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Question for full time uk marketers

by Ian Jackson
9 replies
Hi.

I'm expecting to be made redundant from my PAYE job in a couple of months and am pondering the simplest way of being full-time and self-employed, online.

As IM-ers in one way, shape or form, are you operating as a limited company, or sole trader, for instance? How does HMRC recognise you?
#full #marketers #question #time
  • Profile picture of the author James Turner
    Ian,

    How you structure your business will depend very
    much upon your own personal circumstances.

    Before making any long lasting decisions I would
    find yourself an accountant who understands what
    Internet Marketing involves and who will explain the
    tax and accounting options open to you.

    James
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    • Profile picture of the author Neil Morgan
      Hello Ian

      A business is a business. Whether it's online or not doesn't matter a jot when it comes to tax etc.

      So the only advice that's worth listening to on a public forum is that you should seek professional advice.

      Cheers,

      Neil
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  • Profile picture of the author rajsidhux
    I would start off as a sole trader and only when I reach the income level (not sure exactly what it is) that I would be required to register for tax would I then consult an accountant and get things more professionally organised. Lets face it, if you can get to that level then you would be well on your way.
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    There are no secrets or magic formulas to achieving on line success.... only things you don't know how to do...... YET!
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    • Profile picture of the author Peter Burke
      Hi Ian

      I'm sorry to hear about the upcoming redundancy. I know what it feels like.

      The advice so far given here is sound. You will need to get an accountant.

      I don't know your personal circumstances but from my own experience I already had a limited, VAT registered company.

      The one thing that I found in starting is that any money earned on 'personal' account, depending on other sources of income is subject up to 40% tax and that it was much more difficult to claim expenses back. Corporation tax works out at much less and you can take 'drawings' out as and when you need to (remember you will also need to pay tax on personal drawings as well).

      What I did when starting out was use my company and use it only for I.M. and set expenses against it (an accountant will be able to categorise which costs can be deducted etc) - such things as server costs, home office space - all sorts of deductions that an accountant can help you claim.

      The thing is here in the U.K. if you make any money outside of a salaried job you have self assessment and that my friend is a right pain and will still involves accountant fees etc.

      Any money that I earned outside of I.M. I put through my personal account. This way I was able to quantify what my efforts were worth.

      The idea is to 'ween' yourself off gradually from the personal/sole trader side as soon as possible.

      The downside of having a company is all the paperwork but I think it's worth it - as Neil and James have said get advice first. You know your own personal circumstances best!

      Good luck


      Regards



      Peter
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      • Profile picture of the author Ian Jackson
        Thanks guys
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        • Profile picture of the author Neil Morgan
          I would start off as a sole trader and only when I reach the income level (not sure exactly what it is) that I would be required to register for tax would I then consult an accountant.
          That amount is £0.00.

          Get advice now.

          Cheers,

          Neil
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  • Profile picture of the author Steadyon
    If you sell anything at all where there could be a potential risk or liability, you should seriously consider forming a Limited Company.

    If you offer advice, a costly service, anything to do with medicine, the body, health or anything at all where there could be injusry or anything even remotely similar you should form a company.

    This offers more protection to you. Basically the concept is Limited Liability.

    This protection is voided if you are doing anything illegal or are grossly negligent.

    So in 99.9% of cases you are better protected and if your business fails, or you inadvertently do something that was beyond your control you won't lose your house etc...

    This is not personal advice. Read up on it and see an accountant. Most will give you a free half hour initial meeting if they think you may become a client eventually.

    Best wishes.
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    • Profile picture of the author Jenni Mac
      Inland Revenue do some great workshops to help out anyone who is becoming self-employed, so I would highly recommend you go along to one of them and ask the people who know.

      You must register for National Insurance before your first 3 months trading are gone or you're liable for a fine, but I would urge you to go and see them and talk to them and get on one of their free workships.

      They're really very friendly and helpful if you play by their rules...

      speaking of which, I have to get my tax-return done and filed into the system by 31 Jan! :p
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  • Profile picture of the author Tim Dixon
    As you're being made redundant do your current company not offer you some form of consultation to help you find a new job or go self-employed?

    Not sure if it is actually a formal requirement but I know a lot of companies do provide that sort of service (free of charge) to 'displaced' employees.

    Tim
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