, sugar, coffee, milk ....etc. I have been advised that this is 'per norm' but dont take too much or you may have to explain yourself and then pay tax on it as it could be seen as 'payment in kind'.

PlutoinCapricorn

You say that you will be offering IT support part time, to see how you get on. I assume that you have a job where you are on PAYE? If so, you are getting the best of both worlds, and are doing something very sensible by testing the water before committing yourself.

It is early days yet, but do remember to put aside 20% of what you earn as a sole trader, in readiness for your tax bill.

There was someone on MSE in a similar position, and people listed some potential problems with IT support in connection with getting insurance.