Advice on starting a business

TidyGarden2020

Hello, just signed up to this site so be kind.
I have a full time job but I enjoy gardening and grass cutting. I am hoping to get a small number of grass cutting clients shortly in my village for a part time income. 
Rather than taking cash in hand, I aim to do things properly.
Is it easier to make a company and then keep a book of accounts for my clients/income. Also, I have a personal van so could I then pay for my fuel on it? Or could sell my personal vehicle and then pump the money from the sale into the business and buy a business vehicle?
Anyone got advice or any links for good documents to read etc.
It will be small time. Maybe £200 income a month at most. Just looking for the best way to utilize the tax efficiency's. 
Thanks alot. 

TidyGarden2020

Hi everyone 👋

So everything happened pretty fast. I spoke with a potential client today and he wants me to work on his estate. It's got a few houses on it and a few lodges and it will definitely keep me busy. He said I can come and go as I please and just log my hours for payment. We've agreed an initial rate of £10 per hour, however I did explain that petrol and blades for the equipment would cost alot and there is scope for movement or added expenses. 

Anyway, I've created a sole trader business and registered it with HMRC so just waiting for their reply. 

Currently looking for a sole trader account so my client can pay me and I can manage my money. Any ideas which one(s) are best to look at?

Looking at equipment, I have it all already from my own garden so I won't need to buy anything new yet in the short term. 

In terms of tax, basically say if I earn £2000 between now and April, but then I decided to spend £2000 on a trailer for my work as an expense, I'm basically ensuring I make no profit and thereafter don't have to pay any tax / NI.

Any advice on how my full time job will affect this. I earn 42k from this already.

So many questions 🤦 I am reading up on things but my basic thought it that I work for a few months to make a small lump sum of money and then I can buy new equipment? 

soolin

TidyGarden2020 said:

Hi everyone 👋

So everything happened pretty fast. I spoke with a potential client today and he wants me to work on his estate. It's got a few houses on it and a few lodges and it will definitely keep me busy. He said I can come and go as I please and just log my hours for payment. We've agreed an initial rate of £10 per hour, however I did explain that petrol and blades for the equipment would cost alot and there is scope for movement or added expenses. 

Anyway, I've created a sole trader business and registered it with HMRC so just waiting for their reply. 

Currently looking for a sole trader account so my client can pay me and I can manage my money. Any ideas which one(s) are best to look at?

Looking at equipment, I have it all already from my own garden so I won't need to buy anything new yet in the short term. 

In terms of tax, basically say if I earn £2000 between now and April, but then I decided to spend £2000 on a trailer for my work as an expense, I'm basically ensuring I make no profit and thereafter don't have to pay any tax / NI.

Any advice on how my full time job will affect this. I earn 42k from this already.

So many questions 🤦 I am reading up on things but my basic thought it that I work for a few months to make a small lump sum of money and then I can buy new equipment? 

If you are going to be claiming trailers or tools for your work then I suggest you approach an accountant. It isn’t as simple as just writing off the whole purchase against your income for that period , and an accountant can properly advise you about depreciation and how to account for capital costs.

Browntoa

Have you got public liability insurance 

TidyGarden2020

Browntoa said:

Have you got public liability insurance 

No not yet. Something I will definitely look at thought. 

TidyGarden2020

So just a quick update.

The client I have started provided gardening services to has a big estate & gardens, along with and a number of other properties. He said that once I am done on his holiday home and he is happy with my work, he is happy for me to continue working for him for the forseeable as he has so much gardening to be done. I also agreed a new flat rate of £12.50 an hour so this is better nees. 
This is a part time thing to keep me busy as I already work a full time job. I really enjoy the gardening so i'm basically getting paid to do something I enjoy. Plus it keeps me busy which is what I like. 

Anyeay, I've done 10 hours so far this last week so it will add up. I plan to do about 8 every week if I can and that should be a health amount every month. 

I researched online about the best place to open a  business account and  the majority of places, including Starling, are closed to new businesses. I have applied to "Tide" for a online business account so I see what comes back. I've seen a few reviews that some places are taking weeks/months to reply to customers at the moment..

I also signed upto a free trial for quickbooks and I am really liking the app. I manually inputted 2 receipts (petrol & oil) and it seems really easy to work. I also managed to create a draft invoice and all I have to do is add in my hours and send it to my client when I have a business account finally open. 

I am using my own personal vehicle to get to and from the clients house so i'm presuming I should be claiming the mileage as an expense?

Apart from public liability insurance, is there anything else I should be doing here? 

Any advice appreciated.

Bossofmoney

Alot of places are not taking on applications for a business account at the moment as the majority are applying to get access to Bounce Back Loans. You might have more luck visiting the branch in person and doing it that way. 

Its a good business to start up, are you hoping it takes over eventually so becomes your main income? 

I feel you're pricing yourself out of profit. £12.50 an hour is about the rate you would get employed with holiday and sick pay, company van etc all included not to mention your tools and fuel. 
Most around here charge double that to be self employed. For the purpose of getting your foot in the door, even £20 an hour is a great saving for companies giving you plenty of hours. 

Do you have any plans for the business over winter when grass cutting etc isn't needed so much?

dcfc67

I also agree at £12.50 per hour you are going to struggle to make a reasonable income after all your overheads
Public liability insurance
Business insurance for van
Cost of tools/machinery
Accountant 
Fuel
Business bank account (running costs)

i wish you the best of luck

TidyGarden2020

Hi guys. Thanks for the advice and sorry for the delayed reply.
To clarify, this is just a side earner for me. I already have a full time job and earn £42k a year. I don't need to do it, its really just to keep me busy and so I can buy nicer garden machines on the business's expenses. My idea of doing a couple of gardens every month means i'll have a nice tidy sum to either buy some nice things or save up for better machines. 
Ok so since starting the business on the 19th June, I've totaled up 73 hours and also billed for a couple of other services. My total income so far is  £1145, and only about £250 of that is expenses. 

Going back to the hourly rate, I totally understand that £12.50 is pretty poor, especially i'f im using the machines and I've got to pay for petrol/oil/servicing etc. I have one client that I spent most of my time and it paid off to get in the door and start. Next year I am increasing my hourly rate for him. I think once ive done this summer he should understand my precision to detail and speed and hopefully doesn't mind an increase. If not, I don't mind moving onto other clients as he was good to with and build up some money. 

I've had a couple of other smaller garden jobs for local clients and i've charged £15 an hour, although they all seem very happy to pay that so again, next year I might look to increase this to a level £17/£17.50.

Quick question for anyone. If I earn about £2000 pounds by the end of August and I aim to buy a ride on mower for the same amount of money, can I put it down as a equipment expense? This should remove any profit and mean I don't have to pay any tax. Someone mentioned capital gains or depreciation, but surely that doesnt apply to a small business like me? Again my aim is just to make enough money to buy a trailer for my personal garden use and a ride on. Effectively my business is going to fund a couple of purchases for myself to use in my personal garden if that makes sense?

Thanks
TidyGarden2020

GrowWings

If you use something 50% for work and 50% for personal  theno half the cost is an allowable business expense.

I use cash basis for my business so work out the allowable expenses like that, but for businesses that need a lot of equipment you would be best speaking with an accountant about how to handle the capital expenditure stuff.

smej

What do you do with the lawn clippings? Do most gardeners just use the customers green/brown bin?