Help me Oh STW, authority on everything. (-:
Currently, my Other Half is in full time employment. It'd seem that there's a chance that she's going to get some freelance work put her way, independently of her 'main' job. This could turn out to be a one-off, or could end up being a regular thing.
She's keen to do everything above board with regards to tax and accounts etc, however we don't really know where to begin or what we're legally obliged to do. Back when I was contracting I took the easy way out and used an umbrella company, however we don't really want to be paying a retainer to an umbrella or going through the expense and hassle of setting up a company if it turns out just to be an isolated piece of work.
Anyone have any insights in how best to proceed here? Is there a cut-off that you can earn before you have to start keeping accounts and talking to taxmen?
call yourselves "barclays" and then just send the taxman a fiver that you're previously wiped yer bum with ?
(I know, I know - back under my bridge)
No no no, I want to do everything *legally*.
(-:
call yourselves "The Guardian Media Group" and then just send the taxman a fiver that you're previously wiped yer bum with ?
FTFY.
I think it rather depends on how much you earn, beyond that my knowledge is very limited!
Go the self assessment route. Call HMRC and register, opt out of paying stamp (class 4 NIC)unless you expect the profits to be greater than £2000. Keep a simple spreadsheet of income and expenditure including business miles along with anything else you think may be business related. Reference the spreadsheet to your invoices and receipts. You don't need a seperate business bank account unless you enjoy paying fees.
You can do SA yourself or a good accountant like ourselves would charge around £110 plus VAT to take care of everything for you.
Register as self-employed.
Keep accounts.
Put 30% of what she earns into savings for tax and NI.
HMRC will send a self-assessment form (or you can register to file it online).
Start keeping receipts for everything but don't take the piss.
So, you can register as self-employed even though you also have a regular full-time job? Presumably then, anyone can do that, the only prerequisite being that you have to fill in a SA form annually (unless you un-register)? There's no downsides or costs there other than the paperwork?
opt out of paying stamp (class 4 NIC)unless you expect the profits to be greater than £2000
What's 'stamp'? And what happens if we opt out of that and then do turn a profit (gross profit?) of more than £2000?
"Stamp" is the old fashioned term for NI. There are different classes you pay. But you'll need to check up on the HMRC site for that...I just pay out what my accountant tells me.
Once you're registered for SA then you can opt out when no longer required. The SA is also a good way of reducing your earnings and claiming back tax on courses required to do your job that your employer doesn't pay for, business mileage where the employer doesn't pay HMRC rates. Again it's down to your circumstances and the more knowledge th better suited the accountant is to advise.
Stamp is the common name for the reduced class 2 (not 4 like I said earlier) NIC. If your net profit (income less expenses) is less than the small earnings threshold then you are not required to pay NIC. If you do exceed the limit then the NIC will be due with the tax on the SA by the 31st Jan the year following 5th Apr.
Ok, cool. Thanks for the replies so far, it's really appreciated. Is it perhaps worth her hanging off starting until April so as we're not buggering about with a SA for a single month, then?
At what point would you / should you worry about setting up your own company, is that basically "when you're getting regular income"? Presumably you can't just make up a froody name and start slapping it on business cards, you'd need to go through Companies House before using it to represent yourself?
I'm a sole trader so I am just Mr Deadly Darcy T/A *trading name*. Probably best if Mrs Cougar stays as a sole trader unless something she did wrong might lead to someone taking her house. For the time being anyway. A basic public liability insurance might be advisable - or might be something she doesn't need.
You can come up with any name and put it on business cards and letterheads now as long as you're not ripping someone else's goodwill off.
You don't need to bother with any of the companies house thing - she would operate as a sole trader - no need to register anywhere. It is worth checking 123reg.com before picking a business name - even if it's just to check the chosen name isn't too similar to any other businesses.
As far as SA is concerned, when you're filling in the end of year SA form (online) you have the option right at the start to tell them how many different employers you have - dead easy!
...and what userremoved said about 123reg.com. Though I didn't bother, I sort of wish I had.
Depends on if she would need to spend on setting up as any losses can be carried forward and set off against future profits.
She can trade as a sole trader through self assessment. As a sole trader she can set herself up Mrs Cougar t/a (trading as)Big Business. If the business takes off then there are benefits that outweigh the additional costs of forming and reporting on a Limited Company. A limited company needs to register a name with Companies House which can't conflict with others already registered.
If you need further help with this then email me for my business contact address and I can get a better understanding of your circumstances.
Ah, cunning.
WRT insurance, the work is going to be writing magazine columns pretty much, so it's not likely that anyone is going to sue her for faulty workmanship or suchlike. I guess there's a remote possibility of libel or someone otherwise taking offence to something she's written?
If you need further help with this then email me for my business contact address and I can get a better understanding of your circumstances.
I might just do that. Either way, I really appreciate the offer.
No no no, I want to do everything *legally*.
Fair play I guess....all I know is for the last 20 years Ive been keeping myself just about afloat with "extra curricular" work or privates as I know it and god help me if the tax man calleth.
I know what you mean. It's a bit different though, I think, between what she's proposing and "of course I'll take a look at your computer, I accept payment in most major forms of alcohol." By definition it's going to be higher-profile (or she's doing it wrong).
And, she should tell her current employer, they will likely have a policy on this sort of thing, they will check for any clash of interests. If you don't tell and she is caught, sackable offence IIRC.
call yourselves "The Guardian Media Group" and then just send the taxman a fiver that you're previously wiped yer bum with ?
*sigh*
And, she should tell her current employer, they will likely have a policy on this sort of thing, they will check for any clash of interests. If you don't tell and she is caught, sackable offence IIRC.
Yep - very good point, but this is already in hand I believe.
So a quick checklist
1. Clear it with her employer
2. Tell HMRC that you are going to be self employed (as well as working for her current employer)
3. Choose a name (check 123reg.com for other business names that may be similar)
4. If going sole trader, start trading - business cards etc., can be printed
If going limited company, register name and get an accountant.
5. Open a business bank account. You can use your own current account, but it is simpler to have a separate one.
Some good info here - http://www.freelanceadvisor.co.uk/ and here http://www.freelanceuk.com/tax_advice/index.shtml
Good luck
Awesome. Thanks guys.
Open a business bank account. You can use your own current account, but it is simpler to have a separate one.
Pourquoi?
Pourquoi?
It just keeps things simpler and makes it easier to reconcile your books against income and expenditure if all the income and expenditure is from the same account.
Basic bookkeeping ensures you can keep track of your income and expenses. A separate bank account as a sole trader just increases costs. You only need a separate bank account if you setup a limited company as that is its own entity.