bit of advice on going self-employed

wulfie

wulfie

New member
Hi all im am about leave the garage that i work in as it is now going down the tubes and its not worth my while hanging on for the redundancey money....*zlitch spondulaks* :rolleyes:

Nway ive spoke to the chap in charge of a boat yard just down the road from me all the workers are self employed and there is pleanty of work on the go just now.

i just want to get some info about being self employed as to how easy is it to balance your own books, and getting set up ....ect

any info would be great cheers.
 
You know yourself, the island seems to have a different work ethic to other parts of the country. I've found that friends up there tend to have 2/3 positions. If 16 hours or less you can claim for Working Tax Credits, I'd recommend you speak to Local Enterprise Co (Highland and Islands - Inverness). They will help give you all the info you need to get started and free training/advice on keeping records etc.

Good luck with whatever you plan! Cheers, Jane
 
Well first off you need to register and start a company, not sure on your line of work but get yourself an accountant, they'll organise the company formation/registration, company bank account and VAT registration if needed, should set you back around 200 quid and can be done that day.

You can then claim the money back from your business simples!

Balancing the books etc is simple if you can use a computer and it's just a case of keeping track of your incomings and outgoings and paying any VAT etc every quarter, depending on what your accountant suggests you could simply be operating under PAYE or shares and dividends.

Best advice is your accountant, get them to do your accounts for the first three months just so you can understand what's needed and take everything on from there.
 
No need to register if self employed and no need to start a company either! Vat registration is only recommended if turnover £65k+. Don't use an Accountant right away, wait until your established!! Don't see Wulfie earning megabucks on Skye unless he's wheeling and dealing big houses (LOL). As I said, stick to the Local Enterprise folks as its all free.
 
You could always start a business stealing cheese off of peoples pizzas...after 1 week you would have enough to supply at least half of edinburghs italian restaurants..............not sure how you would declare that to the VAT man though.............
 
RobbieT said:
You could always start a business stealing cheese off of peoples pizzas...after 1 week you would have enough to supply at least half of edinburghs italian restaurants..............not sure how you would declare that to the VAT man though.............
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Cheesey pizza dough is tax deductable:lol2:

Seriously though, a good accountant advice can save you a fortune and costs nothing for an enquiry - best o luck mate!
 
RobbieT said:
He's not interested in the dough...just the cheese.......................trust me............
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He offered me a cable tie when my tank clip broke at Ullapool, but come to thnk of it, it did look (and smell) like a cheese string......:D I'm sure there's a support group for Cheese-a-holics somewhere...............:D
 
Advice?

When you are an employee you have one boss.


When you are self-employed EVERYONE is your boss!!

Speak to an accountant is first step.
He/she will give you info on what options you have with setting up a limited company or not, VAT implications or not.
Books as mentioned nowadays is dead simple with the correct accountancy software. (Follow accountants advice as their job is much easier if you use the same software they use and hence lower accountancy fees. ;) )
You may need Public Liability insurance depending what you are doing and where you are doing it. (give me a shout if that is something you need to look at)
Advertising? How are you going to let people know who and where you are?
Don't get carried away and spend a fortune on Yellow pages etc. Dead easy to spend thousands and get virtually no return.
What works in cities is of little use in rural areas in my experience.
Skye (like most of North Scotland) is still a small place and word of mouth and recommendation is how the vast bulk of advertising is done.
A tenner for an ad in the local paper will bring far more returns than a grand in yellow pages!
I've tried every media apart from telly and largely it is a huge waste of money!
Don't listen to the salesfolk from Thomson etc about how many folk read these ads.
Use your own local knowledge and think if you were looking for someone to do something on Skye how would you find them?
Making sure you have enough potential work to get you going is the major hurdle, after that everything falls into place.
But as I said at the start be prepared to work a lot harder and longer hours than you do at the moment and your free time will diminish rapidly!
Folk say "working for yourself must be great?".
It has advantages but it is NOT nearly as easy as being an employee.
 
