New Business Start up question

New Business Start up question

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Hi All,

Quite new here so I hope you can help me.

I am looking to start a web design business. I have some associates over-seas who are web designers.

I wish to market and sell their services to web design companies in the UK and also from a small company I form.

I already have a full time job here in the UK, therefore paying tax, NI etc.

I want to start as a sole trader, maybe even a partnership (this is still in discussion).

I highly doubt I will be meeting the VAT threshold, for the first year anyway. I am aware that I need to pay tax etc, but how would this work considering im already working full time?

I have never owned/started a company before.

What would my steps need to be to put this in place?

Register business?
Register as sole trader? (if so do I still need to register business name?)
Open business bank account?

How would I pay taxes etc, how much would I pay? - this is the part which confuses me the most.

In other words, can you provide me with step by step instructions on what I need to do legally to start trading?

I look forward to hearing from you.

Kind regards, and thank you in advance for your advice,

Sunny.

Replies (5)

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By pauld
15th Nov 2011 14:15

once you have all that info from an aweb member...

and have been trading for a year, you can then post on here all your income and expenses and perhaps some kind soul will give you a step by step guide on how to prepare your accounts and tax return. All free of course.

Why dont you ring a local accountant, most offer free consultations and so will be able to guide you in the right direction and give you a quote for ongoing accountancy costs which you will need to include in your budgeting.

This will be far more beneficial to you than getting snippets of information from various aweb members.

 

 

 

 

 

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By ringi
15th Nov 2011 14:42

Start with the http://www.businesslink.gov.uk website

This has lot of useful learning resources on starting a business in the UK, both soletrader and Ltd.

Also some areas have free advice centers; try asking in your local library.

Then if you have never done any of this before, you are lickly to need an accountant for at least the first year or two.

Most of this is not too complex, (less hard then writing computer software).  But you have to know a lot, before you know if you are hitting a complex bit!   So I would start off with an accountant unless you are very sure you can cope yourself after reading the businesslink page.

By double checking everything your accountant has done, you will start to understand what you can do your self.

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By User deleted
15th Nov 2011 15:44

Ok ...

... here goes

Step 1 - Buy/make/offer a product or service

Step 2 - Find a customer

Step 3 - Sell them a product or service

You are now legally trading, assuming your product or service is not illegal itself (or to be used by an illegal trade).

The tricky part is making sure you report your activities to HMRC and pay over the correct amount of tax. That has nothing to do with trading and I would recommend as above that you find a reputable accountant to do this for you - so you can concentrate of growing your business.

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By Rikos
15th Nov 2011 16:59

Response

Hello,

Firstly good luck with the new business idea.

When you decide to start trading you have to inform the HMRC that you have started a business as a sole trader or partnership. This is basically a forml which they will then enter on their system. Can be found here http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm

You will have to pay tax on your years profit through filling in a self assessment form. For example - accounts ending 31/03/2011, self assessment has to submitted by October 2011 (paper) or January 2012 (online), your self assessment includes any other employed work, charity donations, pension contributions, student loans etc. You then include your profit/(loss) for the year and the system will calculate what you owe for that year which will then need paying by 31st January 2012.

You will have to pay NI again though, even though you are already paying it. This you have to start paying as soon as your trading, Class 2 is £2.50 a week unless you think your earnings will be under £5315 2011/12, in which case you can get a small earnings exemption. Class 4 National Insurance contributions are paid as a percentage of your annual taxable profits - 9 per cent on profits between £7,225 and £42,475, and a further 2 per cent on profits over that amount. This is paid when you pay the tax.

They take into account your tax & ni paid on other employment but this only works in your favour if you make a loss.

With regards to your business name, there is no legal requirement to register your name anywhere as if your a sole trader you will A Smith trading as Web Design Solutions etc. It also does not matter what name you have unless it breaks trademark laws. The only time it matters is if you want to become a Limited company and then you have to register with companies house. If your thinking of doing this I'd check that the name you want is available on the companies house website. Dont forget a change from sole trader to limited does change how your accounts have to presented and also requires you to file them with companies house every year.

If your not sure about how to put together accounts try and find a local book keeper or accountant that can give you some advice or do it for you. There are quite a lot of items you can reclaim to help reduce your tax bill at the end of the year so it is worthwhile getting advice.

Most importantly dont forget to record every income or expense that is business related and keep documents to back it up.

A business bank account is entirely your choose but would recommend it to keep money seperate.

I hope this has helped answer some of your questions. Feel free to dorp me a message for any more help.

All the best.

Richard Taylor

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By sunny81
04th Jan 2012 16:59

response

Thanks for that guys, what happens if i register as self employed and mess up my calculations or decide not to progress in the business?

 

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