Can I start my own business while employed?
Discussion
I'm in full time employment (25 years) and feel its time for a change and do things for my self, this will obviously take time, so can i start by working weekends/evenings whilst still in full time employment.
Looking into vehicle transport (small car/bikes) and maybe airport mini bus runs, and a bit of car sales (like everyone else)
Would want to be all above board with insurance/tax ect and all from home if possible or else rent a small office.
Any advice or pointers welcome.
Looking into vehicle transport (small car/bikes) and maybe airport mini bus runs, and a bit of car sales (like everyone else)
Would want to be all above board with insurance/tax ect and all from home if possible or else rent a small office.
Any advice or pointers welcome.
There is no law prohibiting you from running your own business whilst also in employment. Obviously, the availability of time to run a business and work full time in employment must be taken into account. There could also be problems with your employer, especially if there was a conflict of interest between your self-employment activity and your employment.
From a tax point of view, there's no reason not to. In fact, your only restriction is what your existing employment contract says about you having employment outside of that job.
If you want to start trading self employed, just download the relevant forms the the HMRC website. You have three months from the time you commence trading to get yourself registered as self employed. Then remember to keep invoices and receipts etc so you can do your tax return when the time comes. (Note, being self employed does not preclude you from being employed too, from a tax perspective. So you'll continue to pay PAYE on your day to day job and you'll have to save up and write a cheque to pay tax on the profits of your trade.)
HTH.
If you want to start trading self employed, just download the relevant forms the the HMRC website. You have three months from the time you commence trading to get yourself registered as self employed. Then remember to keep invoices and receipts etc so you can do your tax return when the time comes. (Note, being self employed does not preclude you from being employed too, from a tax perspective. So you'll continue to pay PAYE on your day to day job and you'll have to save up and write a cheque to pay tax on the profits of your trade.)
HTH.
Lancs Jag Boy said:
My contract say that I can't (could not) but I did anyway. I don't see hwy our £1M p/a CEO can have 5 non-directorships, but I could'nt run a small business not in conflict with our business. Do it, just don't get caught.
Some employment contracts may say that if you don't ask permission then they have intellectual property rights over anything you do while employed by them. So they may - though not sure if would stand up in court and I'm NOT a lawyer - have rights to any profits from the new business.Having said that I started my first business without official permission from my employer but my line manager knew about it and we even talked about it day to day.
My employment is precision engineering so nothing at all to do with what I want to do, Also my contract is not worth the paper it's writen on so no worry there either (small company thats not really into contracts).
So need to start doing some home work, and no doubt lots of silly questions to follow as i've no clue where to start, apart from a chat with an accountant, and sort out some advertising.
thanks for all your help so far.
So need to start doing some home work, and no doubt lots of silly questions to follow as i've no clue where to start, apart from a chat with an accountant, and sort out some advertising.
thanks for all your help so far.
I did and still run it now. I'm only in the first year and I am not making any profit (all money reinvested) sohaving anotehr income allows me to do it. As said above you do have limited time but you have thesafety net of being able to wrap it up and carry on as normal. If you have a good idea and are willing to have a go then do it.
Mr Overheads said:
Some employment contracts may say that if you don't ask permission then they have intellectual property rights over anything you do while employed by them. So they may - though not sure if would stand up in court and I'm NOT a lawyer - have rights to any profits from the new business.
I'd love to see how that would stand up in court if the new companies business is unrelated to the existing employee.Do it, and don't get caught. If you go the self employed route and start at the right time (April 6th) you won't have to do your first tax return for 18 months so the current employer has no way of finding out AFAIK.
My other half is still in full time employment & has also registered as self employed for business that she has set up & is working on in her spare time.
She is not VAT registered & has been told she can only earn up to an amount of around £5K.
She is about to start preparing info for her tax return & has been told (by somebody in the tax office) that if she submits receipts for the equipment she has purchased then she will get this money back.
Now I don't claim to have any knowledge of this process & am looking for some advice.
Is the equipment amount offset against taxes owed?
To date, she has done very little business and therefore owes only a small amount of tax.
As her equipment costs will exceed the amount owed in tax will that mean she will just submit a nil return?
As her equipment expenses will exceed the amount owed in tax, the difference that she has already paid out I assume she cannot recover in anyway?
Sorry if the above makes no sense, as I have said, I have no understanding of how this works.
She is not VAT registered & has been told she can only earn up to an amount of around £5K.
She is about to start preparing info for her tax return & has been told (by somebody in the tax office) that if she submits receipts for the equipment she has purchased then she will get this money back.
Now I don't claim to have any knowledge of this process & am looking for some advice.
Is the equipment amount offset against taxes owed?
To date, she has done very little business and therefore owes only a small amount of tax.
As her equipment costs will exceed the amount owed in tax will that mean she will just submit a nil return?
As her equipment expenses will exceed the amount owed in tax, the difference that she has already paid out I assume she cannot recover in anyway?
Sorry if the above makes no sense, as I have said, I have no understanding of how this works.
Dave_ITR said:
My other half is still in full time employment & has also registered as self employed for business that she has set up & is working on in her spare time.
She is not VAT registered & has been told she can only earn up to an amount of around £5K.
She is about to start preparing info for her tax return & has been told (by somebody in the tax office) that if she submits receipts for the equipment she has purchased then she will get this money back.
Now I don't claim to have any knowledge of this process & am looking for some advice.
Is the equipment amount offset against taxes owed?
To date, she has done very little business and therefore owes only a small amount of tax.
