The benefits of becoming self-employed
(or why you should go legit)
You know how it happens. You do the creative thing you love in your spare time just for fun. Your family and friends start to buy from you. The word spreads. Their friends start to buy from you. You try your stuff on eBay or Etsy. The next thing you know you’re running a business but you’re not quite legal. So to help you take the plunge, here are the top 10 reasons why you should go legit;
- If you register as self-employed with HMRC you can offset any costs of setting up and running your business against any business income
- If you are also employed on a PAYE basis you may be eligible for a tax refund by off setting any losses from self-employment against your tax paid
- If you are working over 35 hours per week and earning under £27k a year you may be eligible to claim Working Tax Credits
- If you expect to earn less than £4825 through self-employment in your first year you can apply for a small earnings exemption for you national insurance class 2 contributions and you may not have to pay anything to become self-employed
- If you are self-employed and working from home, you can offset part of your household expenditure as legitimate business costs e.g. heating, phone etc.
- If you buy any capital equipment like computers, musical equipment etc. which is used in your self-employment, you can offset part of the purchase of the equipment against your tax bill, even if it is sometimes used for personal use.
- If you buy any capital equipment before you register with HMRC as self-employed, you can only offset the second-hand value of this in your future tax return and not its full value
- You might get caught! The penalty is currently £100. You need to market your business to make it succeed – how do you know you’re not letting someone for HMRC (or their husband or sister) know that you’re trading? And if you’re also claiming benefits then the Department of Work and Pensions will be interested too.
- If you are employed and in self-employment too you will probably PAY LESS TAX in your first year if you register with HMRC.
- You can get a trade card at Macro and other wholesalers
If you’re not sure where to start call our team at the Custard Factory on 0121 224 7375 and book a free 1-2-1 today