How do you set up a small WFH business?

[Miljea]

Can anyone direct me towards the legals, the 'how to' of doing this?

It would be doing design work- flyers/posters/advertising material.

TIA

Are you operating as a sole trader? If so then the only thing you really need to do is register with HMRC as self-employed. Not really anything more to it from a legal POV.

Yes, I started off as a sole trader before later changing to Ltd co.

You do, as Meg says, just need to register as self-employed. You have to pay NI, can't remember the details but you get NI bills every month or quarter, and of course at the end of the year have to do a tax return.

My website designer was really helpful and I got some free advice from an accountant.

I also took out professional indemnity insurance as I'm a will writer, but I guess you may not need that.

Thanks. What if the business fails to make a profit? Presumably you don't pay NI on that. I really know nothing about it, somewhat obviously! 😂

I understand (I think!) you can get tax breaks if you're using your home as a workplace, but I'd assume you have to have 'things in place' otherwise everyone would be claiming for everything at home!

You can apply for an NI exemption if you earn under about £5k pa. But depending on your NI record, it might be worth paying voluntarily, as it counts towards your state pension.

The tax breaks for using your home as an office are minimal and you have to earn enough to pay tax to use them.

Worth reading all this stuff on the HMRC website, loads of good information there.

Thanks again, I'll do that.

I'm researching this for DS who is a uni student looking for extra cash.

I know he should be doing this but he needs a bit of support right now!

Yes as stated you can get a small earnings exemption for NI but worth paying anyway as it protects your pension.

Self assessment is really easy to complete yourself, if he is just looking to earn a bit of spare cash there really is no need to involve accountants.

Make sure to save receipts for any business expenses as these are tax deductible. And if you're likely to earn enough to start paying tax, put at least 20% of gross earnings away in a separate tax account.

Don't forget business insurance!

Really unlikely to need specific business insurance for this kind of work, presuming you won't have clients in your house. Worth checking that laptop etc is covered in contents insurance if used for business purposes.

What kind of thing does he want to do? If he makes a loss the tax can be deducted from other work where tax was paid so he'll get a refund the next year. Unless part of your home is exclusively for use by the business (dog groomer in a converted garage for example) it's a hard argument to claim part of the household bills or mortgage but broadband or your phone is easy to argue it was used 50% for work purposes or similar.

There are lots of fully funded and excellent business start up day or weekend training sessions out there at the moment, although it's EU funding so how long for I don't know.

If he/you don't have a particular business in mind check out youtube for ideas, Shimmy Morris is a good place to start as he's British and does Amazon FBA and also POD, both of which are genuine and reliable work from home options at just about any age.