Setting up a company?

[Woodsey]

Hi All, having always been a bitch employee of the system I am clueless.com about this.

My other half plans to offer before and after school care from home after getting the relevant qualifications. We obviously want to do things above board and most importantly make sure she is paying the relevant tax and most importantly NI. It will probably be borderline whether she reaches the min tax threshold, but I want to make sure she makes the appropriate payments for NI so she doesn’t miss out on contributing towards govt pension.

What’s the best way to do this? Thanks in advance 

[Marky147]

Think it's just a case of registering her with HMRC for self-assessment.

Don't think she'll know what C4 she has to pay until she puts a return in for, but can do C2 from as soon as she starts.

Definitely worth checking with them on the website, as I might be wrong

[Marky147]

Pick a fancy company name, too.

[EvilPie]

I doubt it'll be worth setting up as a Company unless she plans on employing others at some point soon. I imagine setting up as a sole trader would be preferable and save quite a lot of money as you don't have the same accounting costs. 

From what I know you can pay in to your state pension easily enough if you're a sole trader and you can even top up in later years to get your full allocation if you want to.

Loads of good stuff about the state pension here: https://www.moneysavingexpert.com/savings/state-pensions/

Main bit of advice would be to speak to an accountant to make sure she does whatever's most efficient with regards to tax.

[doubleup]

Although only of slight relevance, class 2 nics are being abolished next year

https://www.gov.uk/government/publications/abolition-of-class-2-national-insurance-contributions/abolition-of-class-2-national-insurance-contributions

[SuuPRlim]

companies made simple - costs £50, takes a day, open a bank account, keep all receipts records of payments in/out and then hand everything to an accountant  at the end of the yr. If you're organised its incredibly simple, to do a thorough job, keep your tax bill sensible and to keep everything in line with hmrc requirements you'll pay te accountant £600-£1500 depending on how complicated what you're up to is

[Doobs]

Sure Evilpie is right, there is little point in paying an accountant if yoh are scraping into paying tax.  Just be a sole trader.   If at some stage she starts earning more, she can set a company up then. 

[Woodsey]

Cheers guys, yep won’t be paying an accountant, I’d be surprised if she even got over the min tax threshold tbh.....

[BulldozerD]

Seems like having a company for this level of income would be overkill and not worth the extra compliance costs.
Just start off as self employed.

Can register online with HMRC and notify them by October in the tax year following the year in which she starts “trading”

[SuuPRlim]

yeh no point setting up a ltd company if accountants bills will = 10% of your income, best thing just sole trader run through a personal account and just keep every receipt for all expenses and record all the invoices etc then if you ever unsure if you're submitting the right tax stuff can just take it all to a book-keepr and get it double checked. Just stay organised and everything is good

[buffyslayer1]

Cheers guys, yep won’t be paying an accountant, I’d be surprised if she even got over the min tax threshold tbh.....

Most accountants do a free of charge consultation with you to discuss what the best way of setting up would be. You could just get the advice and not use them tbh