Setting up a business!

[cheezandbeanz]

Hi everyone!

My husband is employed full time but is setting up a side business. Likely to be very small initially probably bringing in less than £1000 a month gross and perhaps £500-600 net profit.

His target audience is businesses so does he need to be VAT registered? We aren't sure what we need to do or how much tax he will pay and it's a complete minefield.

He has his website and business cards ready to go but we want to do it properly so any advice is welcome!

Thanks so much

My knowledge from reading is that you only need to be VAT registered if earning over £85k per year? Someone please correct me if this is wrong of course.

@davidcox thank you! Anyone else?

I don’t think so - he can just be a sole trader.

You can look up some trader vs VAT reg, and/or ask an accountant if you think the business will scale up quite quickly.

If he is just dealing with VAT registered businesses then it may be beneficial for him to become VAT registered himself, but an accountant is best placed to answer that.
He needs to register as self employed with HMRC and fill in an annual tax return. His earnings will be added on to his employee earnings for tax, so whichever bracket he falls into earnings wise will dictate how much tax he pays. NI is different. He can earn circa £6500 before he pays any NI. It is worth looking up self employed NI to get the exact figures but it will all be calculated on his tax return.

Does he have a business plan?

it's a complete minefield.
Not really. Get advice from an accountant on how to structure it properly.
Advice before you do anything is ten times cheaper than them trying to undo mistakes after you have made them.