Starting out

[Kat205]

Hi everyone,

I know there is a million threads regarding starting your own nail business however after reading some of them, I'm just so confused!!

I work full time as a teacher and wish to follow my dream in setting up a " very small" mobile/home based little business as a side line to my teaching. I have trained in Calgel and have a few friends and family who's nails I do, however by word of mouth my name is "getting about" and had other people message me asking to do their nails. I have been doing, but feel like its really cloat and dagger. I have all the equipment I need and I'm desperate to advertise etc. however I'm just so conscious I'm not registered with the tax man.

My main question is that I have no issue with setting up "properly" however I'm concerned that the few nails I do will cause me to make no profit as I will end up giving it all to the tax man. I currently only make on average around £60 per week on nails (that's not taking into account costs etc). But I know that even £20 is classed as an income.

I currently earn £26000 In my full time teaching job - will this effect the tax I pay on my "business"?

where do I start - I want to hold my head high and know I am doing things properly.

Thanks so much!

K x

 

[kezza*]

You need to register with inland revenue and keep a record of receipts etc. you,ll only pay extra tax if you make a profit. You only have three months from when you first start working self employed otherwise you could receive a fine. Also do you have insurance?

 

[byKaty]

As said above, get registered and get insured ASAP. That should be a priority. Taxman will come down hard if they find you out. (Even though big corporations get away with millions. Barstewards )
I know this as my bf got hit with 8k tax bill due to accountant cock up and they made her pay it back within a matter of months! I can remember the day her accountant called her. She sat in middle of living room floor in tears. Do it properly. And best of luck! X

 

[Kat205]

Hi thanks for your replies - I am insured I sorted this out with salon gold last week so that was the first thing ticked off.

Do I apply to the inland revenue online? does this automatically trigger NI

Thanks again

 

[squidgernetball]

When you are already employed you will pay tax on all your profits as your tax free allowance is allocated in your current job. Keep all receipts and include any travel expenses, insurance, products, uniform etc etc. If you're working from home, you are also allowed to deduct money for the space you use at home. You'll be surprised how it adds up.

Vic x

 

[Kat205]

Thanks so much Vic your reply - yes I can imagine it does all add up! its all very scary but very exciting that I can begin to promote and talk to people about what I am most passionate about!

Is it literally a case of once registered, keep EVERYTHING and then file the returns every year. If there a loss, and I can show this, I wont pay tax. However any profit will be taxed. Should I put money to one side in preparation of me getting a tax bill at the end of the year if this is the case as I'm presuming the tax will be taken in one lump sum? are there any monthly contributions that will need to be paid in line with the HMRC?

K x

 

[claire@evolve]

Why don't you open a separate bank account , that way you can pay all your expenses out and bank all you income ( be strict and don't touch it ) , leave 20% behind (before you take any profit )for tax man x I'll be surprised though if you do have profit after you've taken into account all expenses x you sound like you have a great job already which gives a fab income - it would be hard to replace that income just doing nails - is that your intention ? Or more a hobby ? Xx

 

[lfbarnett717]

Hi,

Reading this sounds just like me! I am a full time teacher on the same pay grade as you, and am about to train with CND, then open a small friends and family mobile business. It's worth checking your teaching contract about other work as there was a clause in mine about it - you may need to check with your headteacher first xxx

 

[SalonsByGregory]

You will need to register as self employed using the following link

https://www.gov.uk/set-up-sole-trader/register

Tell them you are already employed full time so you don't end up paying class 2 national insurance.

You may not need to pay extra tax and NI in your first year as you can deduct your equipment and training costs. Make sure you carry an loss forward to the next tax year.

Set aside 29% for tax in a separate account once you start making a profit for NI & tax. Be aware that you will need to pay all of your tax on 31st Jan plus an additional 50% for next years tax (this catches out a lot of people). If you haven't been trading before may this year then you submit your first tax return by 31 Jan 2017.

Hope that helps

Michelle x

 

[louisekjh]

Sorry to hijack the tread.

When you say you have to pay 50% for next years tax is that also the case if you haven't made a profit in the first year?

 

[hazelb]

I think what salonsbygregory means:
Submit your tax return on line, you will them be told what your tax bill is based on your profit ( payable in Jan ) BUT in Jan you will also be asked to pay half of your next years tax in advance ...
so if your tax bill after submitting your return is £1000, in Jan you will have to pay your tax bill ( £1000 ) plus half your estimated tax bill for the next year ( £500).

if you don't make a profit , your Jan tax bill will be £0 +£0