Small Side Business - Tax?

fengirl_2

Pluto's advice is a bit dangerous - if you are working for people for money - especially people who are themselves in business and therefore claiming what they have paid you against their own tax, then its a bit dangerous to just 'wait and see' if you make any money. HMRC would take a dim view of this. Also, as I said in my first post, you can claim loss releif if you do end up making a loss.
As far as expenses are concerned, you need to keep accurate records of all your business expenditure - everything from film (does one use that nowadays?) to paper, postage and mileage. If you use a room at home for business, then you need to include an allowance for that as well as phone calls, etc. You can claim capital allowances of 20% pa on equipment. It does not matter that the equipment was bought before you started in business - you make your base cost your estimate of the value of the equipment on the date you started to trade. Whatever is reasonable will be accepted. Business Link or your local Tax Office may do short workshops on record-keeping, but the main rule is if you bought the item because of the business, then you include it in your accounts.

Big_Steve_5

Thanks again to everyone who has taken time to answer me.
I have decided that the only way forward is to get myself registered, so how do I go about it?
The whole area of what records I should keep, what I can and can't claim against seems to be a small minefield, can anyone point me at a useful resource to assist me?
One thing for certain is that I want to remain legal, and who knows, if I register it may give me the push to build a business, which has always been my dream.

fengirl_2

To register as self employed go to www.hmrc.gov.uk and you can do it online or via their helpline.
There is only one rule for what expnses you can include in your accounts and that is that the expense must be incurred wholly and exclusively in the business. So, you just need to ask yourself - why am I buying this? If the reason is in order to work as a photographer, then you include it in your self employed records. If you can put all the income and expenses through a separate bank account, then that will also make things easier. keep all your receipts and copies of all invoices issued. It will also help if you make a couple of simple spreadhseets - one for income and one for expendtiure. At the end of the year's trading, you make up a simple profit and loss account and claim your capital allowances (for equipment) on your self assessment.
Business Link may do a workshop locally for newly self employed people to help you.

PlutoinCapricorn

That is a very good point you made about how formal, official registration may give you some incentive to build the work up: this would make all the effort, record keeping etc. worthwhile, otherwise it can be overkill.

You can't look into the future and see how much you will be earning, but if you want to be legal it is best to register and this will come in useful if your dream does come true.

The idea is that you register once you have some definite work. You will get a tax form next April, and the deadline for completing it is January 2011, which gives you plenty of time to do the necessary research. Just keep good records in the meantime.