I have been having some good sales through my wee online shops over the last week or so, and with the vein hope that I can keep it up I started to look at the information about registering as self-employed... and good lord....
Now, am I right in thinking I have to pay national insurance contributions? even though at the moment my NI contributions are covered as I have a young child at home?
it works out at £2.30 a week it seems and considering that this has been the only week ever that I have made more than a few pounds (and most weeks I have had no sales at all) I am thinking this is all too much hassle and I'll go back to being dependent and feeling sorry for myself because I have no financial self-worth.
I am very unlikely to make more than a few hundred pounds a year and I thought I could do it all quite easily above board because I thought that you didn't NEED to pay anything until you earned over £5000 - I remember there were voluntary NI contributions in the 90's, when I ran my own business before... but I seem to have forgotten most things about it.
Any help? Anyone...... nudge, nudge Zoe
Ann Pan
"Some days you're the dog,
some days you're the lamp-post"
i wouldn't worry about NI contribs. or becoming 'self employed' . keep records.. including the costs of your materials, including receipts, any sales. frankly i would not stress about it otherwise until you are making serious money. ie more than your tax allowance. just keep the paperwork.
Red
I like like minded people... a bit like minded anyway.. well people with bits of their minds that are like the bits of my mind that I like...
i am regestered as self employed and have been told to opt out of my ni pay ments as i wont earn enouigh to neeed to pay them
(i only regestered as a tax dodge to do wityh the wife being self employed according to the accountant we will be quids in )
Well, see, the DWP website http://www.businesslink.gov.uk/bdotg/ac ... c=en&r.s=l says you need to register within 3 months of becoming 'self-employed' now, what I don't know is that when does a hobby become being self-employed?
Getting really negative about the whole thing now, and having flash backs to when I did it all before (OK, it isn't going to get that big again, but it wasn't a pleasant experience)
Ann Pan
"Some days you're the dog,
some days you're the lamp-post"
OK, so putting on my scary and probably out of date Tax Inspector head on, I would recommend you do this.
Firstly, you can claim small income exemption from NI contributions. You need to fill in a form (of course). Just phone them up with your NI number to ask for the form and it's as easy as that.
You should register your business for tax, no matter how small. You can't just decide your income is below the threshold yourself. Just keep a very basic record on incomings and outgoings, and you need only fill in three lines on the self employed pages and the usual straightforward ones on the main return - just gross income, expenses and then the net figure. You will almost certainly be exempt from tax but if you are receiving benefits some of them reduce your tax free allowances. The good thing about doing this is that if you make a LOSS you can carry it forward just on the offchance you start making profits later and offset it.
If the worst comes to it and you aren't sure of how to fill in the form, just pop into your local Enquiry Centre with your figures. They really don't bite!
Edited to add that a hobby becomes a business at the point you start selling/making items with the intention of making a profit. Intention is the operative word!
Well, in that case, I guess selling online is intention.
There are some super-duper, very helpful business network launch people in Glasgow... I'll pop in the next time I am there to get it altogether.
I just started keeping 'accounts' at the weekend and before then I had only made a handful of items (mostly just playing about with wool) and listed them on the off chance... but I am taking it more seriously now so I would say that is my business started now.
Oooooh get me, I have a business
Ann Pan
"Some days you're the dog,
some days you're the lamp-post"
OH is partly self-employed and has to pay NI contributions on both his 'official' job and his self employed earnings, I have a feeling it goes on how much you earn, it might be worth taking advice so as not to fall foul of the law
it basically boils down to doing a tax return at the end of the year.. which is why i said just keep everythin for now, see if you make any money.
re NI contribs.. at this stage it seems unlikely you will hit the threshold.. and as I have said, you get a holiday from having to pay NI whilst raising a child.
if you dont approach using up your tax free allowance, then no problem, but what I do is put 20% away of all income, saved up for tax. then when I do my tax return, the money is there to pay, instead of a nasty bill. usually, because of the tax free allowance, I dont need it all, so its a bonus way of saving.
Red
I like like minded people... a bit like minded anyway.. well people with bits of their minds that are like the bits of my mind that I like...
Applying fpr NI exemption is really easy... I have don it for over 20 years as a childminder... initally they ask to see your first years books, well they did then to see how much you actually make and as I am classed as a low income earner I get exempt. Re apply every two years same procedure and thats fine.
Note its how much you make not your income... after all your expenses are taken out what are you left with ...
Given that you have written publicly about your intention to make a profit with this venture, you must register with the Tax Office.
You have been given this advice by an ex Tax inspector.
I was an accountant in practice for 10 years before I ran the food business, and I would suggest that having come this far, not to act may land you in bother.
Voluntary National Insurance, Class 6???? is the old"stamp" paid by Fishermen and farmers whose income often fluctuated, and would still want to claim benefits etc. You can do this, it's about £25 a month, but you don't have to.
You need to make a profit of over £8k ish, to pay "normal" self employed national insurance.
I would be surprised if you will make a profit though.
Think about the cost of your PC to trade from, your set up costs for web Sites, the desk and chair you sit at, the machine you bought to stitch ( all these "capital" items you can claim 25% of the value every year ( on a reducing balance basis) against your income. Think about all the materials you have bought, the light you work by, the petrol to pick up your material, the phone calls you make to arrange collection. You can go further and claim part of your council tax for an office, you can claim for printers, ink, paper, ads, basically anything incurred wholly and exclusively in connection with the business.
