Setting up as a business a few questions....

dawn_rose

Hiya im wanting to set up a business i can run from home selling online and craft fairs. Im a stay at home mum currently. Firstly how do i go about registering for tax coz dont want get in mess with tax man ect and secondly i currently recieve child benefit and child tax credit will these be affected before i make a profit? many thnks.

theesel1994

Don't know about the second part - but for the first part you could start by reading here :
http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm

Horace

You would need to speak to the HMRC about your tax credits - I do know that you can get working tax credits (you get more if you have kids) but to get that you need to be working 30+hrs a week. I know this because I have recently been forced to stop claiming and claim dole money instead because I have stopped working due to the economic climate (no one wants to pay someone to organise events), mind you I do not have childen either.

dawn_rose

Thanks for link i got some books from library on it all as well today so been having a read up. I have three children but not entitled to working tax credit as my husband works full time. I get child tax credit but still need this for first year or so of me setting up my business until i csn draw a wage from it????

Mistral001

Jackofalltradez wrote: »

Sod the tax man anyway, work out if what you are doing is viable firstly, then think of the tax man. The less you tell them the better.

I do not agree with the first sentence here, but definitely agree with the second. Seems everybody is wanting to set up a home craft business. Give it a few months before before thinking that you have a viable business. Look to be earning at least £500 profit (not turnover) a months before getting too much hope that it will work. Afterall £500 a month is £6000 a year which you will unlikely be able to have to pay any tax on.

dawn_rose

Many thanks for your replies x

steve1980

If you start a business you need to imform HMRC that you are doing so.

By witholding, you face a fine for registering late.

Please ignore all the advice given to you by Jackofalltradez. He is nothing but a troll and any advice you take from him is likely to land you in hot water.

Joannag_2

Just to add, the 'fairs' seem saturated this year. I have 2 or 3 a week and only by being asked as I am a bit different with bear building kits - most say - no more jewellery, cupcakes, nappy cakes etc. I am also finding 2 or 3 fairs on at the same time in the same area so footfall is down. What are you planning to do?

As to your original question, I had a brilliant free business one to one when setting up, local to me (not business link) who covered everything from insurance, tax, to letting the council know you are trading. Might be worth joining a local networking group like 'Wire' as other people in the same boat will have lots of advice. Above all good luck!

Savvy_Sue

Jackofalltradez wrote: »

The op would have 3 months to let the tax man know from the start of trading.

The 3 month rule is no longer in effect: you're supposed to tell HMRC as soon as ... the complication lies in working out when that is!

Mistral001

Jackofalltradez wrote: »

The op would have 3 months to let the tax man know from the start of trading.

What i am suggsting is firstly work out if she has a business that will make profit. You will fail in business if the first things you are considering are the bloody tax man.

She ought to work out if she can earn her tax code without it affecting her benefits firstly really.

There has always been a bit of a debate here on this forum about when you should tell HMRC about trading. There are the ones who say that you must tell them immediately unless you will go to prison! Others say one month three months whatever.

I am in the camp of "it all depends". Looking at HMRC literature, as far as I can see it is fairly vague as they use terms like "it is best to" etc. Some could argue that 15 months would be time enough if you started trading on 6th April 2011 and set in your tax form in 5th Oct 2012.

Best to seek financial advice from an accountant if unsure. Could save you a lot of time filling out forms that you do not have to.

patman99

The good thing is that you only have to tell HMRC once. They will then send you a Tax reminder every year until you finally die. Why?, because they can.
Seriously though, this does mean that if your business does not take-off and you go and work PAYE for someone else, then decide a few years later on to have another go, you don't have to tell them again.

One piece of advice given to me when I was comtemplating returning to s/e was to pay the same NI class as PAYE people, that way, if things don't work-out, you are entitled to full benefits.