PDA

View Full Version : Am I too late?



Tias
26-09-2008, 12:28 PM
Hi,

I am quite new to the forum as you can probably see.
I've been reading about seting up my own business for ages (as self emplyed whilst full time eployed by someone else).
Recently I opened my Etsy shop not thinking that I will sell anything, but I did couple of days ago! That is a great news but not such a great news is that I didn't register with Inland revenue...yet.
I officialy started 'trading' 2 weeks ago and still have the 3 months period to apply, but I don't know if that 3 month period counts if I already sold anything or am I too late now and will pay evil fine. :behindsofa:

woodtattoos
26-09-2008, 12:32 PM
My understanding is that you have to declare within 3 months of starting trading. So I think you have 2.5 months left! :D

Si.

P.S. (welcome)

Tias
26-09-2008, 12:51 PM
Oh, thank you so much.
That is what I originally understood, but I read a post today saying that it should be registered before your first sale and it really got me down! :)

AniccaJewellery
26-09-2008, 01:02 PM
They only want to know about you once you have made your first sale, so you are okay!

Sparklez
26-09-2008, 01:33 PM
Sorry to go against what the others have said, but it's not right.

You have 3 months to declare your business from when you set it up, not from when your first sale is. If you declare the date you sold something as your start date, you wont be able to claim any of your expenses, including the materials used to make the item you sold, from before that date. This would also apply to website costs/etsy fees/etc.

Hope this helps
Carol

AniccaJewellery
26-09-2008, 03:27 PM
What you are saying goes against the advice that Inland Revenue gave me when i was setting up business over here (8 months ago). They were quite firm that I did not need to register as a sole trader until my first sale.

nattynetty
26-09-2008, 03:42 PM
What you are saying goes against the advice that Inland Revenue gave me when i was setting up business over here (8 months ago). They were quite firm that I did not need to register as a sole trader until my first sale.

They would be! If you register before your first sale you can quite legitimately claim for your expenses/materials etc as Sparklez has stated. If you wait until your first sale you can't claim against these things therefore the In Rev will either get more tax from you or not have to pay you such a big tax refund depending on your profit or loss.

Basically, I was advised to register as early as I could by my accountant and I'd recommend the same to everyone else.

AniccaJewellery
26-09-2008, 03:46 PM
Gosh Inland Revenue are a bit sneaky then, aren't they? They certainly did not say any of that to me when i rang.

How annoying.

Sorry to pass on duff info then :)

Tias
26-09-2008, 04:11 PM
That is not too bad, as long as they're not going to fine me for not applying before my first sale.
As I previously said, I started my Etsy two weeks ago, so my total expenses from then to now are around 10.
Thanks for your valuable opinions!! x

nattynetty
26-09-2008, 04:26 PM
Gosh Inland Revenue are a bit sneaky then, aren't they? They certainly did not say any of that to me when i rang.

How annoying.

Sorry to pass on duff info then :)

Very sneaky! My dad is an accountant and most of his clients are small businesses - I can honestly say I've never heard him swear in my life except when he talks about the Inland Revenue. :p

Pagan
26-09-2008, 04:35 PM
I would advise checking out the Business Gateway too - I've just been on the phone to them and they were really helpful :D

Jo Lovejoy
26-09-2008, 06:12 PM
Hello and (welcome)to the forum.

Jo x

sharon
28-09-2008, 07:00 PM
Hi
Don't be scared of the taxman - they were fine with me & I've never had any problems with the tax forms. Its a lot simpler than you think & you can ask for a tax person to come and see you at home to take you through the basics so you know what you can claim for and what you can't. My friend who's a hairdresser & I asked for one to come out when we both set up in our different businesses - the lady from the IR was great & the service is free.

First of all I hope you've kept ALL your receipts no matter how little you have spent.
Next, look at the dates of the receipts - forget any that are MORE than 3 months old, its too late to claim tax relief against them. Find the earliest receipt that is LESS than 3 months old & REGISTER with the IR from that date. You can then claim tax relief against that one & any money spent since.
You'll be surprised at how much you can claim against tax, it soon mounts up - don't forget to keep a log of all mileage done in your car to buy your materials, or trips to the Post Office to send your items off. (tax relief can be claimed at about 40p per mile) Also you can claim a percentage of the heating/electricity etc you use in your home.

If you don't register you won't be able to claim any of these things. You won't have to fill a tax form in until after April next year & they aren't as bad as you think. Just keep all receipts, keep a notebook with everything you've spent (debits), everything you've earned (credits), every mile you've driven for your business & the date you drove (even if its only a mile round trip to the local shop to get a stamp), keep your utility bills as well.

Good luck

Sharon :)

sharon
28-09-2008, 07:05 PM
Only me again!

forgot to say you can register by phone - they only want your details plus date you want to register from, its totally painless!!

Also Business Link is great - invaluable info & seminars, most are free.

You'll also meet other first timers there so you won't feel as though you are the only person starting up - swap business cards, you never know you may find a customer!!

Cheers

Sharon

Tias
29-09-2008, 08:31 PM
Thank you Sharon so much for your advice!

I actually did fill online form yesterday and now am officially self-employed. :jippie:

I will apply for small earnings exemption as I don't think my profit will be any higher that 1000 in next year...if I am lucky...:)

And I'll keep all the receipts!

Thanks for your help, I'll see you around. xx

steve-bead
06-10-2008, 10:37 PM
Hi all,

Id agree that this is a bit of a 'grey' area, but you dont neccessarily loose everything that you paid out for if you did it when not reg as self employed.

If you start something as a hobby say, and then you decide you can make a business of it, then you can 'take on' the cost paid out so far to the new business (stock cost etc).

Now, how far you can push this is down to the taxman, but given that is is all done on self assessment anyway, I for one tend to push quite a bit !

Provided it was a genuine cost, thats more than fair - im not advocating breaking the law here - do NOT mess with the tax office.

As as aside, I also dont know anyone who have ever been fined for not declaring themselves self employed on time - but perhaps i only know lucky people. :-)

Of course, all the above is why a good accountant is a handy thing - I must stress 'good accountant' - I have come across a few that tend to advise only that which makes their life easier, in which case you might as well do it yourself.

All the best

Steve

nattynetty
06-10-2008, 10:53 PM
Id agree that this is a bit of a 'grey' area, but you dont neccessarily loose everything that you paid out for if you did it when not reg as self employed.

If you start something as a hobby say, and then you decide you can make a business of it, then you can 'take on' the cost paid out so far to the new business (stock cost etc).

Now, how far you can push this is down to the taxman, but given that is is all done on self assessment anyway, I for one tend to push quite a bit !

Provided it was a genuine cost, thats more than fair - im not advocating breaking the law here - do NOT mess with the tax office.

Yep you're right there Steve, I spoke to my dad (an accountant) about this at the weekend and he said you can do this although you do need to be careful - if you don't want to pay for an accountant it could be worth speaking to Business Link for advice instead.



As as aside, I also dont know anyone who have ever been fined for not declaring themselves self employed on time - but perhaps i only know lucky people. :-)


Again could be because of his job but my dad has met quite a few so unfortunately it does happen :o