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How will being a sole trader effect me?

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Hi,
I've been lurking around this thread for a couple of days now but I haven't been able to find anyone in a similar situation. I'm thinking about starting up a business (mainly to do with social media management and creating content for businesses) which I've been told is a good option. However I was wondering 1) will it affect my student finance (I'm currently in my first year at uni) and 2) the earnings from the business are likely to be less than £10,000 so what type of things would I have to pay on this? e.g. tax? I'm just trying to see if I'd be better off starting this business then getting a job but my limited knowledge about the fees is putting me off. Also the business name I'd want to use is already taken by another company (but in a different country) offering the same services- am I still able to use this as there isn't a limited company in the UK with that name?

I also have some other questions but that's all I can think of for now :)

Thanks in advance,
Jade

Comments

  • paddyrg
    paddyrg Posts: 13,543 Forumite
    1) That depends on how you're financed
    2) You tell HMRC you're in business and do a tax return each year, that will tell you what you owe. Tax is based on your overall profit after a certain tax-free allowance. The online tool makes it simple but you will need to keep good records and a separate bank account is strongly advised.

    Would I want a student 'creating content' for my business? I'm not sure. Not that there's anything wrong with you, but outsourcing PR means outsourcing reputation, and in a specialist industry one simple innocent error could be very embarassing.

    Name - blurry area - you're talking sole trader so your business name is actually 'jaaadejade t/a sometradingname', not 'sometradingname ltd'. There is a risk that you could be 'passing off' if the other company think you're taking their business. For instance 'Carrefour' isn't a major shopping brand in the UK (let's pretend there are no carrefour shops or gyms or anything for this argument), yet they're huge international players. If I opened a cornershop called Carrefour, they'd be on me in a heartbeat despite not trading under that name in this territory. It will vary case by case, circumstance by circumstance.

    For easy money, get a job. You'll get paid, tax will be taken off at source (you may even get a rebate at the year end) so your money is your own, you'll likely make more than any new startup will, and you can focus on studies.
  • Mistral001
    Mistral001 Posts: 5,429 Forumite
    Part of the Furniture 1,000 Posts Name Dropper I've been Money Tipped!
    jaaadejade wrote: »
    I've been told is a good option.

    Jade


    That person who told you obviously knows a lot about your proposed type of business. Are they willing to invest in it? Or if not invest money, then invest some of their time in helping you to set this up? Would you even consider offering to go into partnership with them on this venture?
  • CKhalvashi
    CKhalvashi Posts: 12,134 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Mistral001 wrote: »
    That person who told you obviously knows a lot about your proposed type of business. Are they willing to invest in it? Or if not invest money, then invest some of their time in helping you to set this up? Would you even consider offering to go into partnership with them on this venture?

    These are important questions, and questions that need to be taken seriously.

    I've been very funny about the use of my initials by other companies, especially if they're in the same industry as I am, however the one company that caused us a few problems with work not up to scratch did change its name upon request. This business was in Canada, my business is incorporated in Georgia (the former USSR state, not USA) and UK under this name, with very few sales going to Canada.

    CK
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