UK marketers please help with taxation question

hi there

yes you need to register as self-employed (the quickest and easiest way) OR become a limited company.

you file your tax return alongside your employed income, keeping it separate (you dont need to take tax off for employed income as this is done before you get paid). i think you need to factor in 22% in tax if you turnover under 36k in total.

Hi there,

First thing you need to do is register yourself as self-employed over at the HMRC website.

HM Revenue & Customs: First steps to register as self-employed

Next, get a good accountant. I use a local one listed under the Taxassist.co.uk website, they cost me £30 a month, but are local, available and very responsive.

Next set up a spreadsheet, different tabs for income, expenses, bank accounts etc and just make sure you keep a record of what goes in and what goes out of your bank accounts that are related to your self-employment.

Next have a chat with the accountant and explain your business to them. Mine didn't have a clue about Internet Marketing but business is business and taxes are taxes no matter what line of work you are in. Most accountants will grasp affiliate marketing and commissions etc, as well as have a knowledge of how PayPal works.

Then just wait for the money to come in, wait for HMRC to get in touch and confirm you are self employed, let the accountant handle any queries you have and away you go.

Best to have 2 bank accounts set up. One for all your income and one for your taxes. When I get income into my account I immediately remove 20% of it to the taxes account. Get into this good habit and don't be tempted to dip into the tax account as it grows - or you'll be in trouble when self-assessment comes around and you have no money in there. So if CJ deposits £100 into my account, £20 of that gets transferred into the tax account.

Hope that helps.

Jeff

You've had good advice.

Definitely register as self-employed but don't forget to check what your entitlements are. There are a lot of resources available to support people out of work and starting their own businesses.

I had a few meetings with a start-up advisory called NWES which were useful.

Thanks for the answers guys.

One more question. What if my income is not yet very much and continuous? Should I register as self-employed anyway or it's not worth the trouble until I make a steady income?

You've got a personal allowance of nearly £7k so I wouldn't start worrying about it just yet

The advice I got from an excellent accountant (before he was poached to become CFO of a private company) was "wait until you start getting some income, before bothering to tell the tax people".
It helps to get started setting up a business bank account - which takes time.
You can think up an interesting name for your 'Company' - that will appear on your cheques as 'Trading As ...'
When that happens, you can register and consider two other issues;
1. If you have low income (< about 3k / year) - you need to claim for exemption from the need to pay NI
2. If you are expecting significant income you can apply for VAT registration (you must do this if your annual income exceeds £70k - even pro rata for a monthly) and register for the Flat Rate scheme for income less than £150k
Registering means you need to charge VAT on sales but can reclaim VAT on purchases. The flat rate scheme avoids having to pay VAT on sales before you get paid and simplifies paperwork - but you need to check if you will profit from using it or not.