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General Chat Thread, Setting up a buisness? in General; ...
  1. #1
    Ben-BSH's Avatar
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    Setting up a buisness?

    Been thinking alot recently, and i would love to take the current "can you have a look at my PC, ill throw you a bottle or two of booze" further, and start charging properly, for web design (which i am really into, and have several people interested in, wanting sites, and offering money) PC repairs, etc.

    What is the best way to go about it? i am not the type of person who is just happy to take £500 to make a site, and not declare it, as karma would only ensure (should it be illegal, im not even 100% on if it is or not, to take money to do a website and not declare it as earnings) i would get caught out, and then be put in a lot of trouble.

    I have seen it looks like about £35 to set up a company via a online website, which just seems to good to be true, im sure there are more hidden costs (of course i know i would have to pay tax on my earnings) but is there anything to watch out for? or more importantly a morally and legally correct way to do things like web design but not require all the fuss and hoohah?

    Thanks in advance

    update 1


    Just an update, have spoke to the line manager, he reckons its much easier, starting off, to simply declare all "extra" earnings at the end of the year, on the big form thingamujiggy (going back to Witch's comments on voting, yes, just coming out of Education, i know NOTHING about tax or voting, or any "life important stuff")

    What are the benefits of this also? and pitfalls i should look out for?

    Thanks guys & gals


    update 2


    one thing i did forget to mention, sorry, DOH! i am in full time work already, as an IT Tech, this is spare time stuff working at home.
    Last edited by Ben-BSH; 6th May 2010 at 12:14 PM.

  2. #2
    Ben-BSH's Avatar
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    Just an update, have spoke to the line manager, he reckons its much easier, starting off, to simply declare all "extra" earnings at the end of the year, on the big form thingamujiggy (going back to Witch's comments on voting, yes, just coming out of Education, i know NOTHING about tax or voting, or any "life important stuff")

    What are the benefits of this also? and pitfalls i should look out for?

    Thanks guys & gals

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    jamesreedersmith's Avatar
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    If you register your company for a 35 jobby this will make you a limited company and liable for submitting annual returns that must be done by an accountant (£££) just register as self employed with the inland revenue and do a self assesment annaully.

    Cheers

    James

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    Ben-BSH (7th May 2010)

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    Ben-BSH's Avatar
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    one thing i did forget to mention, sorry, DOH! i am in full time work already, as an IT Tech, this is spare time stuff working at home.

  6. #5
    theeldergeek
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    Quote Originally Posted by Ben123 View Post
    Been thinking alot recently, and i would love to take the current "can you have a look at my PC, ill throw you a bottle or two of booze" further, and start charging properly, for web design (which i am really into, and have several people interested in, wanting sites, and offering money) PC repairs, etc.

    What is the best way to go about it? i am not the type of person who is just happy to take £500 to make a site, and not declare it, as karma would only ensure (should it be illegal, im not even 100% on if it is or not, to take money to do a website and not declare it as earnings) i would get caught out, and then be put in a lot of trouble.

    I have seen it looks like about £35 to set up a company via a online website, which just seems to good to be true, im sure there are more hidden costs (of course i know i would have to pay tax on my earnings) but is there anything to watch out for? or more importantly a morally and legally correct way to do things like web design but not require all the fuss and hoohah?

    Thanks in advance
    Set up as a Sole Trader, you have no need to go limited unless you are going to get involved in VAT.

    But yes, you can buy a limited company 'off the shelf' for next to nothing. You'll need to do your homework as to who is the best to buy from.

    As for paying tax, you just need to inform the Inland Revenue (or whatever they call themselves these days) that you are now in business and they will send you a tax return to complete each year. Setting up a business is not difficult by any stretch of the imagination.

    Personally, don't think of giving up the day job in favour of computer repairs. It's a mugs game these days, in my humble opinion. Far too many 'experts' competing for too little work, all undercutting each other and no-one really making a decent living. The only way you'll win, is to go big and offer full on business services, but with the current economic climate as it is, I'd not chance that even. Added to that, to offer business services, you'd have to give up the day job. No good saying to a business client, "I could pop round after work on Friday"...

    EDIT : I see you only intend to do this part-time. Wise move.

