Tax

[Mugshots]

Whats the situation with a new business and paying tax. Do we get any "free" time at all? I got told 1st 12 months but read 1st 3?? Anyone clear this up for me please?

[pisquee]

Are you a Ltd company or a sole trader?
Either way, I'd recommend finding a good local accountant (get word of mouth recommendations) and have a chat with them - best to start off everything properly to save you headaches in the future - I mean properly both in terms of legalities, but also your own systems of keeping records, cash flow, forecasting, accounting etc - If your business grows if you've started off with a good system, then you'll save yourself the nightmare of trying to get something big into a system.

[Mugshots]

Sorry. Sole trader. Been going a month but as you say I want to do everything correct and above board. I still have a full time job working 4 on 4 off permanent nights so enough time for the business. Do you know if the tax I pay with my job has any effect on what I will pay as a business? Also are there any good programmes out there to input records and cash flow etc into.

Also we receive working families tax credit every month. Will a second income effect this?

[GoonerGary]

You have to register your extra self employed income within 3 months of your first sale. Just record all your sales in excel/ libre office calc and keep all of your receipts. You don't need big complicated software packages. yes your new income will effect your tax credits. When you do your tax return you might have to pay all of your benefits back for that tax year. You would need to read up on how much you can earn.

[arthur.daley]

Hi

One small detail that could prove very useful to you.

If you lose money on the new business - which you probably will as you are a start up and have equipment to purchase, any loses your business makes can be offset against your PAYE. Your employer doesn't have to do anything, its all dealt with on YOUR tax return. You show the loss on the return (ie you will have no tax to pay as you haven't made a profit) and that will generate a rebate of PAYE directly to you. Any half decent accountant will know about this - its just a matter of finding a half decent accountant that won't charge you a fortune.

That said its not so difficult to do your own books for a small business especially if you are turning over less than say 10k. Personally I have always found HMRC to be very helpful and have turned up at the local office armed with all of my paperwork and they have helped me get it all sorted. A lot of the problems people seem to have with tax returns is terminology and that the return is designed to be used by people who know exactly what they are doing. I don't believe for one second that it was ever beta tested on Joe Public!

Arthur

[pisquee]

If you can find a good accounts who also specialises in tax credits, then it will be very beneficial.
our business has grown to the point that trying to use Excel for our accounts, VAT returns, client payment tracking, and staff wages is getting silly, and so are moving over to Sage, which is a huge pain getting set up, and wish we'd used it from the start so it would have grown with us.

[calvinabc]

echo pisquee. i do all my own vat. but my accountants do tax returns and skim over VAT once a year. buy yourself a cash book. and make sure you use your business card for all purchases. your accountants can use your bank statements to sort everything. i pay mine(accountants) monthly as to not have a big bill at the end. we are also on sage accounts but have just transferred from worldpay. so yet to have full benefit of sage.

[logobear]

Hi Mugshots,
you questionis one about business as oppose to 'sublimation' or mug/tshirt printing.
As mentioned above, it is really impostant that you set up your business on a solid base so it can expand if required, and doesn't get you in trouble.
There may be a local business course you can go on, and having someone who understands books etc is vital if you don't grasp them yourselves.
Ask friends who have their own business who they recommend, and do a lot of reading up so you grasp the relevant points.
making mugs is easy. running a sustainable business is the tricky bit!
good luck

[mrs maggot]

a few years ago i went for a free day session with our local HMRC i cannot find details of it now, but i am sure i put it up on here, so will have a trawl through completly agree with logo on this, get it right the first time, then as you grow you will not have to think OH SH*T look at all this paperwork. if you cannot have a business account, then as others have said, get yourself a separate credit card, and use that for everything, a £2.20 parcel, a £1200 suppliers order, every thing, makes it much easier to keep control, when you get money in from your sales, pay them in at the end of the month to that account to pay off the bill, and whatever is left over, put into a separate account, perhaps a building society one, do not cross home and business over ever - as its a bugger to untangle

[mrs maggot]

pop onto here, and have a look, they do webseminars now, and also you can watch some video's http://www.hmrc.gov.uk/courses/SYOB3/sy ... _menu.html