When does a business become a business?? please help

[anonymous-user]

Ok, Basically I am looking to start an IT company on the side for some Extra income.

Nothing spectacular just a local handy man IT kind of thing. 'No call out charge (locally), No fix no fee', which I will work on evenings and weekends. Would also like to do IT solutions for small surrounding companies.

1) When does a company become a company? Surely I cant just make a web site and stick up posters etc. With regards to Tax do I just declare it at the end of the year (like on my P60?)

2) Is 25 pound an hour reasonable for a local home support kind

I will hold my hands up and say i know nothing about running business's etc so any advice would be appreciated

Cheers kev

[Paul.B]

Just start! It really is that simple. You will need to declare any income but that can be done in a tax return. You can notify the tax man you are running a small business and he will send you a tax return once a year. To be honest if you find you get none or very little work in and decide to stop I wouldn't even bother declaring it. But if you get a decent trickle of work you can declare in on the TR and pay the tax (don't forget to offset business expences so you only get taxed on the profit!)

I would just start and seek advice as you go along, there are plenty of willing contributers on here. You may want to consider some kind of insurance though in case you delete someones vital business records and sue you for millions

Good luck and go for it.

Paul.B

[Paul.B]

Just start! It really is that simple. You will need to declare any income but that can be done in a tax return. You can notify the tax man you are running a small business and he will send you a tax return once a year. To be honest if you find you get none or very little work in and decide to stop I wouldn't even bother declaring it. But if you get a decent trickle of work you can declare in on the TR and pay the tax (don't forget to offset business expences so you only get taxed on the profit!)

I would just start and seek advice as you go along, there are plenty of willing contributers on here. You may want to consider some kind of insurance though in case you delete someones vital business records and sue you for millions

Good luck and go for it.

Paul.B

[deckster]

WHS. Becoming a sole trader is trivially easy - just, as you say, stick up a website and a few posters and away you go. You need to tell HMRC within three months of starting to trade but there is practically nothing in terms of day-to-day administration that you need to do. HMRC will send you a load of information when you tell them you are starting up anyway.

Actually starting a company (incorporating) is an entirely different matter with lots of paperwork and formalities that you have to go through - but you really don't need to do do this

[anonymous-user]

Ok well im going to knock up some business cards and a few posters, budget around 50-100 quid as i can make the website myself.

Im just wondering price wise if 25 pound an hour is a fair price?

[Eric Mc]

Once you notify the Revenue that you have started trading, they will assume that you are liable to pay the self-employed Class 2 National Insurance contributions. These are fairly low and are set at £2.30 per week. They will ask you to pay these either monthly by Direct Debit or quaerterly by cheque.

WARNING - you may not be liable for this NI charge but you must APPLY to the Revenue to STOP them trying to collect it from you.

There are two reasons why you may not have to pay Class 2 NI -

you are already paying the maximum Class 1 NI as an employee

your self employed profits for the tax year are below the lower earnings threshold i.e £4,825 for 2008/09.

I reckon you would be eligible for exemption on the second basis.

[ShadownINja]

kevr6 said:

Im just wondering price wise if 25 pound an hour is a fair price?

I think it is. You don't want to charge nearer the £50 as some smaller IT firms who offer similar things to you to businesses and are well-established charge this sort of fee. Plus you're targeting families who may be struggling with the current economic climate.

[IanMorewood]

Start and keep a record of all expenses/income. Tell the tax man within 3 months that youve started a business and he will send you a tax return form which you can either fill in or have done by an accountant.

Hourly rate depends on what your competitors are charging, if there at £20ph with a £50 call out charge your in the ball park.

[anonymous-user]

Cheers guys

Hopefully there is a market for this

[mcflurry]

I used to work for an agency who charged £45 per hour + VAT
£25 seems too cheap IMHO, but good luck

[anonymous-user]

mcflurry said:

I used to work for an agency who charged £45 per hour + VAT
£25 seems too cheap IMHO, but good luck

I want to get the work though

Any Ideas where would be a good place to advertise?

[Deluded]

Curious, when you say "tell the tax man" does this simply mean registering as self employed on the IR website?

[Holst]

kevr6 said:

mcflurry said:

I used to work for an agency who charged £45 per hour + VAT
£25 seems too cheap IMHO, but good luck

I want to get the work though

Any Ideas where would be a good place to advertise?

Start at £25 and if your getting too much work then put your prices up

Just make sure that you factor in travel expenses, you dont want to blow most of your profit on fuel..
No call out charge will definately be a big bonus for the customers, just keep an eye on the cost.

As its going to be a local buisiness then local papers and posters seem to be the obvious ways to get noticed. I would try and get posters put up in local PC and games shops as well.

Is anybody else offering the same or similar service localy?
If they are then find out where they advertise and what they charge.

If your targeting local companys then try and make everything look as professional as possible. If your confident in your ability then there is no harm in making your part time venture appear to be bigger then it really is (as long as you can deliver the goods)

Good luck

Edited by Holst on Thursday 15th January 20:25

[MiloD]

Register for self employment here: www.hmrc.gov.uk/selfemployed

If you don't do it within 3 months they tap you for a £100 fine.

[Eric Mc]

Deluded said:

Curious, when you say "tell the tax man" does this simply mean registering as self employed on the IR website?

You can phone, write or use the web site. The tax man doesn't mind.

[Brown and Boris]

mcflurry said:

I used to work for an agency who charged £45 per hour + VAT
£25 seems too cheap IMHO, but good luck

I think my guys charge £40.

[sider]

With regards advertising - i've tried a few things in the past - i once thought a leaflet drop would be good - but it was slow.

Best way we remember companies is in the small local business directories that come through the door monthly.

We tend to put them to one side for a few weeks and bin them when the next copy lands. We needed a plasterer the other week and looked there - found one straight away who was good and cheap. He was advertising there too as he wanted to spend a bit of money to look better than someone who ads in the local rag, but did need the work.

[jkennyd]

I live in a small town and we have around 12 IT companies and mostly are one man bands. The average around here is £25 with no fix no fee and no callout charge. Have a look at your local business directory and make a couple of interested calls and feel the way. Give it a couple of months to see how it goes first before you tell the gov. If you are going to go longer and advertise the chances are they will find you out.