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HELP! Already employed full time & want to start own business too

mentalistically
Posts: 3 Newbie
Hello everyone,
So im trying to get as much info as possible before I register with HMRC as a sole trader. Basically im employed full time and paid enough to just keep me out of higher tax.
Im also a trained holistic therapist and want to offer this as my own business. Obviously hours will be as and when, maybe an evening or weekend. Im not anticipating being booked up all night and all weekend, just a couple of sessions here and there, maybe a workshop etc. Its more of a hobby atm but eventually would become a prime means of income. (I hope!)
What happens with tax etc? I know I register all details to hmrc and they deal with it but ive read about paying set NI contributions monthly. Is there an earnings threshold before you need to pay this? Im literally going to be earning a pitance for a while and already pay loads of NI with my 'proper' job.
I would be mobile, so no need for a premises, other than for correspondence. Whats the deal when I dont own the mortgage? I live with the other half who does own the mortgage. Would there be issues with having a business registered at this address? No actual trading would take place from there but obviously id be using my laptop or phone there, and wherever I pick up calls and emails.
I have insurance and know I need to include my couch etc on car Insurance.
Is there anything else I should be sure of before registering? As you can probably tell ive been employed all my working life and have never been self employed. I want to do everything legally and be aware of how I should run this venture without getting into trouble!
Thanks
Mel
So im trying to get as much info as possible before I register with HMRC as a sole trader. Basically im employed full time and paid enough to just keep me out of higher tax.
Im also a trained holistic therapist and want to offer this as my own business. Obviously hours will be as and when, maybe an evening or weekend. Im not anticipating being booked up all night and all weekend, just a couple of sessions here and there, maybe a workshop etc. Its more of a hobby atm but eventually would become a prime means of income. (I hope!)
What happens with tax etc? I know I register all details to hmrc and they deal with it but ive read about paying set NI contributions monthly. Is there an earnings threshold before you need to pay this? Im literally going to be earning a pitance for a while and already pay loads of NI with my 'proper' job.
I would be mobile, so no need for a premises, other than for correspondence. Whats the deal when I dont own the mortgage? I live with the other half who does own the mortgage. Would there be issues with having a business registered at this address? No actual trading would take place from there but obviously id be using my laptop or phone there, and wherever I pick up calls and emails.
I have insurance and know I need to include my couch etc on car Insurance.
Is there anything else I should be sure of before registering? As you can probably tell ive been employed all my working life and have never been self employed. I want to do everything legally and be aware of how I should run this venture without getting into trouble!
Thanks
Mel
0
Comments
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You would need to register with HMRC.
You would also need to make sure your car insurance covers you for commercial use (your normal insurance will only cover you to commute to ONE job, so even people who have more than one job need commercial cover).
If you decide to go as a sole trader, then I would suggest having a separate bank account & only pay yourself 60% of the income as earnings. You would have to pay 20% of everything you earn as Tax & another 9% as NI.
If you decide to register as a limited company, then you would only pay Tax/NI on what you decide to pay yourself as a wage. You can also set against Tax all your business outgoings such as insurance, car running costs & phone. Whatever is made as profit is taxed at 20%.Never Knowingly Understood.
Member #1 of £1,000 challenge - £13.74/ £1000 (that's 1.374%)
3-6 month EF £0/£3600 (that's 0 days worth)0 -
Something I only learned about very recently is that if although we all register for Tax and NI when becoming self employed, if your earnings are very low you can apply for a refund - however you can only get a refund for the previous financial year which is a bit cheeky! There;s a link here:
http://www.hmrc.gov.uk/forms/cf10.pdf
or google certificate of small earnings exception to find out more.0 -
You would need to register with HMRC.
You would also need to make sure your car insurance covers you for commercial use (your normal insurance will only cover you to commute to ONE job, so even people who have more than one job need commercial cover).
If you decide to go as a sole trader, then I would suggest having a separate bank account & only pay yourself 60% of the income as earnings. You would have to pay 20% of everything you earn as Tax & another 9% as NI.
If you decide to register as a limited company, then you would only pay Tax/NI on what you decide to pay yourself as a wage. You can also set against Tax all your business outgoings such as insurance, car running costs & phone. Whatever is made as profit is taxed at 20%.
If your additional earnings take you into higher rate tax, please keep 50% back rather than 60% as you will be liable at 40% income tax & NI to pay. Consider liability insurances also.0 -
Yes, you need to consider your main earnings from your day job.
There is nothing illegal in registering as a Limited Company, paying yourself NMW and then using company funds to fill up your car or pay for the car insurance (or the extra fee for business use) and part/all of your mobile phone costs. Thus, reducing your Tax liability.Never Knowingly Understood.
Member #1 of £1,000 challenge - £13.74/ £1000 (that's 1.374%)
3-6 month EF £0/£3600 (that's 0 days worth)0 -
Yes, you need to consider your main earnings from your day job.
There is nothing illegal in registering as a Limited Company, paying yourself NMW and then using company funds to fill up your car or pay for the car insurance (or the extra fee for business use) and part/all of your mobile phone costs. Thus, reducing your Tax liability.
Assuming 100% of the fuel + phone costs are purely for the business...0 -
If your self-employment earnings are low, you should be able to apply for exemption from NI for your self-employment
http://www.hmrc.gov.uk/forms/cf10.pdf
I run my (desk-based) business from home - some houses have covenants in the deeds saying that you are not allowed to run a business from the property, so you should have a look to see if that's the case, and if so whether you think that in reality it will be any kind of an issue.
You should check with your house insurance - I rang my insurers up and they were happy that my business was OK to be covered under the normal house insurance - as long as you don't have clients visiting your house and you are just doing the admin from home, it should be OK but do check.
You should have a think about whether you need a separate business bank account. It would certainly be good practice to set one up (I think NatWest do a pay-as-you-go online option which would be cheaper for a low level of transactions - shop around).0
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