Want to set up as a sole trader

momoyama

Can anyone please advise?

I work full time. I have a student loan (from 1997 - the old system). I defer my student loan each year due to not earning enough.

I also run a Martial Arts club. This is "non profit making". I put this in inverted commas because we're financially surprisingly well off. Certainly far better off than we ever thought we'd be. Not a penny goes in my pocket, though, other than covering my expenses. In theory, all profits are ploughed back into the club to buy equipment etc.

I keep being asked to do private lessons or things like after-school clubs. I've always worked on the basis of not taking money for what I do. I do what I do because I love it, not because I need to. However, with wedding impending I'm increasingly of the mindset of why shouldn't I make some money out of it? I've invested thousands into my training over the years (and loved every minute, don't misunderstand me)

I'm therefore considering setting up as a sole trader. Just making the odd couple of hundred quid here and there. Certainly nothing substantial.

Is this a good idea? Would/could it affect my student loan?

Am I right in thinking that the sole trader company and I are essentially the same thing? Am I also right in thinking that I'd have to pay so much NI per week (£2.40 is it)? Even if I'm earning so little?

Any advice gratefully received.

fengirl_2

I can't tell you if this is a good idea or not, as its really up to you.
However, if you decide to go ahead, you need to register with HMRC as soon as your income starts. You would have to pay £2.40pw class 2 NIC, but this can be exempted if your self employed income is under £5035pa, which it looks as if it would be. Your profits would count towards your income for student loan purposes.
Yes, you are correct, the business and you would effectively be the same.

momoyama

fengirl wrote: »

However, if you decide to go ahead, you need to register with HMRC as soon as your income starts. You would have to pay £2.40pw class 2 NIC, but this can be exempted if your self employed income is under £5035pa, which it looks as if it would be. Your profits would count towards your income for student loan purposes.
Yes, you are correct, the business and you would effectively be the same.

Thank you. That's really helpful. I'm expecting to earn under £1000 per year. Even that much would tip me over my student loan threshold. I suppose the answer to try to earn enough to negate the effect of the student loan.