Some advice on starting my own work

mechbee

Thank-you all for or advice so far its been very helpful, I just have a few other questions:

1) If someone earns more than 60k per annum they need to start charging tax to customer?

2) If someone earns less than £6035 in this tax year, does this means the HMRC does not need to know anything about this.

3) I am quite nervous about actually, trading myself and directly charging a customer money for a service, even though I believe they would be getting a quality service and good value for money. Does anyone have any experience of this and any advice?

4) Am I allowed to have my own logo, business cards, paper formats, website, etc. without having my own company?

Thank-you

Horace

Hi

If you are a sole trader which a lot of us are (self employed) then you can have your own logo and business cards etc - otherwise how would you be able to trade?

At first you won't need to register for VAT - you can get more advice on this from the HMRC.

If you earn less than £6K a year, you can apply for working tax credits and even an NI exemption certificate - again you get these from the HMRC - they are very friendly and helpful. https://www.hmrc.gov.uk

If you are thinking of setting up a business - I would advise you to contact your local branch of business link as you can get lots of free advice from them about setting up a business and the legalities of undertaking such a venture https://www.businesslink.gov.uk

Sure its scary charging people - to gauge the right price for you - look at your competitors and see what they charge and pitch yourself somewhere in the middle. I have even been known to ring up my competitors posing as a customer to find out their charges.

HTH

PlutoinCapricorn

It is a very good idea to list all the aspects of having a show of your own - Business Link is indeed a good source of information - and do some research into the basics and familiarise yourself with the rules. Self employed people need to be proactive and to understand the regulations.

Some MSE people have been given the wrong information by people on the Newly Self-Employed Helpline, so looking at HMRC's website for the official rules, bands and figures is a good idea. For example:

Income Tax - completing the return online is recommended

National Insurance

VAT

Other insurance such as Public Liability and Professional Indemnity

Record keeping

Allowable expenses

Marketing material

Finding clients

Setting charges

You have not said whether this is on top of or instead of a regular job where you pay income tax and NI under PAYE. If you are self employed only, do you understand how this can affect your eventual state pension and benefits?

I was able to find clients from former colleagues who had already seen the quality of my work. Cold calling and advertising makes things harder. What have you got to offer that your competitors have not?

PlutoinCapricorn

I have seen your other post, I now understand that you will be offering tutoring services.

A lot depends on your expected income and client base: if it is just a friendly arrangement with your family and friends for "pocket money" then formalising everything and treating it is a serious business with a major income stream is not necessary. Many people who earn a little bit extra from unofficial activities do not even register as self employed never mind having a limited company, they just fill in a self assesment tax return. There is no point in registering as a sole trader for the sake of £250 per year earned by cleaning a few neighbours' windows!

However, being a sole trader gives you some authenticity, it shows that you will be paying tax if necessary. Some companies will only give work to registered people.

As for the bank account, again it partly depends on the scale and
the volume. I trade under my own name, and use my personal bank account as the number of transactions is low. It may be difficult to pay cheques in if you have a trading name, and if you were buying and selling on a large scale the bank might suspect that you were running a business. People use their personal accounts for their salaries and benefits, you could use yours for the tuition fees.

mechbee

In response to PlutinCapricorn, I will be a student so will not be recieving any taxable wages. Does any student bursaries (tax free) count towards personal earnings? Thanks.