[DLSheffield]

Hi everyone, i'm new here so please go easy!
I have an idea for a business which i've planned out as far as the services i'll offer etc. But having never done this before i'm not sure of the 'legal bit', so any help would be welcomed.
I plan to set up a website and work from home, i won't be selling goods and people will not need to come to my house, and i don't really see the income being very much to start off with. Would i need to register as self employed even though i am still in full time work? And would my house be classed as business premises, so then would i need any insurance etc?

[Indizine]

If you are running a businesses you are required by law to register within 3 months of your official start date. This would, I imagine, be as a sole trader status. You can do this in addition to your f/t job yes but consider your current salary and what profits the business will make, to determine if you will go over the higher tax threshold. Ideally an accountant would best advise you which business status would be best for you. It is also possible to declare 'other earned income' on a year end self assessment tax form, but this is suited to occasional consultancy work where expenses are nil or minimal and you are not actually running a business as such, but providing ad-hoc work like I say, occasionally here and there.

You can normally use your home to work from, as you say its just you and a computer so that presents no issues. Small print in your mortgage or landlord docs will often ask you to decalre if you use the property for businesses purposes. I would guess this isnt necessary for you, as you are not proposing to do anything that would cause a nuisance, be a liability to the property or the public, or be a nuisnace to neighbours.

Depending what business you run will depend what, if any, type of business-related insurance you need. Your houshold contents would normally cover you for basic stuff which you would also use personally, such as a desk with a computer but if you have a lot of decent, bespoke or expensive kit you should consider getting this adequately insured.

Professional indemnity may be needed - depends what you do. You are not employing anyone or having joe publicround the house so employer and public liability insurance is not necessary.

[ARK]

High mate, welcome to the forum. i was in your situation not so long ago

Once you start trading you should register as self employed within three months, it'sperfectly fine to do this while working full time. Do you predict you'll be making profits or losses in your first year of trading? if you're making losses you'll be able to claim some of that lovely tax back from your full time job.

Another thing to be aware of is that if you're working from home and you're chageing all the usual appotionment of household expenditure to your business, you could expose youself to a partial Capital Gains Tax Liability if you ever sold your house (if you're renting there'sno need to worry)

In terms of insurance you won't need public liability insurance and if you're not employing anyone you won't need employers insurance, however it may be worth looking at some sort of pofessional indemnity insurance

i hope that helps, feel free to ask me if you have any further questions

[DLSheffield]

Thanks for the replies, that helps a lot. So if i register as self emplyed after i've been trading for three months, but i am still working for my current employer will that mess up my taxes?
I've read my tenancy thoroughly, and it does say that it should be used as a residential address and nothing else, but as it will be me and the laptop, i will be using a PO Box for all business post too, so that shouldn't be a problem (I hope!).
Professional indemnity seems to be something i'll need to look into, cheers

[Jeewhizz]

As long as you don't have clients visiting the house, I don't think there's much your landlord can do. End of the day, it's as if you were working from home on the odd day for your current employer.

If you are still working for your employer, I don't believe it'll mess with your taxes, as you'll be filling in a self assessment form at the end of each tax year.

[Indizine]

yes, you dont have to declare your sideline work to your employer unless of course, you are moonlighting and your contract prevents you from doing certain work or that you are required (in some roles or industries) to declare other work you do. Just check that bit out and you will be fine.

[KeyMark Services]

Originally Posted by Jeewhizz

If you are still working for your employer, I don't believe it'll mess with your taxes, as you'll be filling in a self assessment form at the end of each tax year.

True to a point. It would all depend on your PAYE earnings and your business profit.

It could tip you into the 40% bracket if all goes well....one for the future (or you may be earning £60k now so consider it now )

[accountantpete]

Visit hmrc.gov.uk and pop BIM47825 into the search box-this will show you what you can claim when working from home-mortgage interest payments,rent,Council Tax bills etc.

Also you don't need a business bank account-so don't tell the bank that you are running a business if you can help it.

[KeyMark Services]

Originally Posted by accountantpete

Visit hmrc.gov.uk and pop BIM47825 into the search box-this will show you what you can claim when working from home-mortgage interest payments,rent,Council Tax bills etc.

Also you don't need a business bank account-so don't tell the bank that you are running a business if you can help it.

I have NEVER claimed any of these...can you re-claim back dated for three years or not? Been working from home for 4 years now similar to the last case scenario...I take it these are claimed against your co. profit...as a business overhead?

[accountantpete]

Yes you can put in an"errors" claim for up to 6 years bit ideally you should have a serarate and defined room to work in inorder to justify the claim.The Revenue have now clarified that there are no CGT implications to claiming these expenses.Contact me if you want more precise info