Self employment

Maybeanotherday

Hubby wants to become self employed, he is looking at setting up an off shoot of his dads buisness, his dad will guarentee him £1k a month the rest of the work he has to find for himself....please can anyone give me an idea of what he needs to consider about self employment before he accepts? Thankyou

Darksparkle

Wouldn't he be his dad's employee for the work he does for him?

Mersey_2

He can register as self-employed online with HMRC. They'll send him a Unique Tax Reference (to complete his Tax Return the following year).


He may need insurance depending upon the type of work.


HMRC have helpful webinars re tax returns and allowances etc, but that's a long way off (they don't have to e completed until the Jan after the tax year, ie 9 months later).


Good Luck to him.


Earnings are almost always lower in self-employment; but, job satisfaction is almost always higher.

Mattygroves2

Mersey wrote: »

Earnings are almost always lower in self-employment; but, job satisfaction is almost always higher.

Tell that to the partners of professional firms - lawyers, accountants, GPs, architects etc !

Self employment is riskier than PAYE employment but you do get the satisfaction that what you make is yours rather than lining the pockets of whoever owns the business you work for.

DKLS

Maybeanotherday wrote: »

Hubby wants to become self employed, he is looking at setting up an off shoot of his dads buisness, his dad will guarentee him £1k a month the rest of the work he has to find for himself....please can anyone give me an idea of what he needs to consider about self employment before he accepts? Thankyou

Excluding setting up companies, registering with HRMC etc, my main questions would be around the actual business and its model.
Does the business model and more importantly do the numbers stack up ?, its a great start having a guaranteed income of 12k, assuming he has costs out of that, is the model scaleable to provide a higher income?


Can he turn that into 24k, 36k, 50k, 100k?

Carl31

What do you mean by 'guarantee £1k a month' will this be chargable services provided, or just given to ensure he has an income?

Depending on whether its a gift, or for services, it will be taxed differently

Other things - self employed pay tax differently, they are required to pay part of their national insurance weekly, as well as file tax returns, which can be done by themselves, or an accountant, so need to ensure he retains the required documentation (invoices to customers, receipts for purchases etc..)

Depending on his trade, he will probably need liability insurances. He should also consider how he intends to set up his business, ie sole trader or registered company, probably the former initially, plus the possibility of registering for VAT, although thats probably more likely once hes established, but also could depend on his trade, some customers may choose VAT registered suppliers as they 'cost' less