Self employed while being employed.

Baxter111_2

Hi Guys,

I am currently employed and receiving £8000 per year, i was earning £15,000 until the company started struggling and they have dropped our wages.

I have recently found out that my girl friend is pregnant - as you probably all know £8000 per year isn't enough to cover house costs and also needs for baby's......

I am looking to set up a small IT Solutions company helping home users and also small / medium sized company with there IT problems.

I just need to know what steps I need to take with regards to tax and being self employed??

Thanks,

Scott

fengirl_2

First you need to check that your contract of employment does not preent you from doing this.
You need to register with HMRC once you have started to trade, ie you receive your first income. There is no point in doing anything until you are sure people are going to use you. You can do it online at www.hmrc.gov.uk.
Make sure you keep accurate records of all your income and expenditure so that you can produce your accounts at the end of the year.

Baxter111_2

fengirl wrote: »

First you need to check that your contract of employment does not preent you from doing this.
You need to register with HMRC once you have started to trade, ie you receive your first income. There is no point in doing anything until you are sure people are going to use you. You can do it online at
Make sure you keep accurate records of all your income and expenditure so that you can produce your accounts at the end of the year.

fengirl - thanks for the reply.

Would a small sage accounts package help??

pitkin2020

sage is compicated and way over the needs of a basic home business, if you know how to use then fine it will be good.

you have 3 months to register with HMRC from the start date of you business

Baxter111_2

Other than sage, what would you suggest??

pitkin2020

excel, quickbooks, depends on wheter you plan to do your final accounts yourself or if you are involving an accountant.
Personally i used excel to list all my income and expenditure then the accountant did the rest.
If you use something like quickbooks it will help with your final accounts.
Im not dismissing sage if ou know how to use it properly it is a very powerful tool for accounting, but if you dont know how to use it then you will really struggle to get what you want from it

fengirl_2

To correct pitkin's post, you no longer have 3 mths in which to register with HMRC. The rules have changed and you need to register as soon as possible after you start to trade.
I do, however, agree that a spreadsheet is quite sufficient to record your ins and outs to start with.

Zazen999

I would also suggest attending the half day SE workshops if you've never been SE before, it gave really good info on what records to keep and how to keep them. It really is much simpler than you think.

Baxter111_2

Ok thanks guys.

Where can i find out about SE workshops??

Zazen999

Local tax office, once you have registered as SE.

PlutoinCapricorn

Many people have a 'sideline' where they are their own boss, while continuing to get a regular income from their employment. It is a good way to warm up slowly and see how it goes.

You do need to check your contract of employment where other work is concerned. Is your main job part time now? Your employer might be worried that you will be too tired to concentrate, that you might use their facilities for the other work and that there might be conflict of interest. For example, the tiredness issue might arise for someone who does accounting during the day and bar work evenings and weekends. Conflict of interest might arise where someone works in advertising during the day and also does freelance advertising work for other clients.

It is best to start as a sole trader, no need for a limited company at this stage unless there is a very good reason for creating one. I think that many sole traders could do their own accounts, provided that good records are kept. Do remember that where you take money from people for your services you should invoice them, and that where you give money for goods or services, you should get a receipt for your expense calculations. EXCEL is fine for many sole traders: one sheet for income, one for expenses, one for invoice lists and a page for summaries to transfer to the tax return.

www.businesslink.gov.uk should be your starting point.