Startup Business VAT Questions

malware_2

Hi,

I'm a student who wants to start a business whilst studying. This is because I've done some tech work for friends, they're friends have liked it and paid me to do the same, and basically, unintentionally I have built a small client list. I figure, might as well do it properly, stick it on my CV and have a solid experience while I'm at it too.

I want to know a few things:

1) Am I exempt from paying tax if I stay under £10.6k?
2) What is a good, cheap business bank account for me (I just want to be able to separate personal and business, and accept payments from customers into this account) - do I need a business bank account, or can I just open a new personal account, also are there any advantages to using a business bank act?
3) Do I need business insurance if I am digital only?
4) Can I do my own accounting if I learn to use the required software or do you need a license or something to be a qualified accountant (I would probably only have like 10-200 clients)?
5) Should I register as an LLC, or a Sole-Proprietor (I will be only person in business, I might contract work but will never have employees)
6) What is the best card-processor to charge customers with? I am thinking of Stripe + PayPal

Expenses:
a) Can I claim educational books directly related to my business (e.g. programming books for a programmer) as expenses?
b) How do I know what I can claim as an expense, and does it give me any other benefit, aside from being able to virtually raise how much I make by keeping it under tax-threshold
c) Can I claim things like my mobile phone contract (prepaid x amount of minutes/texts) as a business expense because I communicate with clients using it, or is it only things I SOLELY use for business?

paddyrg

First, get an accountant - all of these questions are their bread and butter work. The question 'so I don't have to charge tax on my services' shows you need clear professional guidance.

You'll probably suit being a sole trader, BTW, if you're at the 10 clients end, Ltd co if at the 200, but talk to your accountant

malware_2

Thanks. Any rough idea how much I would have to pay an accountant for things like this?

McKneff

Why have you mentioned VAT in your heading.


You have to be turning over (around, notsure of the correct figure ) £75,000 before you need to register for VAT.


Or are you just getting income tax and VAT confused.

antrobus

malware wrote: »

Hi,...

As far as VAT is concerned, you don't have to worry about that until your sales start nearing £82,000 a year.

malware wrote: »

...I'm a student who wants to start a business whilst studying. This is because I've done some tech work for friends, they're friends have liked it and paid me to do the same, and basically, unintentionally I have built a small client list. I figure, might as well do it properly, stick it on my CV and have a solid experience while I'm at it too.....

If some friends have already paid you for work carried out, then you have already started a business.

malware wrote: »

...

I want to know a few things:

1) Am I exempt from paying tax if I stay under £10.6k?......

No income tax will be due unless your total taxable income exceeds the personal allowance. National insurance kicks in at lower amounts.

malware wrote: »

...2) What is a good, cheap business bank account for me (I just want to be able to separate personal and business, and accept payments from customers into this account) - do I need a business bank account, or can I just open a new personal account, also are there any advantages to using a business bank act?..

You don't need a business account, as such. The main advantage of one is that it makes it easier to separate business from private. The mian disadvantage is that you normally have to pay for it.

malware wrote: »

...3) Do I need business insurance if I am digital only?.....

Don't know. It depends on whether anyone is likely to sue you for something or other.

malware wrote: »

...4) Can I do my own accounting if I learn to use the required software or do you need a license or something to be a qualified accountant (I would probably only have like 10-200 clients)?.....

You can do your own accounting. And you don't need any specific software. You can write all the numbers down in a book and add them up with a calculator if you like.

malware wrote: »

..5) Should I register as an LLC, or a Sole-Proprietor (I will be only person in business, I might contract work but will never have employees).......

It's probably easier to start off as a sole trader, and then think about a ltd co at a later date, if things take off.

malware wrote: »

..6) What is the best card-processor to charge customers with? I am thinking of Stripe + PayPal......

No idea. But are you sure your customers, potential or otherwise, will want to pay by card?

malware wrote: »

.
Expenses: a) Can I claim educational books directly related to my business (e.g. programming books for a programmer) as expenses?...

Probably.

malware wrote: »

...b) How do I know what I can claim as an expense, and does it give me any other benefit, aside from being able to virtually raise how much I make by keeping it under tax-threshold...

https://www.gov.uk/expenses-if-youre-self-employed/overview

malware wrote: »

...c) Can I claim things like my mobile phone contract (prepaid x amount of minutes/texts) as a business expense because I communicate with clients using it, or is it only things I SOLELY use for business?

Yes. You can claim a proportion of your mobile phone bill, if it has shared business/private use.