Ok I know that you dont have to pay VAT until you hit 50k/annum.

But what about income tax?

Do you have to pay that on your profit made from the NET?

How does that work?

Same with national insurance I guess!

the net is not a "place of business" per se. I'm not from the UK so I may be wrong, but Internet type sales are generally treated the same as telephone and mail order sales are far as taxes go.

Small businesses can now earn up to £10,000/year profit tax-free.
Personal income tax is tax-free up to about £4500 if you pay yourself from the business.
I suggest you get an accountant if you're going into business, it won't cost much if it's small and they don't have too much work to do.

VAt is now 56k, or is it 54k ? Anyway itr's more than 50k.

Yes you do have to pay tax and NI, but it all depends on how much 'your company' pays you etc.

Are you a sole trader? Under 18?

sole trader over 18

Go talk to an accountant and they can sort you out. They will give you all the info you need, and save you being caught out by the tax man!

Yes you will have to pay tax on any *profit* that you make.

That said if you're just getting started you don't have to do anything about it yet - there's a grace period of a year or so before you have to tell them, just keep accurate records of all incoming and outgoing and talk to an accountant when you're ready.

Also you don't really need a fully fledged accountant - many bookeepers will do your tax returns, same job for half the cost.

Tax is actually not as scary as you might think, get advices from the taxman, we've been in business 3 years and not neede an accountatnt - do our own with the aid of the taxcalc software.

Yes I did that for the first time this year.

Basically I had one employed form and one self employed to fill out.

And you only pay tax on the PROFIT. But you must have receipt and invoices for everything otherwise you can't claim it as an expenditure... and it should be logged in a cash book somewhere.

Actually the internet self assessment is good, it's very easy to follow and even checks for errors as you go. You'll need to prepare in advance by contacting the Inland Revenue for your tax code (if you've never self declared yourself before).

If you're a limited company you need to have an accountant though as you need to declare your accounts to companies house

That said if you're just getting started you don't have to do anything about it yet - there's a grace period of a year or so before you have to tell them, just keep accurate records of all incoming and outgoing and talk to an accountant when you're ready.


Dont listen to that, you get fined if you dont start paying NI contributions within 3 months of starting a business.