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  1. #1
    Join Date
    May 2004
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    Running a business in the UK

    A lot of people get worried about this, so I thought I'd give my advice.

    If you dedicate your career to running a webhosting business, and work on your own then legally you can run your webhosting business without registration and without tax.

    And if you earn less than £55,000 in a year, you do not even have to register to pay V.A.T.

    Simply hire an accountant (£150.00 for an appointment perhaps) and setup your website. Then you're rolling.

    Oh, and there's no age limit if you're a sole trader and all you need is a personal bank account with a SOLO card (see Natwest.com) - you can enter contracts at any age (as they simply exist to legally bind you to something) - this is shown by the fact that you enter into a contract (according to UK law) every time you buy a chocolate bar!
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  2. #2
    thanks for the info but there are many different bits of contradicting information floating around the board about these issues.

    What is your source of this information? are you an accountant yourself or have contacted the Inland Revenue? I just want to make sure this is the correct info

  3. #3
    Join Date
    Mar 2004
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    England
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    Well we're a Limited company here in the UK, it gives us peace of mind in lots of ways

    Andrew
    NetHosted - UK based hosting solutions.

  4. #4
    did you get an 'off the shelf' limited company?

  5. #5
    Join Date
    May 2004
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    We currently see an accountant once a month re: our financial situation who contacts the Inland Revenue on our behalf.

    Customs & Excise have also supplied us with an information pack regarding V.A.T.

    If you're a limited company, I believe the rules change with declarations (I think you have to declare your income as a business as well as an individual). I'm not certain re: LTDs.
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  6. #6
    Join Date
    Dec 2003
    Location
    UK
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    Note: I think you'll find that the VAT is turnover of ~£55K, not earnings.

    Also, if you intend selling service to business, then you might want to consider being a VAT registered Ltd company a this tends to offer more credibility to your business.

  7. #7
    Join Date
    Mar 2004
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    England
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    Originally posted by flush()
    did you get an 'off the shelf' limited company?
    No, we didn't go down that route

    Andrew
    NetHosted - UK based hosting solutions.

  8. #8
    Join Date
    Dec 2003
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    UK
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    I created my company about 7 years ago through a local solicitor / company registration specialist and the cost was the same having the company created for me as buying one off the shelf and changing the names etc...

  9. #9
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    May 2004
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    My most sincere apologies regarding the VAT figure. I do not pay VAT and am unaware of the strict rules
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  10. #10
    Join Date
    Mar 2004
    Location
    Edmonton, Canada
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    Another point to mention (espeacially for younger people) is you do not have to pay income tax if your total (ie from all income) earnings are less than £4500 (cant remember exact number - its something stupid).

    If you're worried about the tax issue, just ask the Inland Revenue for a Self Assesement Form and fill it in honestly. They'll soon tell you if you owe them anything
    laslo.ca
    Quality Canadian Web Hosting

  11. #11
    Join Date
    Dec 2003
    Location
    UK
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    Note that Tax is not National Insurance, you may still be liable for NI payments. You need to check with an accountant or direct with the local tax office.

    All the figures should be on the respective web sites for these agencies.

  12. #12
    Originally posted by robdavy
    Another point to mention (espeacially for younger people) is you do not have to pay income tax if your total (ie from all income) earnings are less than £4500 (cant remember exact number - its something stupid).

    If you're worried about the tax issue, just ask the Inland Revenue for a Self Assesement Form and fill it in honestly. They'll soon tell you if you owe them anything
    its £5000

  13. #13
    Join Date
    Apr 2002
    Location
    West Yorkshire
    Posts
    1,357
    Originally posted by flush()
    its £5000
    It varies on what your tax code is. That depends on the amount you earn and if you have a company car or other taxable benefits. Some people have something called K code which means that you pay tax on everything and more on top of that.
    -- Matthew

  14. #14
    Join Date
    Feb 2002
    Posts
    68
    Or even more.
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  15. #15
    Join Date
    Mar 2004
    Posts
    1,301
    DroveNet you or anyone operating outside UK wont have to worry about Value added taxes its only for companies operating from within UK.

  16. #16
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    I'm sure that was slightly patronising - I am fully aware of the VAT rules, I am currently registering a limited company within the UK.
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  17. #17
    Join Date
    Apr 2003
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    UK
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    Re: Running a business in the UK

    Originally posted by DroveNet

    If you dedicate your career to running a webhosting business, and work on your own then legally you can run your webhosting business without registration and without tax.
    Are you saying that if you're working for yourself you don't have to pay income tax? As that's plain wrong, and is contradicted by a statement you made later in the thread. Or do you mean VAT? To me, tax means income tax rather than VAT as it's always referred to as VAT in the UK.

    Please let me know if I've misunderstood something.

    Do you have any advice to offer on liability insurance? and may I ask how much you're monthly accountants meetings cost? / last? (If it's not too personal).

    TIA

  18. #18
    Join Date
    Apr 2003
    Location
    Bluesquare dc, Uk
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    I have to say, as an owner of two limited companies all I do is let the accountant deal with this. My wife (an accountant also) keeps her eye on dealings and advises me accordingly so that I know the overall picture.
    Olly | INX-Gaming
    Call of Duty 4 hosting

  19. #19
    Join Date
    May 2004
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    United Kingdom
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    Whenever I mean tax in the context of business I mean corporate tax (ie, V.A.T.) - if you have a turnover of £10,000 you are liable for such items as Capital Gains Tax etc.

    (For the last time - I AM FROM THE UK!)

    Insurance wise, I would take complete business insurance - this should include at least Public Liability. If you are an employer of more than 2/3 people then I advise you also take out Employers Liability.

    Public liability will protect you against your liability to the public (ie, if someone trips on a screwdriver you left at the front door of your office) and employers liability protects you against your liability to employees (ie, if they injure themselves due to a lack of safety provisions on your part (eg, electrical shock from server when they should be supplied with a earthed line).
    This insurance does not alleviate your responsibility but protects you from most, if not all, fees and funds that would be involved in a claim if you were found to be liable.

    Normally you have public liability for up to £5,000,000 (£5 milliion) - I would suggest the best cover you can get that you can afford.

    I wouldn't be able to tell you about fees for accountants appointments, although my appointments with him (quaterly) are usually around an hour and a half. My Billing Manager (soon to be Financial Director) deals with the rest.
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  20. #20
    Join Date
    Apr 2003
    Location
    UK
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    210
    Sorry, when asking about the insurance, I was meaning more along the lines of somones business suffering due to a server being down, or data being lost. Or, do you just cover this in the T&C?

    Thanks

  21. #21
    Join Date
    May 2004
    Location
    United Kingdom
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    Just cover it in the T&C - although according to UK law, if you do not provide the service you're liable to give them a refund. You don't have to pay compensation - just refund them IN FULL if the service is down.

    See the Supply of Goods and Sales Act for more information.
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    Aaron Ferguson - Administrator
    DroveNet Services - www.drovenet.com
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