Going Self Employed

StuWW

I have been travelling for the last 9 months and before that had a 9-5 on the PAYE system.

Since coming home I've been offered work that requires me to invoice the customer, so I assume I will have to go self employed.

Most of my work will be IT related but I'd quite like to take on any work that comes my way, from farming to gardening, training etc. Variety is the spice of life!

My question is how do I name my business to avoid pigeon holing myself into one area of work?

Would I use "Bob Smith Associates", Bob Smith trading as Web Designer and Bob Smith Trading as Hedge Pruner!!

Hope that makes some sense and isn't to daft a question!

Many thanks

Stu

KiKi

Hi Stu

I wouldn't advise calling your business 'Bob Smith' anything if your name is Stuart. But hey - to each their own.

Whether or not you have a business name depends on the legal structure of your business. If you create a limited company then you have to have a business name - you must register with Companies House, have an accountant, and formally pay yourself and anyone else through PAYE. You have to pay corporation tax as well as income tax (unless you only pay yourself dividends). If you do, I would personally choose a vague name like 'Stuart Associates" or "Stuart Services". This gives you flexibility and doesn't tie you down. I personally don't like 'trading as' because it means very little to the customer and, if anything, is confusing.

However, if you work as a sole trader (as I do) then you don't need an actual business name, you can just operate as 'Bob Smith'. Or preferably 'Stuart'. This might work better for you because a) you are starting out, and so tax-wise you are likely to be financially better off as a sole trader unless you are earning over £60K-ish and b) you don't need to worry about a business name. However, if you do work as a sole trader then you need to be careful that you don't imply you have an actual company by using a company name.

Most SE people start off as sole traders. It's easy, whatever you earn is yours, and you don't need to worry about formal accounting - although you have to report earnings and costs for tax, obviously. Many start this way, then create limited companies if either the need arises, or if it becomes financially better to do so. For the first year most one-person businesses (which you propose to be) are much, much better off as sole traders.

Take a look at 'Legal Structures' on this fantastic website. This tells you everything you need to know. http://www.businesslink.gov.uk/bdotg/action/layer?lang=en&r.l1=1073858805&r.l2=1073859137&r.s=m&topicId=1085161962

HTH
KiKi

StuWW

Thanks for the quick reply...

I'll be earning if I'm lucky £20000 max and working on my own, so definitely a Sole Trader.

I was just about to fill in the "Becoming self-employed and registering for National Insurance contributions and/or tax" form online and it asked for a business name!

Thanks again.

Stuart AKA Bob Smith

PlutoinCapricorn

There used to be someone called an "odd job man", which is self-explanatory.

The modern equivalent is "freelance portfolio worker", which means a multi-skilled person and which is ideal for someone who does a bit of this and a bit of that.

I agree that is is best to start small and 'trade' as a Sole Trader under your own name, and see how it goes. The business name in this case is your own name.

StuWW

"freelance portfolio worker"... sounds a bit more upmarket than Odd Job Man!!!

Thanks for the input very useful!

Just a final thought that springs to mind.

Do I have to have a business bank account? Can I just open another bank account with any bank using my name, which will be my business name anyway.

Don't see why I should pay for a business account when all I want to do is pay cheques \ transfer money into it!!

Many thanks

Stu

KiKi

No, you don't have to have a business account. As a sole trader you don't even have to have a separate account. Everything you earn is yours, and as long as you have copies of all receipts for expenses, and all invoices for money coming in, you don't need to keep your business and personal accounts separate. (Although I personally do as I find it easier to work out where my money's gone!)

Make sure you keep back 28% of what you earn to pay your tax bill at the end of the year! I keep a separate savings account for this again, so I can earn good interest on it, and I'm not tempted to touch it.

(FYI, limited companies DO have to have separate accounts, but even then they don't have to be business accounts.)

KiKi

StuWW

Thanks KiKi fantastic info, just what I needed to know...

I'm guessing that because this financial year I'll have probably only earned £3000 I won't even have to pay NI...

Thanks again

Stuart

KiKi

StuWW wrote: »

Thanks KiKi fantastic info, just what I needed to know...

I'm guessing that because this financial year I'll have probably only earned £3000 I won't even have to pay NI...

Thanks again

Stuart

You will have to pay £2.40 per week for NI Class 2, but you probably won't be liable for NI Class 4 (which is paid at rate of 8% along with tax when you do your tax return).

You probably won't be liable for income tax, either. But keep an eye on it.

The limits for the 20, 40 and 50% tax rates, and the limits for the Class 4 NICs are on the Business Link website.

KiKi

heretolearn_2

It's highly advisable to have a separate account. It doesn't have to be a business account, another personal one will do. But there are several free business accounts available.

There are some tax advantages of being a Limited company (and I'd say these can kick in before a £60k income level, depending on circumstances, and Ltd companies don't have to use an accountant, it's just advisable) but it sounds like sole trader is going to be best for you.

If you really want you can just trade under your own name - put that as the business name. If you want a business name then as a sole trader it will be Stu Whatever trading as 'SB Associates' for example. Then you only need use the SB Associates part as far as your clients are concerned. Whether it's worth doing this or not depends on your type of work and clients. Some companies would rather work with an 'SB Associates' than a 'Stu Whatever'.

StuWW

Thanks Heretolearn, really useful info and the Businesslink site has been great to.

Hopefully fill in the online form later and get my self employed life rolling!

Just finished my first piece of work " http://www.otterfarmshop.co.uk/ "

Oh one more question, any recommendations for invoicing \ quoting software, I see there are some good online services now!

Thanks to everyone once again.

Stuart