The Wholesale Forums

[craftystylez]

Well I am going to get an online store up and running in the near future (in discussion with forum members) so the next step would be to become self employed.

Currently studying F/T (Accounting & Businesss, which helps but they dont teach you the practical stuff) therefore will only be able to work on the business in my spare time, so I think a sole trader would be best to start off with.


However as the sales will more than likely be inconsistent, NI and Income Tax how much would I have to pay? Lets say sales were £6000 in a year.

Are there any other fees involved?

Another example: If I purchased stock for £2000 and sold them on for £4000. Would my income be seen as £2000 which is the profit, or the entire £4000?



As I am just working from a laptop in my bedroom, would business rates be applicable?

Any more advantages, disadvantages or general facts please let me know.


OR

Would an LTD be the better option. I dont want anyone stealing my name. One more advantage would be claiming back VAT.

As a LTD, do I have to pay myself a salary? Or could i just take a dividend at the end of the year?

Thanks

[wholesaleguru87]

i would also be interested in the key points raised in your post

[CNDMtrade]

As far as I know from the research I have done, If your just in a single room on a computer running your business then you may not be liable to pay any charges, however the point could be raised about stock, as far as I know you would have to store stock somewhere which would mean a registered premises???

Posts on this forum have put me off a LTD company, if your small (which i think you are with talk of £6000 as part time) then its kind of pointless regsitering as LTD until you really are going somewhere. You can voluntarily regsiter for V.A.T and get the same benefits though

Dont take this as gospel though, just what I have read myself.

[successjourney]

Do search on the forum. Similar questions have been asked many times.

Make sure to keep all the records as you go along.
Sales - Purchases - Expenses associated running the business (e.g phone/internet bills,
postage, stationery and etc) then deduct a personal allowance to get taxable income.

In your example, £4000(sales) less £2000(purchases) less expenses less personal allowance = taxable income. Rather simplified but you get the picture.

Read here about National Insurance Contributions - you might wanna spend sometime reading around there.

It's a domestic accommodation. You haven't made any strucural alterations to the room in order to run the business so you will not pay business rates.

I would start off as a sold trader and see how it goes.