Should I create a business, when income is 2k pa

[Taitlan]

Here's the situation. I'm currently employed and earning a decent wage.

Additionally I personally create and sell digital products which bring in about £2000 a year (no outgoing or production costs, that's all done in my spare time).

With this extra income of 2K a year, is it worth setting up a business for that small an amount?

Will the costs of running a business for 2K income, outweigh the normal taxation cost?

Thanks for any advice

 

[The Byre]

The moment you create a company, you have to file company accounts, pay water and sewage rates, pay additional council taxes and can incur all kinds of other mainly unwelcome attention from various officials.

Just declare that lot as additional income and trouser the difference!

 

[StevensOnln1]

You don't pay additional council taxes, water rates or anything else just because you've formed a limited company. That would only apply if the company had its own premises or a dedicated part of your property.

 

[DesignerNick]

The moment you create a company, you have to file company accounts, pay water and sewage rates, pay additional council taxes and can incur all kinds of other mainly unwelcome attention from various officials.

Just declare that lot as additional income and trouser the difference!

You don't have to pay all of that?

 

[Ian J]

Will the costs of running a business for 2K income, outweigh the normal taxation cost?

What exactly do you mean by "running a business" as you are effectively running one now, albeit on a small scale and part time.

As long as you declare the income and expenses to HMRC that's all you have to do until the sideline gets much bigger

 

[DontAsk]

You don't pay additional council taxes, water rates or anything else just because you've formed a limited company. That would only apply if the company had its own premises or a dedicated part of your property.

Quite the opposite, you can offset a proportion of them against profit as business expenses.

 

[DontAsk]

Just declare that lot as additional income and trouser the difference!

You need to register as self employed and pay the appropriate NI as well as tax, set up as a sole trader. No need for an accountant if you are reasonably numerate.