Can Anyone Advise On Starting A UK Business Please?

[IMstudier]

Hi. I have been IMing for just over a year now. I also work a full-time job.

However, my income has increased to the point where I really need to register a company and pay taxes.

The thing is, I don't know what type of company it should be, or should I be a sole trader? I earn CB revenue from my ebook and also some from Amazon affiliate and Adsense.

If anyone has been through this already, can they please advise me?

What costs are involved?
What type of company?
When I go to register, can I say that I am starting from that date. I mean, do they go looking for earnings prior to registration? I probabaly should have done this a while ago but didn't.

Is there perhaps a book on the subject you could recommend?

Any help would be greatly appreciated.

[onlinemoney00]

You can register as a sole proprietor or Limited company depending on your earning threshhold. Just pop in to your local bank or accountant for advice, you shouldn't have any problems. Many accountants offer free consultation.

[Andyhenry]

Go here and read about it for yourself - call them if you need more guidance: HM Revenue & Customs: Businesses & Corporations

Starting a company isn't a big deal - I do it regularly when I have a project which looks like it could go big.

[IMstudier]

Thanks guys. I'll read those links and I'll see if I can make an oppointment with a local accountant.

I wonder though if you know about what happens to my earnings prior to setting up. If I don't mention them, do I only start paying tax from the startup date? I don't like the thought of having a huge back-tax bill.

Thanks again.

[Peter Bestel]

There's a ton of info available if you just Google it, but you're probably better off talking to someone so they can assess and advise to your choices and probable best course of action.

Use Andy's link for HM Customs if you're in Northern Ireland and go here if you're southern:

Revenue - Irish Tax & Customs

I wouldn't tend to go to a bank for this kind of advice, an accountant maybe, but not a bank.

Peter

[Peter Bestel]

ALL earnings are taxable, sorry!

You will, however, be able to offset any start-up costs that you incurred before you registered. I've forgotten how far you can go back but it's probably around six months.

Talk to an accountant - I'm not one and most people on here aren't either.

Peter

[IMstudier]

Cheers, thanks for the advice

[digileaf]

There are many good reasons to go for a ltd company, and most people will advise you to go down that route.

I was an accountant but am so out of touch with small company tax bands and how they compare to sole traders, that I don't want to offer advice in that direction. Also, your individual circumstances will have a bearing on which is the most efficient route tax wise.

My words of caution against a separate company are to do with red tape. You have to have 2 directors or director plus a company secretary. You have to submit annual returns to Companies House - not onerous but it's an extra task. And you'll need to set up a separate bank account for the company as it is a separate legal entity. It's easier to set up a business bank account for an individual with your existing bank, than it is to set up an account for a company.

None of these are reasons to choose sole trader over ltd company. They are just parts of the process to be aware of. Either way, you'll need to keep records and produce accounts. But doing so is a great way to keep in touch with where your business is going and deduct some expenses form your earnings to reduce any tax payable.

[johnng]

Originally Posted by IMstudier

Hi. I have been IMing for just over a year now. I also work a full-time job.

However, my income has increased to the point where I really need to register a company and pay taxes.

The thing is, I don't know what type of company it should be, or should I be a sole trader? I earn CB revenue from my ebook and also some from Amazon affiliate and Adsense.

If anyone has been through this already, can they please advise me?

What costs are involved?
What type of company?
When I go to register, can I say that I am starting from that date. I mean, do they go looking for earnings prior to registration? I probabaly should have done this a while ago but didn't.

Is there perhaps a book on the subject you could recommend?

Any help would be greatly appreciated.

This is from my own experience and should not be taken as professional advice.
First your earning in total is what the Inland revenue interested in. You are obliged to pay tax as soon your income exceeds certain value regardless when you started or registered as your business. As soon as the Inland Revenue or Tax Inspectors think your back tax is worthy of their effort, you might suddenly get a request to interview. Not good! So be prepared your book and reserve from your earnings for the unexpected.
You can register as a limited company for used to be about £100. The red tape and accountant fee each year will run into probably £1000 at least for things like Account Auditing and preparing account for the Inland Revenue. The upside, your liability is limited to your registered capital in case you are sued for millions. Your house might be protected if in such calamity.
The alternative is to be registered as a partnership or Sole Trader. You still need to present your account each year to declare your earnings and to work out what tax you will have to pay. Sage do a Accounting Package fairly cheaply and very easy to use. Year end is quite a headache. That is the period when most earners need to return their Tax Form. As a sole trader, if you have helpers you will have to prepare PAYE (P60) for each Employee whether Part Time and Full Time, and need to prepare P45 when they leave. Sage package has function for that.
It is just an outline of what is involved, by no mean quarantee to be up to date. It should only be used as a starting point of your likely to be a Business Empire.
Good Luck!
John Ng

[IMstudier]

@digileaf & johnng - thanks for your help. Sounds like a right headache but it has to be done!