So my advice would be to delete all reference to this thread, get the men in black to mind zap all who have read it, and do yourself a favor next time and follow the advice given above, i.e. pretend that you don't think you will make a profit, keep records, and at the end of the year, if you by some chance of fate have made a profit, then tell the tax man...................
With the tax man it is all really black and white, it's when you say publicly that you think you want to make a profit, there you are, you must register. Now that cover is blown you have little chance, remember "BIGBrother(Bot)" is watching you!!!
On a similar note, I was at a meeting with a Councillor of all things, in my capacity as a Treasurer of a local learning centre, and he was telling me that someone had complained to the council about him selling stuff from his Gate, which is highly amusing in itself I thought(Tory! ha!) but he was very assured that this would not be an issue, as you may well not be able to retail from a domestic property or on the roadside, but you have an inalienable right to sell any "surplus" you may have. Provided no one causes a problem on the highway by stopping. I thought it may interest a few of you that always feel guilty about selling any surplus, well it would appear from this you are doing nothing wrong. Please note I did not say I did this, as I would never do such a thing, and write it down!
Millymollymandy wrote:Bloody smilies, always being used. I hate them and they should be banned.
No I won't use a smiley because I've decided to turn into Boboff, as he's turned all nice all of a sudden. Grumble grumble.
Wow Boboff, you must have stopped being an accountant even before I stopped being a Tax Inspector! I think Capital Allowances has been more complex than a straight 25% for ages and now Capital items are mostly written off in the first year. No matter, that's why I always preface any ideas I put forward on the dreaded tax front, I know that sometimes out of date info is worse than no info at all. Fortunately I stopped thinking "Tax Inspector" the day I left so I can manage to look at both sides of the fence these days!
Annpan, don't worry. If you do your sums of takings less basic costs of materials (and all the general ancilliaries you can think of) and you still come up with a plus figure you can start looking at the other deductions you would be entitled to, especially using your home. If you have no other taxable income you can come up with a taxable figure of around £6000 before they will ask you for tax anyway.
The requirement to notify within 3 months of starting to trade is new since I was in the thick of things and speaking to an ex-colleague I understand that although fines are mentioned on the paperwork the idea is just to get you into the system and they wouldn't normally be enforced unless by NOT notifying them you don't pay tak when it's due.
I don't think you will have a lot to worry about, just a very short bit of the return to fill in and a claim for small income exemption for NIC and you should be set. PM me if you like and I'll set out what you are likely to be able to claim for. Actually I have a spreadsheet which does totals and does all the work for you with a summary which I invented for my son's business. He seems to do fine with that and it's adaptable enough to cover most little businesses. I can send you a copy of that. If things take off it would be nice to have some losses up your sleeve to set against your profits one day!
Yikes Boboff, I am not running from Big Brother, I am not planning on deleting the thread, I don't think that the bogey man is going to turn up on my doorstep to reposes my house, cause I missed £2.40 of NI contributions.
I used to run my own business, I had no problem dealing with the tax people and there are plenty of free business start-up help available. I don't want to hide from them.
I was thrown by the NI because it appeared that you have to pay it no matter what... I now know differently.
When I did it before I got a grant, (which was actually a loan) and a business bank account which charged me £30 for (what seemed like) every transaction. I got some really bad advice concerning loans, bills and banking... but tax and NI I was fine with.
That was 10 years ago though, I have only just finished paying it all off - I lost my home, my work and my friends, and most of my family weren't around to catch me from my fall... I am not going down that same route. I don't mind filling in my forms at the end of the year, and only making £5, but I don't want to end up out of pocket because I have to pay taxes I am currently exempt from.
Anyways, thanks for your help everyone! I will go and speak to a business start-up person in Glasgow. I registered on-line with something this morning, so I am now on the system.
Ann Pan
"Some days you're the dog,
some days you're the lamp-post"
I'm glad Annpan started this thread - I'm in a similar, although slightly different position...
Having been unemployed now for over 6 months, and still not getting any benefits - but lots of grief from *** Jobcentre staff who tell me that after all, they are paying my stamp, so I should shut up "and keep to my agreement" (which means contacting 6 employers every fortnight, never mind that there aren't really 6 employers around who'd employ me with my qualifications, and never mind that I spend more time per week on researching/searching/preparing applications/preparing interviews/networking... than a person on the normal 37 hours/week) - well, if "the stamp" is only £2.50 per week, I'd actually be better off, financially, if I paid it myself and saved myself the trips to the Jobcentre and the nerve wracking hassle they give me!
The only problem is - I'm currently also trying to get housing benefit. Does anybody know - if I pay my own contributions, will I then be exempt from all benefits? (Mind you, it might still work out better - I can get some casual work, which at the moment I can't afford to take up, because it would affect my benefits - if and when they decide to pay them...)
Sorry for loading these questions on you - but I've not been feeling too well recently, and just don't have the strength to go to the officials with it. I'm afraid that if they keep treating me like a toddler (which most of the staff at the Jobcentre do), this toddler may just revert to type and throw a tantrum.
*** insert swearie word of choice!
Ina
I'm a size 10, really; I wear a 20 for comfort. (Gina Yashere)
)
