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How should I set myself up as a business?

This post is part of a warmup for our Startup 101 courses happening on Feb 19th and Feb 25th (as well as these dates here) – remaining spaces still available, and you can have a sneak peek at the prep book (full of useful links and resources) here

An attendee for one of the startup workshops asked the following:

“I have a question, which I’m hoping will be covered. I have a full time salaried PAYE role, which I don’t want to give up. So my intention is to run my business idea in parallel. It’s going to be fairly small scale, so the estimated turnover would be £5k to £10k per annum. From a tax perspective, how should I set things up? Would it make sense to set up my business idea as a limited company?”

I asked Darren from Crunch Accounting for his advice, and his response was as follows:

 

“We have many customers who have full time jobs and have setup a business on the side. Often the idea is to build the business to a point where they can then leave their full time job but not in every case.

 

For many reasons we believe going Limited is the right way however this level of turnover (£5-10k) is quite low.

 

Using our calculator on the homepage of www.crunch.co.uk; at £10k turnover, zero expenses (this may not be true) and £800 for the accountancy fees and software, it saves £181 per year. This is compared to being a sole trader which is the other alternative.

 

If the plan is to build this side business up then being Limited will start making far more savings, running into the £1,000′s.”

Crunch is the brainchild of three enterprising minds. In 2007 a veteran accountant, a digital expert and a mould-breaking entrepreneur came together to change the world of accounting.

This post is part of a warmup for our Startup 101 courses happening on Feb 19th and Feb 25th (as well as these dates here) – remaining spaces still available, and you can have a sneak peek at the prep book (full of useful links and resources) here