Side Gig - where to start?

codingtutor

I've recently returned to the UK after a few years abroad due to a work assignment. 

I'm employed full time and a high rate taxpayer. 

In my spare time, I'm working on starting my own business which involves tutoring others over zoom. Turnover could be up to 10,000 per year to start with if all goes well. 

My assumption is to:

• Find an accountant.
• Pay for a virtual address.
• Register as a LTD business.
• Be a director of the business.
• Keep the money in a business account.
• After paying tax on the business income, pay myself a lumpsum?

I won't be supposed if I've got the above totally wrong and would love to hear experiences from others who have started a side business alongside their main employment. 

Thanks

Sandtree

codingtutor said:

I've recently returned to the UK after a few years abroad due to a work assignment. 

I'm employed full time and a high rate taxpayer. 

In my spare time, I'm working on starting my own business which involves tutoring others over zoom. Turnover could be up to 10,000 per year to start with if all goes well. 

My assumption is to:

1. Find an accountant.
2. Pay for a virtual address.
3. Register as a LTD business.
4. Be a director of the business.
5. Keep the money in a business account.
6. After paying tax on the business income, pay myself a lumpsum?

I won't be supposed if I've got the above totally wrong and would love to hear experiences from others who have started a side business alongside their main employment. 

Thanks

1 - for £10k/year accountancy fees will be a fair amount but if you are incorporating then it may be an idea
2 - why on earth would you do this? As you are incorporating and having an accountant its likely they'll allow you to use their address as the registered office
3 - Given item 6 it doesn't seem that beneficial but if you want to you can
4 - fine, remember to register for self assessment
5 - if you incorporate you have no choice but to as its not your money
6 - you can pay dividends to yourself and then include it on your self assessment


Bits you've missed... make sure your employment allows you to have a side hustle, some companies won't. Consider if you need any insurances, most likely Professional Indemnity. 

Most start their side hustle as a sole trader and only look at incorporating if it takes off

codingtutor

Thank you. 

I wasn't aware most accountants would use their address to register it. Sounds perfect. 

I have permission from my employer (albiet it in short email along the lines of "yes thats fine). Nothing I'll be doing will be a conflict of interest. 

With the sole trader route would it be simply 40% tax on everything I earn through the business after expenses? 

Thanks