Being self employed, where to start?

Deluks

I had been on JSA until about 3 weeks ago, when I went to Spain for a couple of weeks to stay with my gf and her family. As I wasn't here I had to sign off from JSA. Not a problem for me as I'd had enough of dealing with those muppets in the jobcentre. I told them that I wouldn't be signing back on as I had a job to go to when I came back, not strictly true though.

What I really want to do is to become a self-employed handyman. I have the skills and tools and am happy to do odd jobs for people. Money isn't a major issue, I can get by on a days work a week if things get tight.

The trouble is, I don't know where to start. Can anyone break it down for me what I have to do. I've looked into info for becoming SE and all I seem to come across is stuff about registering for VAT and taking on new employees, none of which applies to me. I'll be working alone and only on a basic wage.

Someone told me that self employed people pay a basic £3-4 a week for their national insurance contributions. how do I sort that out?

Also, how do I deal with the taxman? Last time I was out of work and not signing on they kept sending me letters asking how I'd been supporting myself.

Also will I need an accountant for such a basic business or can I do my own accounts?

I wanna get this sorted out soon, I have my first real customer next week putting up some woman's fence. :j

bluu2k

Hi Deluks,

It's quite simple. You should start with a phone call to Inland Revenue Helpline For Newly Self-employed, which I think is 084591 54515. They will ask you a number of questions, including your NI number and your address, and give you with more detailed advice.

You may discuss with them to clarify anything you want to know more, and it's better to explain your full circumstance, including your expected revenue for the first year (few grands would be fair, I think).

Then, they will send you an appropriate leaflet and form to fill in. Return the completed form, and they will finish the job for you, and you will be assigned a tax reference.

Concerning NI contribution, if your NET earnings fom your own business is less than certain amount (below 4465 pounds for this fiscal year I think), you are excempt from paying class 2 NI contribution. But you can volunterily to pay this if you want, and it will be flat rate of few quids.

Again, they will send you another form for excemption certificate.

You can explore more from their website https://www.inlandrevenue.gov.uk

Good luck with your new start

ocset

Thanks bluu2k, very helpfull
i have recently been made redundant and have been considering the self employed route myself, so thanks again.

suffolkb

Thanks for the helpful reply.A few people on this site have mentioned dog-walking and I am considering this.I will ask the people I see when I go for a run if they think it could work out here.Money is not important.If I managed the min wage I would be happy - just so bored being out of work.
But,I`ve no idea how to start.To begin with,I would be spending most of my time trying to find customers and not earning.Do the DWP regard this as working?
I tried Google and found a franchaise.They wanted over £11000 for a 3-day course.I don`t think so.

Becles

Ask in the Job Centre for details or your local Business Link or other governement run business support service. You should be able to go on free courses that help you learn how to do your accounts, tax returns, marketing etc. They will also help you claim any grants that you are entitled to.

lil'H

Just to add when you ring the inland revenue registration line, they will also probably send you details on local workshops you can go to free of charge, which will teach you all about how to do your accounts, tax returns etc. Currently you'd be asked to pay £2.10 a week NI, which would be taken out monthly.

Couple of basic tips form a new SE person,
1. Set up a business account, I'm with Abbey as there's is completely free privided you use the machines not the tills. This allows you to use a trading name to eg Bob's Handy Man Services. Also having one account for all business stuff makes it easier when you come to do finances.
2. Become ridiculously organised with regards to keeping records, if you keep your accounts book up to date, it'll be much easier when it comes to tax returns. Write down everything you spend (I give each thing a ref number too) keep all the reciepts in a box (I then write the reference number on the reciept, paperclip them in order by number into weekly/monthly sections.
3. Always print out an invoice for your customer and your records, even if someone pays you cash there and then, send them an invoice, and ensure you can always keep a papertrail of everything you do.

I promise it isn't hard, if you have the ability to get the work in the paper work side is quite easy PROVIDED you get yourself some kind of system in place, an accounts book and keep up to date.

Hope this helps,
Lil'H


PS Just remembered the other thing I doto be extra safe! I brought a scanner for £30 and scan all my receipts and paperwork, keep a file on pc, just in case I can't find original copy ever.

silaslang

My partner was thinking of self employment doing mobile hairdressing as I am a full time student and we have been told that I must support my partner and our daughter using my student grants & loans and that she is not entitled to income support. She left work last week and is doing voluntary work as a teaching assistant at the moment so she can attend college in 3 months time (The course stipulated 3 months voluntary prior to enrolling).

Can anyone tell me if we would be entitled to working tax credits if she is self employed and is working 16 hours a week?

A-Wing

silaslang wrote:

My partner was thinking of self employment doing mobile hairdressing as I am a full time student and we have been told that I must support my partner and our daughter using my student grants & loans and that she is not entitled to income support. She left work last week and is doing voluntary work as a teaching assistant at the moment so she can attend college in 3 months time (The course stipulated 3 months voluntary prior to enrolling).

Can anyone tell me if we would be entitled to working tax credits if she is self employed and is working 16 hours a week?

There is no harm in applying for it, I think in theory you could get it. Also look at housing benefits and a possible council tax relief (as you are a student).

Supporting a partner and kid on student grants / loans will be very difficult (I could barely support myself on them 6 years ago).

I generally say only go self employed if you can go without wages for 1 year. I have been self employed for a second time since January and only started to make a profit this month.

bluu2k

Deluks wrote:

Also will I need an accountant for such a basic business or can I do my own accounts?

lil'H's tips are very helpful, indeed. Just add some more:

1. I'm pretty sure that for small earning self-employed businesses, IL doesn't require you to have professional accountant's support. You can do it by yourself thus save you some money, and entertain you for a while as well.

2. Keeping all invoices, receipts, and alikes is a must for you. IL normally does not ask you to provide those, but they might want to see some of them in certain case.

3. However, putting things on your PC would release you lots of energy and frustration, especially when tax return time comes.

For easy and free software, just use Excel (availalble on your PC I would say) to record all and any expenditures, spending, receivables...

Not very easy but also free and more professional look/managing, you may want to try Microsoft Access (also ready on your PC).

And most convenient, well organised, fast track and absolutely professional look for small business is Microsoft Money ver. from 2004 upward (could buy from EBay with just small amount of money). You can even quickly design and print your own Invoice with this. With this tool, you never have to worry about your accountancy again.

Cheers,