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BizNess BizNess is offline
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Join Date: Jan 2004
Location: london
Posts: 229
Doing Business whilst employed

Hi,
Just wondering if anyone can tell me more or point me in some direction about starting and running a buiness whilst still employed.

Basically i would like to know the legal and tax implications, do i have to tell them etc?

Regards
Biz
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Statler's Avatar Statler Statler is offline
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Hi,

You may find the following Inland Revenue pdf file of interest:

http://www.inlandrevenue.gov.uk/startingup/pages.pdf
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rayne rayne is offline
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Join Date: Jan 2003
Location: London
Posts: 164
Hi,

I'm doing a similar thing - basically you have to register as self employed with the inland revenue, however as you work as well you can opt out of the basic national insurance contributions (think they're class 4? the one where you pay £2 a week regardless of income). There's a second form which you fill out to do this.

You only pay tax and additional national insurance contributions on any profits from your business, and this is done via your annual tax return, so you have to have all your accounts details for that. However obviously you'll probably already be using your tax allowance through your employment so will pay tax on all of the profits at the relevant rate (ie 23% or 40%).

I think that's basically it - if anyone else can tell me differently then please do!!!

Rayne
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BizNess BizNess is offline
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Join Date: Jan 2004
Location: london
Posts: 229
Ok being a lazy ****** (not a good start) I havenít read all the PDF but I will. Just to confirm some details.

So I understand you can be both employed and self-employed at the same time.

To do this I fill in the appropriate form. When I change my tax code will my current employer be told this? (dont really want to rock the boat at this early stage)

At the point of registering as self employed seems to "throw you in at the deep end" (tax returns etc) is it best to be prepared? Would people recommend you register self employed early or leave it to the last minute to do this??

When I say last minute - I mean sort bank accounts / business plans / stock etc out before doing this?

Thanks for your help
Biz
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Clementine Clementine is offline
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Join Date: Nov 2003
Location: Twickenham
Posts: 319
Biz,

I am in a similar position to you right now.

I am working full time for an employer at the moment and am hoping to work full time for myself very soon. There is a delay in that certain things are taking time to develop before I will be in a position to take the 'final leap' into the new project.

I have been VAT registered since 1st October last year so that any expenses incurred whilst setting up will have the VAT claimed back. I don't have to claim until 29th Feb though as that's the first one.

I today registered as being self employed, as you have 3 months from the end of the first month you started working self-employed. I started (officially) on 1st October last year, so I have until the end of January this year to let the Inland Revenue know. This just means:

1) It's official,
2) that I will have to do my own self assessment for tax from the end of the next financial year (I think) onwards, (I do my own anyway so there's no change for me),
3) that you will pay £2 per week NI contributions, probably by direct debit, on top of whatever you pay through PAYE at your employers.

I probably won't be making any profit until the middle of this year at best, but by being set up it allows for everything to settle down like the business bank account which has been done also as of 1st October.

All of this was possible because I had the business plan sewn up first thing, as the VAT people and especially the bank will want to know what you plan to do.

I don't know much about the tax codes I must admit, but any changes will be made, I guess, on receipt of your first tax return, and that wouldn't be for a long time yet as you have until the end of the year to provide your return, so if you had to do one for now until the end of April, you wouldn't have to submit it until the end of the year if you don't want to. If your first return is due NEXT April you will have even longer.

Experts out there will probably be able to polish up on my basic knowledge here, but the thought that someone else is going through what you are may help your confidence!

Good luck!

Clem.
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BizNess BizNess is offline
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Join Date: Jan 2004
Location: london
Posts: 229
Clem
Sounds like your organised and know exactly what you want to do. At the moment my position is that

I know that after 10yrs being employed I want to be the employer (even if its a one man band)

I have a number of ideas, mostly IT based so I donít require initial outlay or premises in the early stages but will find it very hard to predict possible incomes and success and so intended to run a number a once to see which one matured fastest.

With this slow start up period and intermittent income means I do not want to jeopardise my current employed position until the income level reach enough to cover my costs (also my girlfriend would execute me!)

The official set up you describe seems fairly simple but without these income indicators for the bank and VAT people I am worried that I might find it hard to get a "company status" and the financial concessions associated.

If i run the business from my "front room" initially at what point will this cause a problem registering as a company or in my trading ability?

Good Luck to All
Biz
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hollyyetmore hollyyetmore is offline
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Join Date: Sep 2003
Location: London
Posts: 442
If you're registering as a ltd company you can usuall pay a small fee to your accountant and have their address as your registered address, the only thing with this is trying to prevent any post going to that address as they will almost certainly charge you to send it on.
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