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I'm after a bit of practical advice on how to go about earning some pocket money from skills I have from a previous job. Basically this new venture would need about £1700-2000 to get hold of the required equipment (I can buy this with savings etc) and then I could do I in my "spare" time around my current job. I don't intend for it to ever become full time, but it would be nice to keep my hand in with some reasonably specialist skills, and it's something I enjoy.
My questions are mostly about the practicalities- tax, insurance, accounts, registering the business or not (as a sole trader would I have to?) and whether I should tell my current employer (I won't be competing with them or anything like that, but we share the same client base).
Anybody else done anything like this? Was it an enjoyable use of free time, or a complete ballache?
Sorry it's not very specific, but I don't want to get told off for advertising when it doesn't even exist!
Do it as a hobby, and if you ever need to invoice someone - then it's a business. Before that point, it's a hobby.
same client base as employer would make alarm bells ring for me.
sole trader would wok if you thought little risk of being sued for negligence / small claims and so on.
That way you can see how it goes without the palaver of Ltd co. Should have a small business ambassador type person in your local area. Or even your local bank manager. Equipment - if for business use them HMRC set out the claimable allowances / what doesn't count. Also need to start your NI contributions as self-employed, and set aside cash to pay your self assessment tax bill (if any!)
See if you can find a local, recommended, small business accountant as well.
If it's only pocket money then just file a tax return on the income.
I would tell your current employer, assuming they will be accommodating, as you don't want it cropping up in conversation. Then you can both offer referrals in either direction.
@kcal basically I work in a bike shop, the" business" would be a service provided to cyclists which isn't offered by a bike shop. I agree it's a grey area and I think I wouldn't be comfortable doing it unless I chatted it through with them first.
Just had another thought- do I need to check my mortgage/home insurance terms?
Being Ltd has no bearing on being sued for negligence. A director of a Ltd co can be held personally liable for the loss of others caused by the negligence of a Ltd co.
Liability underwriter for 15 years...
The 'best' thing , IMHO, is to keep good financial records:
Costs (set up, running costs, travel, advertising etc etc)
Income
Do this in excel for each tax year (april to april) and simply have a formula of "income-costs=profit"
You can then simply either write to the tax man (easy enough - just get your local office address and include your NI number, and say something like "this year I had £300 untaxed income" OR "This year I have £400 of unreleived expenses")
They are likely to change your tax code accordingly, and is easier than tax returns.
However, if the income is big bucks (on HMRC site somewhere) then you'll need a proper tax return even if you're in full time PAYE employment.
DrP
Doing some back of an envelope sums it's not going to be big bucks! It all sounds easy enough to do if it's just a case of being organised 🙂
ah, thanks dbg. I just assumed that's why everyone disappeared into Ltd Cos (as well as the tax implications)..
Home insurance - I have told my insurance co I carry on a business, they are happy with that, but - big but - there are little or no 'visitors' associated. Not sure if you had folk passing in and out. Can't help on the mortgage front..
You can set up as a sole trader pretty easily and you won't be VAT registered. All fairly easy. However I agree with the above "I won't be competing with them or anything like that, but we share the same client base". That probably won't be how your employer see things. How do you differentiate your "hobby business" from your "employer" job. If your hobby business goes badly and reflects on your normal job, what then?
Van we just clear the air...
are you, or are you not, going in direct competition with your pimp by setting up an 'evening gigolo' hobby..? Or am I completely mistaken...
DrP
Go online, register as a sole trader, keep records, file return yearly - very, very simple to do and nothing at all to worry about.
I would worry more about getting the boot if the shop find out.
Talk to the shop first - in my old world contract was a statement that if I worked outside of the business in a similar field they could sack me, pretty standard stuff to stop people taking the piss and stealing the employers business, even if it isn't directly.
Remember using our employers contacts & customers is using their business resources, they have had to advertise / serve to gain custom and that costs money / time.
Hmm. My pimp deals in quite a niche area, and is exclusively retail with some after sales support. The new venture would be a more personal service to each client, with a service provided rather than any goods.
I agree that I should talk to the pimp. And thanks for the info re tax etc- need to do more reading on that!
As with most things like this, the theory is easy- making it work might not be!
I'm reading that he is offering a service that his employer isn't,
E.g. Wheel building or suspension servicing or powder coating or something?
Anyway, as has been said there will be a cost to your employer even if it's only you using their customers, so you need to clear it with them.
Could you provide the service through the shop? e.g. A couple of evenings a week, use their workshop and split the profits with them?