Small Small Business .. Tax Question

petchy

Hi,

Just a quick question, hope some one can answer or help!

I've got a job at the mo, paying around 18k a year, but was looking to earn a bit of money from helping people with there PCs. I've got a degree so fully qualified and was thinking of just starting in a small location near my home offering services such as breakdown repairs, services, setting up networks, building PCs etc....

Not anything major, just a few bits and bobs to earn a few extra quid?

My question is where do i stand in terms of tax etc, and how can i move forward with my idea... obviously i can build a website and hand out a few leaflets, if i begin to get a few jobs etc do i need to do anything tax wise etc?

Please help!

Thanks

JP

Elaine_Wilson

As you describe it this is obviously more than just a hobby. You would be setting out with the intention of making a profit and this will make you self-employed.

If you go ahead you will need to register as self-employed for tax purposes and also regarding national insurance. If you expect your earnings to remain small you can apply for exemption from the class 2 national insurance contributions.

Registration is by completing a form CWF1 which is downloadable from the HMRC website.

I can't really help with how to promote your business. No doubt someone else can contribute here.

I would just ask if you have considered the insurance aspect. You may need to extend your household cover to include equipment owned by your customers. And don't forget to make sure your car insurance will allow you to transport customers' computers if you intend to do this.

Murdina

you still need to register as self employed 3 months from starting and you will need to complete SA returns. Keep proper books and records. Have a read through any posts on this forum about starting in business generally.
If the income turns out to be negligible then you can get an exemption from paying class 2 NIC but still need to register first. You will always need to pay income tax and class 4 NIC (if your self employed earnings are high enough).
You can also look at http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.shtml
Hope the business goes well - I'm sure there is a lot of demand out there.

petchy

Thanks for your help!

I must admit i'd only be looking at making £1k a year at the most to be honest! Just some extra pocket money!

Would i not get hammered for tax if i already have a job paying 18k p/a?

So it seems all i'd have to pay for is my National Insurance??? and even that i might not have to pay?

Just debating whether to go for this or not!!!

Murdina

whatever you earn in terms of profits is liable to income tax at rates which take into account your earnings ie 22% from what you say above.
NI is more complicated because it does distinguish employed and self employed earnings.
Either way you have to go through the compliance formalities, even if the amount seems modest to you.