Help with starting a business

Black_Dynamite

Hi guys,

After months of thinking I have finally come up with a business idea that both me and my partner like the sound of. I've got all the planning in place and now I am stuck and could do with some advice.

I have a supplier, website on the way but it is the financial / tax side of things I am struggling with.

I have been reading this forum for a few years now and have learned a huge deal. If anybody could help me, I would be grateful!!

To begin with I am going to be buying in bulk, selling at car boots, ebay, amazon and on my own website that I will be developing. I'm keeping my overheads really low, spending only where necessary.

These are the things I am struggling with ...

- Do I need a business bank account or can I use an existing current account?

- When and who do I need to inform about my business?

- What do I do in regards to tax? I will still be working full time alongside this until a time it can support me and my family.

- Should I register for as a VAT company? Am I even able to?

- Do I need an accountant? If so how much is it likely to cost me?

Sorry for the huge list I just don't really know where else to ask the questions, and the community here always seems to help other members

Thanks for your help guys!

Kayalana99

Black_Dynamite wrote: »

- Do I need a business bank account or can I use an existing current account?

As a small ebayer I tried to get one and got declined! Personally I just use a seperate current account but others would probally say you need a business one. You can always upgrade it later though.

For the rest of the questions, I think it highly depends on how much income your getting in...

If its an extra £300/monthly or so I doubt you'd need an accountant/ but if your thinking this might be in the thousands it might be worth considering it.

Again, VAT is something only to be considered when your earnings reach a certain point.

Personally I registered with HMRC self assesment for tax and thats all I need.

I just keep a record of ingoings and outgoings and then you log in and update it once a year and pay my tax that way.

Black_Dynamite

Kayalana99 wrote: »

As a small ebayer I tried to get one and got declined! Personally I just use a seperate current account but others would probally say you need a business one. You can always upgrade it later though.

For the rest of the questions, I think it highly depends on how much income your getting in...

If its an extra £300/monthly or so I doubt you'd need an accountant but if your thinking this might be in the thousands it might be worth considering it.

Personally I registered with HMRC self assesment for tax and thats all I need.

I just keep a record of ingoings and outgoings and then you log in and update it once a year and pay my tax that way.

Thanks for your reply, that is just what I was hoping to hear

To begin with it will be in the hundreds rather than thousands but I am hoping to see a steady increase each month. Start out slow and build gradually is much more my style than something high risk!

Thanks again Kayalana99, any advice from when you started out?

Kayalana99

Not alot really just make sure you keep on top of your books, keep receipts etc..know how much your profit is as silly as it sounds.

Their is some Ebay guides to keeping books you can google as well, good luck :-)

shmeeko69

Hi Black Dynamite,

Glad too hear you're taking the self employment route and asking about what to do next.

1. With regards to opening an business bank account, it's entirely up to you although if you expect a lot of transactions then, it would be better organising a separate account from your normal run of the mill bank account.

2. Make a call to your local tax office (HMRC) about being self employed at the earliest opportunity and get the ball rolling with logging all of your incomings and outgoings and remember first £9440 is now tax free.

3. If you're using Paypal as a payment processor then, go for the premier account which is free. All you need to do is verify your bank account, email address and home address. This usually takes 3 to 4 working days, but well worth it, as it means you won't have any withdrawal limits and you can transfer and get access to your funds with ease.

4. You only need to concern yourself with VAT once you're more established and/or you can see your turnover getting close to the £79,000pa threshold.

All the best with your business endeavours in 2013 and beyond.

Black_Dynamite

shmeeko69, thanks for the detailed reply. Exactly the kind of information I was hoping for!

Hoping that by 2015 / 2016 I am working on this project full time.

Thankyou for your advice!

Lovelyjoolz

shmeeko69 wrote: »

... and remember first £9440 is now tax free.

OP, don't be mislead by this. Bear in mind that as you are working full time your tax free allowance will be swallowed up by your salary so all your earnings with the new business will be taxed at 20% (until you hit the 40% bracket of course).

I definitely recommend you use a separate bank account for your business dealings. It makes it much easier to do your tax return as your bank statement acts as your cashbook.

KEEP ALL RECEIPTS!!! I cannot emphasise this enough. It's vital to working out your profits. And if the receipt doesn't clearly show what it is for, make a little note on it as soon as you can because you'll never remember what it was for 12 months later.

Get a proper filing system and keep on top of things. Once a month or so, sit down and produce a simple set of accounts then file everything away in a logical way. You'll be glad of it when it comes around to tax return time.

Self Assessment is not that hard to do. You won't need an accountant yet. But register with HMRC early. Get your Gateway login and password sorted now and familiarise yourself with the forms. That way you're all set and ready to go and you won't be panicked as deadline day draws near.

Good luck!

Black_Dynamite

Lovelyjoolz wrote: »

OP, don't be mislead by this. Bear in mind that as you are working full time your tax free allowance will be swallowed up by your salary so all your earnings with the new business will be taxed at 20% (until you hit the 40% bracket of course).

I definitely recommend you use a separate bank account for your business dealings. It makes it much easier to do your tax return as your bank statement acts as your cashbook.

KEEP ALL RECEIPTS!!! I cannot emphasise this enough. It's vital to working out your profits. And if the receipt doesn't clearly show what it is for, make a little note on it as soon as you can because you'll never remember what it was for 12 months later.

Get a proper filing system and keep on top of things. Once a month or so, sit down and produce a simple set of accounts then file everything away in a logical way. You'll be glad of it when it comes around to tax return time.

Self Assessment is not that hard to do. You won't need an accountant yet. But register with HMRC early. Get your Gateway login and password sorted now and familiarise yourself with the forms. That way you're all set and ready to go and you won't be panicked as deadline day draws near.

Good luck!

Thanks again for another useful reply.

My plan in regards to a bank account is to clear out an old current account I have so it has £0.00 sitting in it, I only use this as an emergency account but I can use my joint account for this instead. This will only be used for "business".

I am also planning to keep 30% of all income aside for the tax man, this should easily cover my tax bill and should leave me with extra after it has been paid.

Luckily, my partner is an accounts admin so i'm sure she can help me with my filing but after these replies I am so much closer than I originally thought which is great, I can't wait to get started and hopefully I can be up and going in time for Christmas.

Thanks for all the advice so far.