Advice self employed query

Tasch86

Hi. I am looking at starting a little business. I am currently a a stay at home mum. I have a chance to provide a service using something i have built to some companies. Does anyone know if it would be just a straight forward registering as self employed & doing the sa return every year or would i have to register for money laundering regulations as well due to the fact that it is a service i am providing and not goods? TIA x

HappyMJ

Tasch86 wrote: »

Hi. I am looking at starting a little business. I am currently a a stay at home mum. I have a chance to provide a service using something i have built to some companies. Does anyone know if it would be just a straight forward registering as self employed & doing the sa return every year or would i have to register for money laundering regulations as well due to the fact that it is a service i am providing and not goods? TIA x

Just register as self employed. If you're claiming child benefit you're getting credit for national insurance contributions so can opt out of paying Class 2 self employed contributions (if your profit is under £5,965). Otherwise they're only £2.80 per week.

The SA form is really easy to fill in. You enter your profit and send it off. There's no tax to pay if your profits are low and only 20% above that. But make sure you send it in each year even if you stop working. There's a £100 penalty for not sending it in on time as seeing it's so easy there's no excuse.

Tasch86

Thank you. I assume the tax free allowance is the same as that of an employed person. Is that right? Or is it basically income vs expenses - no tax free allowance? Sorry. New to this.

HappyMJ

Tasch86 wrote: »

Thank you. I assume the tax free allowance is the same as that of an employed person. Is that right? Or is it basically income vs expenses - no tax free allowance? Sorry. New to this.

Income minus expenses equals profit. You pay tax just on the profit and the personal allowance is the same.

There's no need to prove anything at the time you fill out a self assessment but you need to be able to if ever asked so keep a copy of every receipt for the expenses and a copy of every invoice you've issued for the income. If you trade in cash you need to keep a record of how much you've taken usually on a daily basis but can be any period. Keep a diary in the car to prove what mileage was private and what mileage was business and take a copy every so often.

If you're not making much then your records don't need to be presented too professionally. Just keep it all in a format which is easy to understand what is expenses and what is income.

You need to keep your records for at least 6 years from the end of the tax year in question.

Tasch86

Thank you very much. That has helped loads

culpepper

You need to keep a record of the start date of your self employment (the date of your first invoice)..If you do stop working for yourself after a while, you can ring them up and tell them the exact date on which you stop, to avoid getting tax return requests ad infinitum.