Are there any UK laws of legal issues i should be aware of when launching my hosting business?

Do i just simply need to declare the amount i have earned for tax reasons, or do i need to offical register the company name? set up a company bank account? set up a company snail mail address?

At the moment im looking at having good terms and conditions on my website (hence covering any problems that i might have with clients) and also declaring (at the end of the tax year) the amount of profit/income i have made from my hosting. Do i have to do any more than this???

I would suggest speaking to a local accountant, they can view your business plans and give you advise on how to run the business. A limited company would probably be the best option, but that's just my opinion, not that of a professional adviser.

A sole trader is going to be easy to administer from a tax and administrative point of view.

A ltd company is going to protect your personal liability. I think this is *pinnacle* in this industry.

If you've not already done, you should already have told the Inland Revenue you are self employed. It doesn't matter whether you haven't made any money.

Really, your best bet is to talk to an accountant, or better still check your local business support- the business link or whatever it's called ;)

Best of luck.

You have to register with HMRC as being self employed within 3 months from when you first become self employed.
You will then have to pay National Insurance Contributions, unless you expect your income to be below the threshold (don't remember the exact figure but it's about £5000).
Also if you expect your income to be above £60,000 then you will need to register for VAT.
HMRC have a free helpline available, they can tell you all of the details and send you the necessary forms. The number is 08459 15 45 15. Or you can visit their site at www.hmrc.gov.uk

If you register as a limited company, things get alot more complicated, as you have to submit annual returns and annual accounts to Companies House (and pay a fee each time). A limited company would however mean that your liability is limited, as the name suggests. If you have £100 of shares in the company for example, it means you are liable for no more than £100. A limited company doesn't have to pay tax unless annual turnover is more than £10,000 (or something like that). But you still have to pay income tax on the money you pay yourself from the company. And NI contributions too. Basically, with a limited company, comes alot of responsibility. So for that reason it is probably going to be best for you to start off a sole trader. However, I highly recommend you contact your local Business Link in England (www.businesslink.gov.uk), Business Eye in Wales (www.businesseye.org.uk), or Business Gateway in Scotland (www.bgateway.com)

They will be able to give you all the advice you need regarding your business, have loads of free resources available, and free courses, including free courses in accounting & marketing. They can also tell you about any free grants or awards that are available to you. If you are in an area with low employment, especially in Wales or Scotland, there is likely to be a reasonable amount of funding available to you, especially if you have been unemployed for a while.

You have to register with HMRC as being self employed

Right... cause im still looking at keeping my current job for the time being until i get my hosting business off the ground. Am i not allowed to just fill out a tax evaluation form at the end of the year for the time being and then register with HMRC when im up and running and able to leave my current job?

This is where someone says you cant run a web host whilst ur working somewhere else... the answer to that is i can monitor my hosting company from where i work...

Right... cause im still looking at keeping my current job for the time being until i get my hosting business off the ground. Am i not allowed to just fill out a tax evaluation form at the end of the year for the time being and then register with HMRC when im up and running and able to leave my current job?
Even though you are employed by someone else, you are still going to be self employed as well for your hosting business, so you are still required to register within 3 months, and pay self employed NI contributions on top of your normal PAYE contributions if required. You will also pay income tax on your profits from the business.

This is where someone says you cant run a web host whilst ur working somewhere else... the answer to that is i can monitor my hosting company from where i work...

A GPRS phone & PDA will allow you to run your business from anywhere, however best to check your current contract to see if it has any clauses that would prevent you from running the business.

Whatever income you have (from whatever source) is required to be notified to the tax man, however as others have pointed out, a business needs to be correctly registered, hence my suggestion to seek an accountant or local small business adviser.

Would really advise you call the Business Link.

They were fantastic a number of years back when I first started.

Cheers for all the info, ive got plenty of time to get this sorted out cause im working on getting the domain up and running and the site finished first, so ive got till at least the middle of this year until the offical 'launch'.

I went for a meeting with a business link person about 1 year ago and oh my god was that just a waste of time....

I'm sure theres some genuinely kind and helpful business link persons but mine was just an arrogant know it all wwho thought i was doomed or something

Am i not allowed to just fill out a tax evaluation form at the end of the year for the time being

Once you start trading in any capacity, you should inform the taxman who will then start sending you Self Assesment tax forms. Regardless of whether you make any money or not, you'll have to do this. (do it, the last thing you want is for the taxman to find out, decide you earned £40k a year and ask for backtax.. with the onus on you to prove you didn't).

Sole trader status is pretty much just the above - you say 'I'm self employed', fill out the SA tax form and everyone's happy, until you earn more than the VAT threshold (£75k I thought).

Sole trader status is pretty much just the above - you say 'I'm self employed', fill out the SA tax form and everyone's happy, until you earn more than the VAT threshold (£75k I thought).

£75k would be lovely but i seriously dont think ill get anywhere near that... its a budget host ill be running so ill be lucky to earn a few thousand £'s and that definately wont be in the first couple of years!

gbjaanb have sent you a pm...

Once you start trading in any capacity, you should inform the taxman who will then start sending you Self Assesment tax forms. Regardless of whether you make any money or not, you'll have to do this. (do it, the last thing you want is for the taxman to find out, decide you earned £40k a year and ask for backtax.. with the onus on you to prove you didn't).

Sole trader status is pretty much just the above - you say 'I'm self employed', fill out the SA tax form and everyone's happy, until you earn more than the VAT threshold (£75k I thought).

It is £60k in any one tax year. And you can still be self employed (or a sole trader) and pay VAT. VAT and income tax are two completely different things, to be treated completely seperately.

Just looked: for a soletrader, with no VAT reg, and no employees. all you have to do is:

* register with HM Revenue & Customs as self-employed
* complete a self assessment tax return every year
* Pay Class 2 and Class 4 National Insurance Contributions (NICs)

There are other laws you'll have to comply with - particularly the Data Protection laws (if you keep your client's names/addresses on file for hosting or billing them). £35 a year for that.

There is also the newly introduced Data Retention directive that you need to be aware of.