Johnny,

Both Jane and Stewart have given you sound advice on here, Where Freak is coming from i dont know unless they do things different down sarf ( or unless you plan to open a big garage with ex amount of emploees )My advice is keep it small and simple. I have been self employed from 1975 and yip you will work longer hours and then be prepared to do even more hours on bookwork but if you make good money then you can take time off when you like and start when you like and finish when you like.... If you buy us all drinks at the masher we will give you all the advice you need on how to make a fortune ;)
 
thanks for all the advice basicley the chap down the road with a boat yard and he prefers if everyone there is self employed to work on the boats as it saves him the paper work of dealing with employees so technically i would be contracted with him for each boat i do and get paid ^.^
 
From that I would still get a word with an accountant.
HMRC are tightening up a fair bit on this and you want to make sure you are in the clear.
You may be able to claim various outlays as legit business expenses such as motoring costs but rules on what qualifies etc is not always as straightforward as you might think especially if you are only working for one person at one site. HMRC are well aware of this practice and this is one of the tests they use to check IF you are really self-employed.
Reality is you are still an "employee" the guy you work for is simply saving NI contributions but make sure you are ok and you won't have to worry if/when HMRC pick it up on an inspection.
Not sure what the term is now but was known as "labour only sub-contractors".
 
A lot of the guys in the offshore game work this way - they are working for a big oil services company for years but are technically self employed, contracting out 'services' and putting in an invoice evry month rather than getting a pay poke.
 
Stewart is right Wulfie, just do a Google search for "IR35" to see the legislation and the confusion that relates to it. Best to get some professional advice before you find yourself on the hook with the taxman.
 
Pict said:
A lot of the guys in the offshore game work this way - they are working for a big oil services company for years but are technically self employed, contracting out 'services' and putting in an invoice evry month rather than getting a pay poke.
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I have a lot of clients in the offshore sector and the majority now form a limited company if it is just themselves and this seems to be a "cleaner" way to do it and without revenue hassles.
Guys who have been self-employed for 20 years are now starting a ltd. coy on their accountants advice.
 
A limited company is no fix for the claim of "disguised employment" that HMRC could make. The whole thing is very ambiguous, the incoming clowns (Tory gov) were supposed to clarify / simplify things, but holding your breath is not advised.
 
wulfie said:
thanks for all the advice basicley the chap down the road with a boat yard and he prefers if everyone there is self employed to work on the boats as it saves him the paper work of dealing with employees so technically i would be contracted with him for each boat i do and get paid ^.^
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If you're contracted you would be best to ensure the T&C's are all correct, again I only know my trade and the government has a stealth tax (IR35) which can get people in a lot of financial hot water so again an accountant with knowledge of your trade would be beneficial to ensure you keep as much as possible for yourself.
 
The IR35 is to stop people going self-employed but work for the same employer so that you both save National Insurance Contributions (yes it's another income tax so add employee 11% to your income tax and you can see how much income tax you actually pay. We will ignore the 12.8% the employer has to pay).

You might find that you need to work for more than one employer to avoid being hit by IR35 but there may be certain industries where accepted practice overrules the regs. Business Link has a good website which may help? Good luck, hope it works out.
 
Depends on which way you want to go:

Self employed - simple online form for registering as self employed on HMRC site. That then gets you in their system and every year you will get a Tax Return issued which you then need to complete by 31st January after the tax year end 5/4. As self employed you will pay class 2 NI monthly/quarterly and then on profits 9% NI and tax at your marginal rate (basic rate 20%).

Limited Company - Bit more to it. Form a Company via an accountant or formation agent. A lot of my Clients think they are saving themsleves money by just doing a quick formation online themselves but then realise you then have to do a lot of other forms aswell and also the agent gives you no help really!

Once set up you need to have a bank account in the Company name. Then register with Inland Revenue for corporation tax and also as an employer (as you would be an employee). Also vat if you need to or want to (have to if turnover over £73k).

You can still save about £3k a year in tax and Ni by trading via a Company as the trick is to take a small salary which uses your tax allowance and anything above that take as a dividend which is treated as taxed already. You and the Company then avoid the NI hence the saving......

Companies are still the way to go but you have to be a bit better prepared and keep a closer eye, especially now the Revenue can fine up to £3k for badly kept records......

Shout if you need any specific advice.....

IR35 wise there are some quite simple get outs: Invoice the customer for each job, make sure you can send a substitute to do your work etc etc.....
 
Keep on working at the garage take on evening and weekend work at the boat yard ( is Strollamus still there?) look on it as overtime and hopefully before you know it the day job will start getting in your way with the extra work you are taking on. At this point you know you have a better chance of keeping your head above water.
Thats how it worked for me 20yrs ago and still swimming happily.
Keep a record and receipts of everything you spend work wise including petrol, Never sell yourself cheaply being self employed you will have lean periods thats when you live of the excess that you have made and when you have a holiday remember you are not earning, so if you are only charging £20 per hour will that give you enough to take a well earned break?
 
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