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Obviously I will ask an accountant at some point, but I wondered if anyone had any experience of the best way to deal with running a tiny business.
I am doing a few bits of paid photography work, and I'm not sure of the best way to gain any 'advantages' such as claiming fuel and new kit.
Sorry it's a bit of a vague question.
keep a full audit trail for everything
find an accountant
do you already do your own tax returns? im guessing not
Posting to follow with interest.
I am doing a few bits of paid photography work
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Posting to follow with interest.
Plot twist = Pimpmaster Jazz works for HMRC.
Plot twist = Pimpmaster Jazz works for HMRC.
I'm more interested in his photography and its 'advantages'... 😈
I'm more interested in his photography and its 'advantages'...
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I'll be photographing a few of you lot soon probably, so hopefully there will be non of those kind of 'advantages'!
Thanks, I am keeping decent records at the moment so it can be handed over when required.
Are you a social security investigator? 😯
It depends on what you call small. Less than £1k profit and you could do micro entrepreneur allowance
https://www.gov.uk/government/publications/income-tax-new-tax-allowance-for-property-and-trading-income/income-tax-new-tax-allowance-for-property-and-trading-income
Bigger but not a liveable income then self employed, any losses in your first year could be offset from your employment income and get a tax refund.
Profitable from day one and would take you into a higher tax bracket, a limited company with profits paid as dividends. Not as good as it used to be but still less tax than 40% as a sole trader.
I have a limited company (cost £15) and a business bank account (free for 12 months then £5 a month) initially set up for some contracting work that fell through, I do a little consulting on the side so keep it running. I like being able to get trade cards and as you say, expenses can be put through company, but it's getting stricter so document everything and only claim what you use and can prove is business use. It's easy to be "a bit naughty" and very hard to pay back when they come knocking (or write to you!)
OP, you don't really need anything more than three line accounts tbh.
I ran a side line photographic business for a few years read a book / web site on what you can/can't claim against (small business book) will do.
Keep you books straight as an arrow and it's easy. just don't wait to work out your tax / receipts until the night before the deadline of getting the numbers in (you only do that once) lol
File for subject invoices (costs)
File for Jobs (Invoices)
For your first couple of years apply for NI exception as your paying plenty of NI in your employed role until your earning number XXXX you will not have to pay NI on your side business earnings.
Have fun, eventually I got sick of working constantly either for my employer or the business and sacked it off BTW I now have free time again to ride bikes and things. You have been warned. 🙂
I have a limited company (cost £15) and a business bank account (free for 12 months then £5 a month) initially set up for some contracting work that fell through, I do a little consulting on the side so keep it running. I like being able to get trade cards and as you say, expenses can be put through company, but it's getting stricter so document everything and only claim what you use and can prove is business use. It's easy to be "a bit naughty" and very hard to pay back when they come knocking (or write to you!)
Ltd company will also require a corporation tax return to be submitted to Companies House and HRMC. This can only be done by an accountant so don't expect much change from £500....
This can only be done by an accountant so don't expect much change from £500....
Not any more
When people talk of a full audit trail, and 3 line accounts etc. what exactly is meant? Is keeping a record (spreadsheet for example) of income/outgoings, from where, and when enough?
The easiest way is to register as self employed with hmrc and then do a tax return each year. You have to input income and tax for each job done over the year but there is an allowance to offset expenses against your tax liability. There's no cost for this. its always worth keeping records to check if the business makes a profit!
Cheers all, some interesting stuff, especially that micro business allowance thing - I'd not heard of that before.
UrbanHiker,
no you need to keep all your receipts for upto 5 years from what I remember.
3 Line accounts is
Receipts (costs)
Invoices (jobs)
Profit/Loss (jobs - costs) (In its most basic form).
Kind regards
Andy