As her equipment costs will exceed the amount owed in tax will that mean she will just submit a nil return?
As her equipment expenses will exceed the amount owed in tax, the difference that she has already paid out I assume she cannot recover in anyway?
Sorry if the above makes no sense, as I have said, I have no understanding of how this works.
You can recover PAYE tax if your self employed business makes an operating loss, however I'd be doubly sure my books were above board as I'd expect it would put you higher up the list of "those to be investigated."She is not VAT registered & has been told she can only earn up to an amount of around £5K.
She is about to start preparing info for her tax return & has been told (by somebody in the tax office) that if she submits receipts for the equipment she has purchased then she will get this money back.
Now I don't claim to have any knowledge of this process & am looking for some advice.
Is the equipment amount offset against taxes owed?
To date, she has done very little business and therefore owes only a small amount of tax.
As her equipment costs will exceed the amount owed in tax will that mean she will just submit a nil return?
As her equipment expenses will exceed the amount owed in tax, the difference that she has already paid out I assume she cannot recover in anyway?
Sorry if the above makes no sense, as I have said, I have no understanding of how this works.
Who told you she can only earn 6k? That's the small earnings threshold, but as she's already on PAYE this does not apply to her. The VAT registration limit is ten fold that.
Lots of errors in your assumptions I'm afraid.
She needs to compile a summary of her business income and her business expenditure for the period from when she commenced trading up to 5 April 2010.
From that summary, she will be able to work out her business profit (or loss) e/g. her business income less her business costs.
Her income will be based on the sales invoices she has issued in the year for work done or goods sold.
If she is a cash business (such as a retailer), the sales will be more likely based on cash received and/or credit card sales made.
Her business expenditure will consists of all costs incurred wholly and exclusively for the purpose of the business.
This normally consists of the cost of goods and materials purchased for resale and overheads, such as rent, light and heat costs, staff costs, admin costs, vehicle running costs (fuel, road tax insurance, repairs etc)accounting fees, business telephone costs etc etc.
The one thing business costs DOES NOT include is "Capital Expenditure". This relates to expenditure on Fixed Assets - such as Office Equipment, Computers, Plant and Machinery and Vehicles.
HMRC does not allow a trader to offset the cost of capital items directly against their business profits. Instead, the trader must claim Capital Allowances.
These allowances are based on specific percentages that can be claimed against specific types of assets. In other words, there are different allowance rates depending on the nature of the assets being claimed for.
The good news is that business Plant and Machinery and Office Equipment and Computers are currently eligible for an allowance of 100% of the cost of the items purchased.
In other words, the full cost of the items purchased will be offset against the business profit for the year.
Capital Allowances on Motor Cars are nothing like as generous (in most cases).
Once all these deductions have been taken off, then you can see how much profit is left. Tax (and possibly Class 4 NI) will be calculated on this remaining figure and this liability will be paid to HMRC under the Self Assessment system.
She needs to compile a summary of her business income and her business expenditure for the period from when she commenced trading up to 5 April 2010.
From that summary, she will be able to work out her business profit (or loss) e/g. her business income less her business costs.
Her income will be based on the sales invoices she has issued in the year for work done or goods sold.
If she is a cash business (such as a retailer), the sales will be more likely based on cash received and/or credit card sales made.
Her business expenditure will consists of all costs incurred wholly and exclusively for the purpose of the business.
This normally consists of the cost of goods and materials purchased for resale and overheads, such as rent, light and heat costs, staff costs, admin costs, vehicle running costs (fuel, road tax insurance, repairs etc)accounting fees, business telephone costs etc etc.
The one thing business costs DOES NOT include is "Capital Expenditure". This relates to expenditure on Fixed Assets - such as Office Equipment, Computers, Plant and Machinery and Vehicles.
HMRC does not allow a trader to offset the cost of capital items directly against their business profits. Instead, the trader must claim Capital Allowances.
These allowances are based on specific percentages that can be claimed against specific types of assets. In other words, there are different allowance rates depending on the nature of the assets being claimed for.
The good news is that business Plant and Machinery and Office Equipment and Computers are currently eligible for an allowance of 100% of the cost of the items purchased.
In other words, the full cost of the items purchased will be offset against the business profit for the year.
Capital Allowances on Motor Cars are nothing like as generous (in most cases).
Once all these deductions have been taken off, then you can see how much profit is left. Tax (and possibly Class 4 NI) will be calculated on this remaining figure and this liability will be paid to HMRC under the Self Assessment system.
S1mon. said:
I'm in full time employment (25 years) and feel its time for a change and do things for my self, this will obviously take time, so can i start by working weekends/evenings whilst still in full time employment.
Looking into vehicle transport (small car/bikes) and maybe airport mini bus runs, and a bit of car sales (like everyone else)
Would want to be all above board with insurance/tax ect and all from home if possible or else rent a small office.
Any advice or pointers welcome.
Yep, i work fulltime and run many turning over 100k's a year, easy if you enjoy hard work Looking into vehicle transport (small car/bikes) and maybe airport mini bus runs, and a bit of car sales (like everyone else)
Would want to be all above board with insurance/tax ect and all from home if possible or else rent a small office.
Any advice or pointers welcome.
I have offices with warehouse and staff all ticking over without any impact on my day job, as completely different line of work, not an issue ( apart from when i turn -up for work in the Gallardo and piss some lazy staff off ) i just remind them i work 7 days a week while they sit watching TV or whatever lazy people do...
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