    Best way to go about it? Set up as a Sole Trader. No outlay actually required.
    Last edited by theeldergeek; 6th May 2010 at 12:11 PM.

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    Speaking from experience, it's only advisable to set up or register a LTD company if it's your only job. There is more tax to pay, paperwork is doubled and you need to get an Accountant to do your books.
    As a sole trader, there is national insurance to pay, that can either be monthly DD or quarterly, it's currently £3.40 a week. Your books can also be done by yourself.

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    Ben-BSH (7th May 2010)

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    Ben-BSH's Avatar
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    so are people in the agreement here that simply continuing like i am, but just declaring it all on the form i get at the end of the year, is not a good way to go? it seemed the simpliest when my line manager explained it to me.

    i do not need to setup a company, i just thought it was the only legal way to be able to say yes to people asking for web design/ PC repairs etc.

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    creese's Avatar
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    Quote Originally Posted by Ben123 View Post
    so are people in the agreement here that simply continuing like i am, but just declaring it all on the form i get at the end of the year, is not a good way to go? it seemed the simpliest when my line manager explained it to me.

    i do not need to setup a company, i just thought it was the only legal way to be able to say yes to people asking for web design/ PC repairs etc.
    Carry on as you are, if you have the time and energy. One day you may have to decide to drop the full time/original job and then would be the time to start a company.

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    jamesreedersmith's Avatar
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    Seconded

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    I think you should be paying National Insurance if you work for yourself. You still declare your earnings at the end of the year. Speak to Inland Revenue, the woman i spoke to recently was very helpful.

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    Whatever you do , don't go for an LTD or PLC format - that means YOU are PERSONALLY LIABLE for any losses on the backend of work you do...
    Just go for sole trader - it costs nothing, talk to the tax man, talk to your local business link direct service (it's free) and choose a trading name to trade under.

    Pay your NI extra contributions to cover yourself and as long as you earn under something like £30-40K from your work you don't have to worry about VAT.

    Pick up the phone and talk to the taxman, they'll put you on a self assessment tax return each year in which you'll have to detail main working stuff and your own venture losses and gains.

    Go for it mate!

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    Ben-BSH (7th May 2010)

  15. #12

    localzuk's Avatar
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    Quote Originally Posted by tsky View Post
    Whatever you do , don't go for an LTD or PLC format - that means YOU are PERSONALLY LIABLE for any losses on the backend of work you do...
    Just go for sole trader - it costs nothing, talk to the tax man, talk to your local business link direct service (it's free) and choose a trading name to trade under.
    Sorry but that is simply not true. LTD stands for 'limited liability' - meaning that the losses that can be incurred are limited purely to the finances within the business, any personal assets are not included. PLC is not possible for a small company anyway, as you need to float on a stock market and most have entry requirements. If you stay as a sole trader, if you make a loss and owe money to a creditor, you are personally reponsible for that debt, and as such if you own, say, a house - you could lose it.

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    Ben-BSH (7th May 2010)

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    It is limited liability yes, but you are personally liable to the tune of several tens of thousands of pounds!

    For what he's doing though he'll not be using creditors, if he was going to heavily rely on them then it's best to go for an LTD. All he has to do is ensure his SLA's and contracts show he is not liable for anything...

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    localzuk's Avatar
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    Quote Originally Posted by tsky View Post
    It is limited liability yes, but you are personally liable to the tune of several tens of thousands of pounds!
    You are only liable for the amount you put in to the business. So, if you set up an LTD, and were working with 3 other people, each of you is only liable the amount you put in. So, if you say you'll put in £10k, and only put in £5k, you are liable for the remaining £5k should the business fail. ie. the liability is limited to the assets available to it. If you set up an LTD with £10k investment, and pay the whole amount in, you are no more responsible for the future debts than anyone else is.

    What tens of thousands are you talking of?

    Oh also, to the OP - have you thought about professional indemnity insurance? If your actions were to lead to someone's computer blowing up, and you didn't have insurance, you'd be personally liable.

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    Ben-BSH's Avatar
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    i doubt VERY much i will be earning more than 2k! this is why i was thinking possibily just delare what i do earn as additional income.

    im on the phone to the Taxman/lady now see what he says, apart from "gimme ma money!"

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