advice required

[prbaxter]

Hello all.

I work full time in IT. I'm considering starting a small hobby/enterprise, printing T-shirt designs using my computer skills and heat transfers (once i have some income from this I will buy a proper HEAT press, etc...).

My shop will be internet based and i intend to process orders as they arrive.
I'm just in the unknown when it comes to billing.

Do i need to be VAT registered?
Do I need to invoice customers with VAT receipts?
If VAT registered, can I claim back VAT on expenses? And what are expenses, are they things i need for the business, or just anything i spend my money on?

Do I need to declare any earnings/profits to the Inland Revenue, with me having a fulltime occupation?

And any other pitfalls you can think of?

Best regards,
Bax.

[CassioAcc]

You need to register as self employed ( unless you are going to trade through a LTD). You do not need to register for VAT unless your business turnover will exceeed 67K.

You will be able to offset any business related costs with the sales.

As you are employed elsewhere you may be able to get a deferrment of NIC for your self employment.

[prbaxter]

so to start off with... business will probably be really slow so would i need to do anything now, or can i wait until things pick up a little?

Many thanks,
Bax

[CassioAcc]

You must register with HMRc within 3 months of starting else you will incurr a fine.

[prbaxter]

yes. thanks for the info. I think 'sole trading' is the way forward.

last question... will have any affect on my current tax/NI contributions? Would i have to pay them myself (rather than coming out on my employers payslip). or do i just pay any extra tax/NI seperately via self assessment? I would think that profits would be below the NI threshold anyway for the 1st year.

[maggie-august]

why i can't post thread,so terrible

[CassioAcc]

Your employment tax would not be affected. You will need to delcare the self employment on a Self Assessment.

For Class 2 NI you can apply to defer this as you already pay Class 1.

Note - if you make a loss in your self employment you can offset against other tax paid ( ie employment)

[evil_grrrl666]

Actually, if you read the documentation HMRC provides, you should NOT apply for deferment if you think your earnings will be below a certain amount, 4500 or something, you should look it up. If you think you will not earn more than that during your first year of self employment, you do not need to pay NI contributions for your self employment at all. So when you register as self employed, you also apply for Small Earnings Exception at the same time. Do make sure though that if you do earn more than the threshold set by HMRC, you will have to notify them and start paying your NI contributions for your self employment as well.

For your employment, everything remains the same.