This last month I have realised that selling online is actually quite worth while. Now we (PT Games) know that we want to stay online as a business, we feel it is time to do things officially.

Having read up on the HM Revenue & Customs website about registering as self-employed I think this is the right move to take. However, I still have a full-time job and want to continue this job for at least the next 12 months how will this effect my income tax? Is it a wise move to do so only one month into 'real' business? or would it be best to wait for another two months.

Also, how do I register PT Games as a business or will this take place when I fill in the form for becoming self-employed. For example have a company registration.

Becoming VAT Registered is this compulsory? I've heard you need to turn-over more that £61,000 a year to be required to. Or would volunteering for it be a good move to make just in case we do exceed that £61,000.

Now for Import Duties, At the moment I pay the Import Duties and VAT but if I am VAT Registered what benefits will this have? If I am lucky and don't get charged do I have to declare this to HM Revenue & Customs anyway.

Sorry to make this so long, were trying to make everything as legitimate as possible and I know there a lot of you that have done all of these things. Any help at all would be great. Thanks In Advance, Tom.

Strictly speaking you should have registered within 3 months of starting trading. (Not sure how long you have been trading for).

First thing is first. Head over to this page:
http://www.hmrc.gov.uk/forms/cwf1.pd...asselfemployed

Fill that form out and send it back to HMRC. That will then mean you are registered as self employed with HMRC and they have you on their records, "officially". The next thing to do is to look into National Insurance contributions. As you have a full time job now I presume you already pay these with your current employer. You will need to do some research on this and see what the implications are.

VAT registration isn't required until your turnover exceeds whatever the given figure is for that year (£61k or whatever it currently is). It isn't necessary to register for VAT until you reach that figure, in my experience very few register until they hit the time they legally have to. Registering PT Games can be done but you can quite easily state you are "trading as PT Games" until you formalize an entity later in your business. The other alternative would be to go to a Limited Company but much like VAT I wouldn't advise doing this until you have out grown the "sole trader" or basic capacity of a start up.

Registering a business is actually very simple. It only really gets complicated when you register limited companies and start dealing with VAT. Don't forget that as soon as you register as a business you will be required to fill out a tax return each year - although this may seem standard, don't forget to do your accounts properly and ensure that your books are up together in case they ask for them after you submit your return.

Some further links of Interest:
HMRC - Register a New Business
HMRC - Working for yourself - The guide
HMRC - Income Tax - (Rates and Allowances)
HMRC - National Insurance Cont. (Rates and Allowances)

Hope this helps

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Last edited by Anthony; 16-02-2007 at 12:00 AM.

Thanks Anthony, some good reading material there...:niceone:

I'm going to fill in all of these forms tommorow and get them sent off right away.

In my view its always best to become a limited company, I set one up the day I started trading.

VAT registration rarely has any benefits for retailers, you almost always end up paying more so best to leave that until you have to. One consideration is that you cannot claim back any VAT on the stock you already have when you register so best to do it when you have as little stock as possible in hand.

When you are VAT registered it isn't 'lucky' for your goods not to be charged VAT on import, as you will have nothing to offset your sales VAT against.

What exactly is involved in become a Limited company? and what are the advantages and disadvantages if you don't mind. I've seen a lot of websites offering the service was never sure exactly what it was or meant.

Thanks DSC for your Contribution, 2 posts and already helped me loads.

Fill out a form from HMRC pay a small fee an appoint a couple of directors and company secretary, you can do both.

The most important advantage of being a limited company is that your personal liability is zero (unless you operate illegaly) so if anything goes wrong they are not going to come and take all your stuff, with every other set up they can. It can make your company seem more professional and some companies will only let you set up an account with them if you are a ltd company,

Downside is you have to fill in a form or to a year which you haev to pay a couple of quid to submit.