Starting up design business whilst still working

Myrtle77

I used to be a creative manager/graphic designer until I moved into a wider business & fundraising role for a charity. Whilst I love my current job, the pay isn't great, so I'm starting up a design business to supplement my income.

My query is really about tax, vat etc. I'm about to send out flyers to potential customers, but do I need to declare myself as a business or self-employed before I start earning, or can I do it afterwards?

Also, what issues might come up if I have a job already?

fuzzball172

You need to register yourself as self employed within 3 months of the date you start trading or face a £100 fine. You only have to register for VAT if your turnover exceeds £67,000 per year. As far as the tax office is concerned I don't know whether they class your intent to trade as your start date or your first sale. I would phone them up to ask. Contrary to popular belief they are there to help and not just tap you for cash.
Some tax offices even run courses for the newly self employed to teach them what they can claim as expenses.

Issues as a PAYE employee, none unless your employer has any terms in your contract about having a second job etc... As far as the HMRC is concerned, you just fill in a self assessment form with a section about your PAYE earnings and a section about your self employed earnings... I've been doing that for 3 years now... absolutely no problems.. honest.

Good luck
Lee

PlutoinCapricorn

Many people are doing the same thing i.e. topping up their regular income with additional freelance earnings.

Your first port of call should be www.businesslink.gov.uk

According to some HMRC experts on here, the three months that you get to register as self employed have been reduced to one.

HMRC expect you to have started work before registering, as oppsoed to just registering on the off-chance that you can get some work. The start date is usually that date that you start your first official assignment. They do not expect you to register if you just earn pocket money as a hobby.

If your expected profit is £5,075 or more then you will need to pay £2.40 per week in Class 2 National Insurance, otherwise apply for a certificate of exemption.

It is definitely worth checking your contract of employment to see if there is anything about 2nd jobs. Possible tiredness is one issue, conflict of interest is another and so is using the facilities in the main job for outside work.

Keep all receipts for business expenses, invoice your clients, keep good records, and good luck with your business.

moneymabel

Hi Myrtle, I'm in 'sunny' (ha ha) Devon as well. I'm employed part-time and also have a small business selling wedding jewellery. I do my self assesment on-line every year and as fuzzball says there is a page to put in your PAYE earnings. It's easy -honest! -if it wasn't I couldn't do it lol

fengirl_2

Just to correct what fuzzball has said, the 3 mth grace period for registering as self employed has now been abolished and you are required to register 'as soon as possible' after you start to trade. I would wait until you issue your first invoice as there is no guarnatee that this is going to be a success.

Nednats

fengirl wrote: »

Just to correct what fuzzball has said, the 3 mth grace period for registering as self employed has now been abolished and you are required to register 'as soon as possible' after you start to trade. I would wait until you issue your first invoice as there is no guarnatee that this is going to be a success.

Abolished? are you sure?
When did it change?
I'd check this. I went on a course last month ran by the tax office and I was told you have 3 months from the time you have the abillity to trade.

fengirl_2

Here is the link
http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm
I think its to stop people getting into arrears with their class 2.

fuzzball172

It is quite possible that the rules have changed, but all the offices have yet to be informed. I know a few people who work in various departments around the HMRC and they are usually the last to know.

Lee

Flower7_2

I've been in business for a few years and still phone the tax office whenever I've got a query - they are really helpfull and 'open' quite late at night. - The helpdesk for new employers especially good. I've always had the attitude to do everything by the book then you can sleep at night and if the tax man comes acalling then you can welcome them with a smile and a cup of tea! Record notes on any conversations with date time and name then if there's ever a problem you can always refer back. Don't blame you for working and starting your own business - it's better to build up slowly (without debt if possible) I went from working fulltime employed to part time and part time s/e then full time s/e and have never looked back. As long as your prepared to put in the hours and realise it's not 9 - 5! Good Luck to you

Myrtle77

Thanks for all the helpful replies. Sounds like it won't be too complicated, which is huge relief. I just need to run what I'm doing past the current boss to ensure there's no issues there.

fuzzball172

Going self employed wass the BEST thing I ever did...