New Business

Business_Boy

Morning all,

I’m hoping to get some advice. I’m starting a new business in the next 2 months. I’m expecting this to bring in approx £1,000 per month, with the payments being made through PayPal. Alongside this I have a full time job, which pays approximately £40,000 per annum. 

My biggest question at the moment is around tax. So with my full time job I pay tax directly through my employer. With my new business I assume I will need to complete my own tax returns. Is this the case and does anyone know any good blogs, websites etc. about this process? I’m a total newbie to running my own business so a bit clueless on the self employed tax side. Any help will be much appreciated.

Thanks, 

BB

gingerdad

really worth talking to an accountant, ours costs a couple of hundred pounds a year but saves us 1000s. 

oldbikebloke

can you use google?

https://www.gov.uk/topic/business-tax/self-employed

remember the tax return covers ALL INCOME so £40k employment +  taxable net profit of self employment (£12k income - costs) + anything else outside an ISA 

don't be late registering - ie read every page in the above link. If that is too much for you to digest, pay an accountant to do your tax return until you have learned what they do to create it 

tacpot12

There is some good information on the YouTube channel called "Small Business Toolbox".

Barry_Bear

Yes you will probably have to submit a Self Assessment tax return for profits on your business income. You need to decide if you will run the business as a sole trader or register a Limited company. You should research the pros and cons online. But one big difference is that being a Limited company provides "limited liability" which means provided you never trade while insolvent (i.e. knowingly trade when the business cannot pay creditors) and don't provide "directors guarantees", then your personal assets cannot be claimed through the courts against business debts. Running a limited company does require filing accounts and returns annually, but for a very small company no accountant audit is required (you can file your own accounts taking the figures off your own accounting package) and it's all done online via Companies House https://www.gov.uk/government/organisations/companies-house
As far as doing Self Assessment tax returns, a low cost and easy service is https://www.selftax.co.uk/

Grumpy_chap

The simplest and quickest way to get the advice you require is to engage an Accountant - it should not cost you a great deal.
Irrespective of whether you decide on Sole Trader or Ltd Co. business, you will most likely need to do self-assessment if you structure things in such a manner as to be tax-efficient.

oldbikebloke

Barry_Bear said:

Yes you will probably have to MUST submit a Self Assessment tax return for profits on your business income. 

there is no "probably" in the context of a taxpayer (he has 40k employment income after all) with self employment income >£1,000 and that tax return must cover everything, not just SE profits 
https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return