Help, so confused setting up a small business just me

[tinkerbellparis1983]

Hi, I'm after some advice as I'm finding this all very confusing.

 

I've recently bought a sewing machine and was asked by some friends to make various bits, bunting, mobile covers etc. They bought the materials first and I made them. No money was exchanged. But after receiving comments from others and being asked to make for them I thought I could do extra. I already work part time (20 hours in a school) but thought in my spare time as I enjoy making stuff I could maybe do extra for people and also do craft fayres etc. I was told I'd need to register with hmrc, so I registered the other night whilst very tired, using a name of the top of my head and I put that I started working (the business) on) 06/04/12 (I think it was this date, I know I did it for the new tax year) - the new tax year?!? So I can start receiving money and not get in trouble...is this right? HMRC have sent me a UTR number so I went on the site to finishing registering but I want to change the name...can this be done as I don't like the name I started with? Also I have put 08/06/12 as the date I started working for myself on there as I cant remeber the exact date I put previously, will this matter?

 

I have also read that I will have to start making class 2 NI payments? £2.50 a week??!?! Yet I am no where near earning anything like that yet, so this is worrying me? As I have heard nothing about it either from HMRC and don't want to be owing? I've had 2 people enquire about orders but no pennies as yet.

 

I'm so confused by it all I'm thinking of not bothering now, but how do I cancel it all if I do?!?!

 

Many thanks x

[rebel11]

The guys will be happy to advise as soon as they are available.

[Bang!]

I think you might be best calling HMR&C and asking them, or even popping in to see them. Most people starting something like this would not really bother with formalities, until it looked like it would be ongoing and had/would earn regular money.

 

There is no point in paying more NI when you are only working part time and have no extra income yet. There may not even be a need for the class 2 contributions if you are already paying through your work. But as I have only done one or the other and never both at once, I cannot really say. HMR&C could help with this.

 

It sounds complicated, but you might be better setting up a company if it looks like your business will take off. This is far easier than it sounds, and from memory costs about £15, and requires two lots of paperwork to be submitted a year, one of which costs about £15, and the other has no charge.

[King_Prawn]

First, you self employment commences from the day you start actually looking for work (i.e. similar to when a shop first opens its doors). Any expenses incurred up to this date can be claimed as though incurred on the first day of trading.

 

I would change the name of the business when doing your first self assessment tax return.

 

With regards to Class 2 NI, you do have to pay this whether you employed as well or not. However, if your earnings for 2012-13 were lower than £5,595 than you could have made a claom for the Small Earnings Exception by completing the Form CF10.

 

It is obviously, too late to complete the Form CF10 for 2012/13 but if, once you have prepared accounts for 2012/13, your profits (i.e. income less allowable expenses) are low enough then you can write to HMRC and ask for a refund of the Class 2 NI for 2012/13.

 

Don't forget to complete Form CF10 for 2013/14 if you believe your profits will be low enough!

[renegadeimp]

This thread is almost a year old? Did you have a problem we can help you with Trueman?

[King_Prawn]

This thread is almost a year old? Did you have a problem we can help you with Trueman?

 

The OP is coming towards the end of his first year of trading, so I am trying to give some advice which will help him.