UKC

As some of you are aware I have been working as a sports massage therapist for a little while. I work free lance if you will, for a physio. I want to set up my business so I can actually invoice the physio. I've been looking on business link and I have no idea what to do. Do i say it's a home business even though I won't be working from home, will that affect my mortgage? Advise please!!!!

In reply to Zygoticgema: My very limited understanding is that you can invoice the physio without setting up a limited company. You need to declare yourself as self employed with the HMRC and choose a business name. You can then invoice the physio as 'Mr Z trading as 'your business name''. You will need to do a self assessment every year.

Shouldn't affect your mortgage afaik

In reply to rossowen: Thanks, I do have a full time job so would that mean I'm self employed or not? Oh and its Ms Zyg

In reply to Zygoticgema: you can go the full hog and setup a ltd company, there a website online that does it all for you in about 30 mins and costs about 30 quid. makes life much easier if you start branching out. good luck

In reply to Zygoticgema:

You can have a freelance job and a full time one, but the tax man will assess you as having two jobs, which means more tax.

In reply to Zygoticgema: ps ltd company would get round the full time employment thing

In reply to Zygoticgema: Have a look at this http://www.taxdoctor.co.uk/self-employed-expenses.aspx

I don't know if you were claiming expenses before but definately worth it when you go self employed. Seems there are some you can claim for working at home (I presume you do your paperwork etc at home and not at clients houses etc).

In reply to Zygoticgema: Yes you can be employed full time and self employed at the same time. I was in that exact situation this time last year.

I am guessing that you are not employed as such by the physio? ie, do they pay your tax and NI? If so then you are not self employed.

If they don't pay your tax and NI and you will be invoicing them for the full amount, then you are self employed and will need to pay your own tax and NI via a self assessment. Call HMRC and declare youself as self employed. Keep records of invoices/expenses etc for your self assessment.

In reply to niggle: In fairness the amount I'm being combined, even combined won't be taxed all that much... I don't earn enough <sigh>

In reply to Bob kate bob: Thanks! I'll take a look.

In reply to Erik B:

Thanks, do you know the site?

In reply to niggle:

Yes and no. Depends what you mean by "more tax" - more tax paid, or paid at a higher rate.

Yes - two jobs means more taxable income.

No - the overall rates of tax and thresholds for the tax do not alter, but the total income does. Thus it is the same as having a pay rise in the one job, you earn more, you pay more tax.

In reply to Zygoticgema:

1) You can work and be self employed at the same time (your employer if the job is full time may need to know)

2) You can work from home self employed but watch out for insurance and mortgage issues, and the benifit limites you to clam a limited amount of Heat Light and Power based on the number of rooms. It really does not add up to much. Usually it's down to will you be seeing customers in your home that affects mortgages and insurance though.

3) Consider the benifits (if there are any) of opting to self registration for VAT, although unlikley. Last time I checked the essential registration limit was about £55k to PA

4) It really is not that hard to set up and run a small business.

4)

In reply to Zygoticgema: When I ran my own business (from home and other folks houses) all I did was declare myself self employed to the Inland Revenue. I didn't have another job though so I can't help with having to pay more taxes etc.

All I had to do was fill out a yearly tax self declaration form and also a NI exemption form as I wasn't earning enough.

I was in rented accomodation though, and although it stated that my business was a home run business, technically it wasn't as I was treating people in their own homes. Kept things simple that way. Not sure how it would affect a mortgage, but I know you can claim back on things like lighting and heating. But if you are only getting the odd client and not earning loads via the self employment, then it's probably not worth the hassle.

I worked freelance for nursing home for some time and just made up my own invoices. The thing that was the most hassle was actually getting them to settle their damn bill on time!

In reply to Zygoticgema:
Having been primarily self-employed for decades, I can recommend it as a way of working. I think it's well worthwhile to find yourself a friendly local accountant, preferably one specialising in small businesses, to get introductory advice on the basics like simple record keeping, tax returns, NI etc. That can save a lot of hassle later - a reputable accountant is an invaluable and reassuring firewall between you and the taxman. Shouldn't cost you much either. Issues like VAT and registering as a limited company can wait till you hit the big time!

Your local authority's Economic Development department or regional enterprise authority (check the phone book or online) will very likely have an advice service or clinic for start-up businesses, free or at modest cost. Don't assume they're only interested in big operations; they can be very helpful with advice and contacts.

Best of luck.

In reply to Zygoticgema: be aware if you set up a limited company you have a statutory responsibility to produce a set of accounts annually, which probably means you'd have to pay an accountant. I work in finance and most people in your situation would start as a sole-trader (no annual accounts requirement) as its easier and cheaper, especially as you're not trying to avoid lots of tax. Good luck with it all.

In reply to Zygoticgema: Tip 1. Ask questions on ukbusinessforums.co.uk not UKC! Mark

In reply to Zygoticgema: I think some mortgages (and properties, for that matter) have restictions and running businesses from home, but that's to stop people starting glue factories or brothels and such like so I wouldn't worry about it (unless you are starting a brothel, of course.)

If you use part of your property to run your business you can claim reasonable expenses but don't overdo it by charging yourself 'rent', otherwise the revenue will deem part of your house a business assest and charge capital gains on a proprtion when you sell.

Above all there's one thing to remember - they're not out to get you. As long as you are not trying to fiddle the system, and are prepared to keep sensible records, then you can ask C & R questions and they will give you sensible answers, they aren't looking to catch you out.

In reply to Zygoticgema:

The costs of administering a ltd company probably mean it is not worth doing here (you need a 6 figure turnover really).

If you start claiming for your home as work premises you save very little money (claiming utilities etc) but you may find insurance, council tax bills rise, so the conventional wisdom I have seen say usually not worth doing, unless you start charging the business rent for office space etc.

In reply to winhill: having your own small business is definitely worth doing, see an accoutant and keep everything simple.

The upside of having a Ltd company instead of a sole trader is that you can take all your earnings as 'Directors Dividend', and if you earn less (in total from both jobs) than about £40,000 (after all expenses) you only pay 10% on the dividend as opposed to 20% on sole trader earnings.

The costs associated with being a small Ltd company are not significant, a few hundred quid a year, and for that the accountant will deal with all the HMRC stuff which saves you hours of sleepless nights.

In reply to Zygoticgema:

Hi Gemma

Don't know if anyone's already said this but book an appointment with a Business Link Advisor, go along taking a business plan and any accounts you already have and they will give you free advice. They can also help you with marketing and deciding on whether a limited company or sole trader status is right for you. Don't spend money on accountants yet.

In reply to cragtaff:


be aware thought that some mortgage companies wont take dividends as income when calculating mortgage multiplyers etc and the divided has to be awarded equally between sharholders (if applicable), and is subject to your capital gains tax allowance before tax is liable at your highest rate.

There are also penalties for not submitting acconts even for dormant companies, and potentially corporation tax.

In reply to John Lewis:

More to the point hmrc take a very dim view.

Ms Zyg,

check your existing contract of employment to see what, if anything, it says about working elsewhere or setting up your own business while employed.

Depending on your circumstances you may be better working as a sole trader than as a ltd company. However, given that you are in a healthcare type of profession you should ensure that you at least have full PI insurance and think about going ltd just because of the liability protection that it can offer.

In reply to John Lewis: Thanks but I pay an accountant to be aware of all that.