I would talk to a local accountant early on. I meet all my business start ups for free initially and once they have decided to use me we meet again to sort out the record keeping and sole trader v ltd co, VAT type issues. We meet again once they have been trading for a couple of months to review the records as well.
I would definitely have a few meetings with local accountants. Most of them offer an initial free consultation. Have you got friends who are using accountants? Recommendations are the best place to start. I would personally also recommend a qualified accountant (ACCA or ACA) although that's not an absolute requirement if you're short on cash since qualifications make the service more expensive. However - you've got at least a minimum quality standard they need to maintain whereas non-qualified accountants may be very good or very bad. And you just can't tell.
I think I deceided to just be self employed for the time being. So it is a good idea to get an accountant now? I am to be frank crapping myself at the thought of doing this! I have no savings and no lee way on finances. I am going to phone the mortgage company up and look into taking a break from payments for a couple of months. I am employed at the moment but am planning to set up doing the same services quite close by so I will deff be given my marching orders when my boss finds out. I have to find some money up front to start off with and need to start paying some insurances etc. In short I am putting my house on the line by starting this venture! eeek!
Income tax is the same for everyone - once your total income reaches £42,500 you start paying a higher rate on any additional income. If this is employed or self employed income the rate is 40% but dividends from a company are taxed at a lower rate.
As a self employed person a decent service from a competent accountant is likely to be anywhere from about £250 up. It may be worth forming a company which is more complicated to administer but may save tax as well as work better alongside your existing employment. In this case it is likely to be about £750.
These figures are for a small practice, a bigger firm with offices in the town centre are likely to be twice that, a national firm twice that again.
Can I join?! Slowly setting up my own business (in addition to working f/t) and have spent this evening trying to figure out corporation tax. I just want an accountant to tell me what records to keep, then to give them a nice neat spreadsheet at the end of the financial year to sort out - any idea how much that would cost? PLus does anyone know if being s/e would mean I paid superhigh tax as I already have a job? Scary/exciting, all this!
Company is a separate legal individual - you would be a shareholder and an employee / director. The money earned would belong to the company and you would have to withdraw it for yourself through legitimate means. Working through a company has got some tax advantages and it can protect your personal assets but it's more complex to administer.
Self-employed is when you as an individual do the work and all the money earned belongs to you. You pay tax on this money under personal taxation rules (the company would pay tax under corporate taxation rules).
It is worth finding an advisor to explain the differences in detail to help you make a decision which entity is the best for your trade.
Watching this thread with interest. What is the difference between a company and self employed. I too am slowly in the process of setting up my own business, also planning to rent a room and get a small amount of equipment.
You need to register for tax as soon as you start trading ie when you do any of the things you mentioned, but first you need to establish whether you are going to establish a company or be self employed.
I am slowly in the process of becoming self employed. When do I need to get an accountant (if at all)? I am planning to rent a room and some equipment. The rest will be buying stock and receiving payments from clients along with insurances etc. I don't want to miss any tax benefits by doing it myself and getting it wrong. Also when do I need to register for tax? Also I have a credit card which is interest free (for the moment) but not registered with the business account. Can I use it for the business? Many thanks for any advice.