thinking of going self employed.. help with tax and NI??

[lilsmum]

hi, i have recently given up my part time job, and i am a qualified hairdresser and i am seriously thinking of doing mobile hairdressing after xmas. the thing is i will need to outlay quite alot for equiptment etc and was wondering if there was any way i could claim this back through tax??or is there any schemes to help with the cost of starting a new business? i have bad credit history so i couldnt just go and get a loan from anywhere. also what else could i claim back through tax? any ideas? also does anyone know the amount you can earn before having to pay tax? and what is the score with NI ?as you can prob tell i have no idea about any of this!! and really need some advice!!

i think there are certain things you can claim back in your first year of a business - i have a couple of barrister friends and remember them discussing buying laptops in their first year as they could write it off against tax. you would have to pay NI if self-employed.

sorry don't know any of the detail on this. I think the personal allowance tax free is somewhere in the region of £4K a year these days - guess the Inland Revenue website would be the starting point

Your local branch of the DWP can advise you on how to contact NICO regarding your 2nd Class NI contributions and IREC at your local IR office can advise you on what you can and cannot claim tax relief on.

It all depends how you set yourself up. I would guess that you would operate as a sole trader which makes you self-employed, so as far as tax goes you fill everything in on a tax return, including all expenses, costs etc and what income you had, and it gets worked out from there. DH and I have set up this year but as a limited company so it's a bit different.

Talk to your local business link and have a look at their \link{http://www.businesslink.gov.uk/bdotg/action/home\website}. They have loads of info about getting started on there and they do a good print publication which you can send off for. If you go and see them they will talk you through getting finance and support.

Lilsmum you do have to notify the tax office when you go self employed, or there can be a fine to pay. So make sure you let them know when you start!

If you ask a small business advisor will come to your house and talk it over with you. You can also go on 'business start up courses' (usually run by Business link - I think)

The tax office are not out to trick you

About claiming back...

If you make £7000 and you spent £3000 making that - called "Cost of sales" then your net profit is £4000 so - no tax to pay

Cost of sales could be hairdryers, shampoo,etc not necessarily the cost of a car but 40p a mile (whilst on business) the tax office can really advise you better

Good Luck - I did it 20 months ago and haven't regreted it..childminding tho' not hairdressing

Not read other posts so sorry if I'm repeating.

You can offset your outgoings against what you earn so all you would do is keep a record of what you spend on supplies, advertising etc, minus it from your income from the business and there's your profit.

You have to register as self-employed with the IR so they know to send you a tax return.

Tax returns are really easy to do if you just have the one business with simple outgoings and income and you earn under around £15K per year.

I pay NI because it means you are still entitled to your state pension (HA!) and maternity allowance should you need it (probably other things too but these are the only ones that apply to me).

I know it's daunting at first but it's honestly very simple once you get set up.

Good luck!!

Get yourself an accountant straight away and they'll do all the tax forms for you! you'll just have to sign em! don't forget to claim your change in tax credits.