Becoming self employed

WSforever

Looking for advice on becoming self employed.

I've only ever been employed by large organisations so I'm quite unaware of the process of what I will need.
I will be a self-employed, sole trader.

Who will I need to inform that I'm self employed?
Will I need a specific business name?
Will I be able to put business assets such as a vehicle & IT equipment against the business for tax savings?

any advice greatly appreciated.

Undervalued

WSforever wrote: »

Looking for advice on becoming self employed.

I've only ever been employed by large organisations so I'm quite unaware of the process of what I will need.
I will be a self-employed, sole trader.

Who will I need to inform that I'm self employed? HMRC

Will I need a specific business name? Not if you trade under your own name.


Will I be able to put business assets such as a vehicle & IT equipment against the business for tax savings? Yes, subject to HMRC rules.

any advice greatly appreciated.

Answers above plus I would strongly suggest you get an accountant.

WSforever

Thanks.
Will I pay income tax and business tax?
How do I put things against a business, e.g. I'm about to buy a van for my business?

Undervalued

WSforever wrote: »

Thanks.
Will I pay income tax and business tax?
How do I put things against a business, e.g. I'm about to buy a van for my business?

No as a sole trader (i.e not a limited company) you do not pay "business" (i.e corporation) tax. So, only income tax and national insurance based on your net profit.

If your turnover is above the VAT threshold (currently £83K) you will need to register for VAT and charge it to your clients.

As I say, get an accountant. It will save you money. Yes you can claim for your van but there are certain rules if it is your only vehicle and you also use it privately - again an accountant will advise what you can easily claim and what is likely to be questioned.

andygb

I would advise that the OP does NOT immediately go to see an accountant, because all of that information will be available at a local Chamber of Commerce free of charge.
There are generally courses which cover all aspects of starting up a business/going self employed, from business plans, advice on sole trader/limited company.
If the OP buys a van for the business (which may not be the best idea - look at leasing depending on the business type), then they will be able to offset this cost against any profit in the first year, and then depreciate it over a number of years, which again will be offset against profit in each of the years it applies.

Pennywise

andygb wrote: »

then they will be able to offset this cost against any profit in the first year, and then depreciate it over a number of years, which again will be offset against profit in each of the years it applies.

You can't get the tax relief twice. You EITHER offset it in year of purchase, or you claim it over several years via capital allowances writing down allowance.

BUT, even that's not so simple. If you're on the cash basis, you don't have the option of write off over several years, it's a deduction in the year of purchase only.

And there's more. A large purchase like that could trigger a loss in the first year (subject to your choice of year end!), which you could opt to set against tax already paid in employment in current of previous year - you'd have to work out what would be the best use of the "loss". But again, if on the cash basis, you can only set losses against future trading profits, not against current or past tax.

So, it is quite a minefield, and you've a lot of reading/research to do to get the best outcome if you decide not to use an accountant.

aife

I'm about to do the same myself
I suggest you go along to a few workshops/advice sessions. Unless you're in a very rural area there should be various groups/associations you can go to.
Try your local library and check Eventbrite and Meetup.
I'd also recommend Enterprise Nation

andygb

This may be of some use to the OP.
These courses are free.

http://www.open.edu/openlearn/money-management/starting-your-small-business