The idea of starting your own business is something which is becoming increasingly popular in Wales and the numbers are rising fast for people who are listed as self employed both as sole traders and Limited company’s. A high percentage of the new self-employed in areas across Wales also tend to be ‘Home-Workers’ with the evolution of the internet meaning that doing business from your bedroom or kitchen is easier than it has ever been. There are now people registered in a variety of jobs including:
If you are new to the idea of working from home and running your own business, no doubt that you will have what are some quite common questions; questions which come up often. Let me try and answer a few of these right now:
It is essential that if you make any money working from home, that you DO declare it. It simply is not worth the trouble that can come with not declaring your income. With a lot of payments now electronic such as income via PayPal, it has become much easier for the tax office to check up and audit your accounts if they choose to. Even if you are making money online or from home and have a second job, you should be declaring the income. If you have any questions then your best bet is to ask your accountant (more on accountants below).
A lot of accountants will immediately guide you towards being a sole trader, especially if you are an individual running a business. Being a Limited company is slightly more work and paperwork but there are distinct differences in the amount of tax you pay, the liability and overall I would recommend being Limited. There are other considerations also though. You can find some more useful information from the UkBusinessForum.
I have had to deal with a few accountants over the years and the quality of service can vary greatly, much like in any industry I guess. The best accountants I find (and best tradesmen in general) tend to be the ones that come recommended by friends, family, neighbours and anyone else you personally know. (I can recommend a good accountant in the Cardiff area if you need – just email me).
One of the keys to attract customers to your business if your website is your shop window, is to market your site. You can use Adwords for immediate results or you can think longer term and work on developing your site. For Adwords, you choose a number of search terms for which you wish to rank in searches for and you bid for each term for your ranking and you can set a daily budget so that you do not pay too much. You might for example sell sports gear online so you might set a £5 daily limit to spend on Adwords, you might decide to sponsor terms such as “buy sports gear” or “cheap adidas t-shirts” or any term you wish. There are a lot of tricks though to getting the most for your money. Try to target niche terms for example. If you are a local business set the ads to only show in your local area (you can do this on Adwords) and think about the time of day when you want the ads to show.
If you are really completely new to being self-employed and living in Wales, you will still come under the jurisdiction of the UK for taxes and setting up your business. An accountant can talk you through the basics but www.hmrc.gov.uk/startingup/ is one of the very best places to start. The HMRC pretty much explains everything you need to know to get started.