New Business - where to start??

[Steve2009]

Tweet

Hi,

I have been advised by HMRC to register as a new business because I am paying costs into my business whilst I'm still employed. She was really helpful but numbers is not my strongest point! She spoke about me registering and then tracking my business expenses even to show I'm running at a loss initally, which will then go towards what tx I pay when in profit. This all made sense...

but where do I start, what in the world do I need to be filling in to track basic small expenses??? Also I know I should be keeping all my receipts for anything I purchase but again how???

I cannot afford an accountant at this early stage but I think I need one

Thanks for looking, your advise is really appreciated
Steve

[babrees]

I would think that for the amount you would probably have to record you could just do it in a simple excel sheet. Get yourself a lever-arch file to keep all your receipts and invoices in. Keep them in some sort of order, whether it's by subject (ie domains/hosting, stationery, etc.) or by method of payment (credit card, cash, bank). Then just keep a record of them by listing them in an excell sheet. Include column's for date, purchaser/customer, amount in, amount out, what it was for.

[dc000000]

The lever arch file is yet to be beaten by any technology

[Steve2009]

Thanks guys,

I think I need to look for some kind of free software though that will record all this for me as I'm not great will exel let alone numbers arghh!

She told me I need to record my profit and loss, but I'm not sure whether this is the first step?

Lever arch sounds great for reciepts so will go ahead with this one!

Steve

[thesaintv12]

Hi Steve,

I bought the book 'Small Business Accounting' when I started. It is very simple with very simple examples. You can read it in a couple of days. I am a year and a half into my business and it has been all I needed. It teaches you how to break stuff down so you end up with easy to add up columns. At the end of the year you just use the totals to fill out your tax return (assuming you are a sole trader?). If you go this route then I'd be happy to send you over the Excel sheet I use (my own design and VERY basic).

The only trouble I have is getting the time to fill it out every month (my xmas break job is to catch up).

Cheers

Graham

[jhulott]

Go to your bank. Most have business startup guides and some have free software and temaples. I think Lloyds TSB and Natwest did anyway. Even if you end up not banking with them you will get some good advice.

Good luck...

Jason

[Steve2009]

Thanks guys. The bank sounds like a good idea, I forgot they sometimes have business start-up packs! Might have something I can use to record my payments etc?

[Mogga]

Did she mean start a ltd company?
I'd speak to an accountant for advice about all you need to do.

[Steve2009]

Did she mean start a ltd company?
I'd speak to an accountant for advice about all you need to do.

Not sure about the ins and outs of becoming a ltd yet??

I do need to speak to an accountant, although I don't think that is a possibility as I'm worried it will cost too much at this stage?

Steve

[babrees]

you do NOT need to be a ltd company - do not go down that road, at least not yet!!

[Mogga]

Not sure about the ins and outs of becoming a ltd yet??

I do need to speak to an accountant, although I don't think that is a possibility as I'm worried it will cost too much at this stage?

Steve

As I understand it if you stay as s/e then you can not "start a new business" as your earnings are still yours...
I think you need a ltd company - a good one will talk you through the ins and outs and help with the setting up of a limited company for you too. It needn't cost a fortune - BUT speak to an accountant for advice.

Have you registered as self employed? Is that what she meant?
You should still speak to an accountant about it for some advice.

http://tips.hrbs.biz/
Keith's site has some hints and tips.

PLUS from that url: _ Contact us for a free, no obligation chat.
To find out more about what we can offer to you and your business, feel free to visit our main site at HRBS.biz, contact us by email or if you can spare 5 or 10 minutes, give me a call

[babrees]

In my experience (I have setup a few businesses over the last 30 years and currently have a ltd company) all that is meant is that you keep records of your income and outgoings, so that basically you can prove whether or not you are required to pay tax.

You certainly do NOT need to set up a ltd company and I would recommend that you do NOT go down that road - there really is no need for it and if you are struggling to set up a simple income and outgoing book then you will certainly struggle with the record keeping and returns that have to be made when limited. Plus accountant fees are a lot higher for a limited company too.

The business hubby and I had before the limited company we now have - all hubby did was to send hmrc an email to say he was setting up this business. Then at the end of each year file a tax return.

[Tricky1]

Ring up a local accountant and explain your situation and just have a chat to them, most are very approachable and will understand that you are not in a position to pay them at moment. Every accountant that I have used in 25 years of being self employed would be happy to give you 30 mins of their time. It's in their interest to build up a professional relationship with yourself because they know that once you are up and running you are unlikely to go elsewhere, unless they really mess up...

You do not need a Ltd company

[acropora]

I set up a small ecommerce store recently and can assure you that you do not need to form a Ltd company unless you decide your circumstances warrant it. For me, operating as a sole trader was a lot simpler and meant I didn't have to pay expensive accountant fees.

You do need to inform the Inland Revenue (as I understand you have done). There is no problem registering an additional employment to your existing main full time job.

You will have to pay class I and II National Insurance on this additonal job. However (I get these muddled up), if your earnings from the addtional work will be less than a cetain amount (5k I think), you can apply for exemption from NI class II.

NI class I is collected when you file your self assessment online at year end.



Cheers

Acropora

[hrbs]

but where do I start, what in the world do I need to be filling in to track basic small expenses??? Also I know I should be keeping all my receipts for anything I purchase but again how???

I cannot afford an accountant at this early stage but I think I need one

Thanks for looking, your advise is really appreciated
Steve

Hi Steve

I have written several guides on starting up in business and tax deductible expenses etc at tips.HRBS.biz . I would strongly recommend opening a bank account for your business use as it keeps your personal and business transactions separate, making book-keeping much easier.

Book-keeping:
I have designed a google spreadsheet which is easy to use and specifically set up for affiliate marketing businesses. PM or email me via my website and I'll send the link.

NIC/Tax:
As you also have fulltime employment you may be able to defer your class 2 and class 4 NIC bills, depending upon your income from employment. Classes 2 and 4 are the NIC types that apply to the self employed, class 1 applies to employment.

If you are making a loss in the first year you should be able to offset it against your income and get a tax refund. You can also apply for Small Earnings Exception from class 2 NIC if your expected profit is below the threshold (currently £5,075). HMRC have more information on Class 2 NIC at HM Revenue & Customs: Class 2 National Insurance contributions .

If you are making a profit, it is added onto your other income and depending upon your total income you may pay higher rate tax as well as class 4 NIC.

As to whether you need an accountant, if you have time to keep up to date with tax and in particular, VAT rules and how they apply to affiliate marketing, then maybe not. I have a regular stream of new clients who, because they did not take advice earlier, were late in registering for VAT thereby incurring penalties for late registration.

Limited companies:
A limited company is quite a useful way of reducing your personal tax and NIC bill if you have a profitable business and a fulltime job. However you would need to take advice from an accountant who would take into account your personal circumstances and plans for your business.

A limited company helps the owner control their personal income which may come in useful when the proposed changes in the child benefit and child tax credit rules are introduced.

Good luck with the business!

Regards

Keith