How to set up as a Self Employed Keepsake Business

How to set up as a Self Employed Keepsake Business

Author : Michelle Williams

If you have recently attended one of my Life Casting Courses or Keepsake Jewellery Courses to learn how to start your own Baby Casting Business or Fingerprint Jewellery Business, one of the first questions you are probably going to have is "How do I choose a legal status for my business?" and "How do I register as a Self Employed Sole Trader?" and "How do I tell HMRC that I am Self Employed?"  These are all important questions which I will try to address for you now.

How to Set up as a Self Employed Sole Trader

As I described in my blog article about choosing a legal status for your Keepsake Business, the quickest and easiers way to get started is to set up and register as a Self Employed Sole Traders.  So, within this blog article, I'm going to highlight some of the major things that you need to know and consider when setting up as Self employed, including:

 

  • How to register as self employed
  • Starting a business from Home
  • Selecting a Trade Name
  • Tax, national insurance and VAT implications.
  • Employing staff
  • Book keeping and accounts
  • Business location considerations, i.e will you be home based, mobile or have business premesis and what are the implications of each option..
  • Business name selection and registration

Setting up your Keepake Business and operating as a self-employed sole trader, is the simplest and quickest way to start your Baby Casting Business or Fingerprint Jewellery Business. There is less paperwork to do.  There are no registration fees to pay. Record keeping and accounting is straight forward and there are many benefits of being self-employed.  But In order to legally set yourself up as a self-employed sole-trader, there are several things you must do:

  • Register as self-employed with HMRC. Go to www.gov.uk/set-up-self-employed
  • Obtain any permits and planning permission that you may need from your local authority for operating your business from home.
  • Contact your local authority to find out whether you need to pay Business Rates.
  • Contact HMRC to register for VAT if you expect to have a turnover which reaches or exceeds the VAT threshold. (Currently £85,000 pa.)
  • Set up a book-keeping system.
  • Put your name on all your business stationery, including letters, invoices, receipts and cheques, along with your Trading Name.  i.e Jane Doe, Trading as .......


If you need any extra help and guidance, both the Business Support Helpline and The Citizens Advice Bureau provide additional information on a wide range of self-employment topics and give a list of other organisations to contact for specialist advice. I therefore recommend that you get in touch with both of these organisations, for further help and advice in legally setting up your business, working from home and registering as self employed.

Working from Home

If you are planning to operate your business from home, there are a few things that you will need to check, such as, if you are liable for Business rates.  If you intend to use a small part of your home for business purposes, you will not generally have to pay business rates. However, there are some circumstances in which you may have to pay business rates, in addition to council tax. For example, if…

  • Your property is split into domestic and business parts, for example in the case of a flat above a shop.
  • You sell things to people who visit the property.
  • You employ anyone at your property.

If you are in any doubt as to whether you should be paying business rates, you should contact the Valuation Office Agency.

Next, you will neeed to check if you need to get any Planning Permission with the local authority. You may need to get planning permission to set up a business at home, for example, if your business could cause nuisance to your neighbours, or if you intend to do any building work to adapt your home. Again, If in any doubt, contact the planning department of your local authority to check..

Finally, Check that there are no covenants or restrictions, in the deeds of your property, that would prevent you from running a business from home. if you are not a home owner and rent a property, check your rental or lease agreement and speak to your landlord.

Deciding on a Trading Name

As a Self employed Sole Trader, You can trade under your own name, or choose a business name. For example. "Creative Crafts."  However, If you decide to use a business name, you must make sure that your business stationery displays your name, as well as the trading name of the business.  For example, make sure that your forename and sir names are included alongside your trading name. i.e, "Jane Doe, Trading as Creative Crafts."


Your trading name can’t be exactly the same name as another registered company’s name. So, Search the register on The National Business Register or Companies House first.  

Self Employed Tax Matters

  • To set up as a sole trader, you will need to Register as a Sole Trader and for Self Assessment.
  • You will have to pay income tax on any profits from your business.
  • You must file a self-assessment tax return each year, detailing your income and expenses.


National Insurance

You will usually pay 2 types of national insurance contributions, if you are self employed. At present for 2020 this is:

  • Class 2 if your profits are £6,365 or more per year
  • Class 4 if your profits are £8,632 or more per yea
  • You work out your profits by deducting your expenses from your self employed income
  • How much you pay: As it stands for 2019-20
  • Class 2: £3 per week / Class 4: 9% on profits between £8,632 and £50,000 2% on profits over £50,000

For more information go to: www.gov.uk/self-employed-national-insurance-rates

VAT

As of the time of writing this article (August 2020) The VAT threshold is £85,000.  Therefore, If your Business has, or you expect it to have, a turnover of in excess of £85,000 a year, you must become VAT registered.  Your VAT responsibilities, effective from the date of Vat Registration, include:

  • Charging the right amount of VAT to your customers.
  • Submitting VAT returns, every three months
  • Keep VAT records and a VAT account
  • Pay any VAT due to HMRC on time
  • Most VAT registered businesses that earn over £85,000 must also follow the rules for making Tax digital for VAT

Whilst you are waiting to become VAT registered, you cannot charge or show VAT on your invoices until you get your VAT number. But you will still have to pay VAT to HMRC for any period where your turnover reached the threshold.  For more information, visit:  www.gov.uk/vat-returns  
 

Hiring Employees

Sole traders can hire staff just like any other business. There are seven things that you must do when employing staff for the first time:

 

  1. Decide how much to pay someone. You must pay at least the minimum wage.
  2. Check if someone has the legal right to work in the UK. You may have to do other employment checks.
  3. Check if you need to do a DBS check. (formerly CRB check) If you work in a field that requires one, i.e with vulnerable people.
  4. Get employment insurance. You will need employers liability insurance as soon as you become an employer.
  5. Send details of the job (including terms and conditions to the employee. You will need to give them a written statement of employment if you are employing them for more than 1 month.
  6. Tell HMRC by registering as an employer. You can do this upto 4 weeks before you pay your new staff.
  7. Check if you automatically need to enrol your staff into a workplace pension scheme.

You can get more information on your responsibilities when hiring staff at: www.gov.uk/employing-staff  

Keeping Financial Records

You must keep all the financial records you will need to fill in your tax returns. Make sure that you keep all receipts for sales and expenditure and that you create a system to keep track of your records. This can either be a spreadsheet, accounting software or a simple folder, containing all of your receipts and invoices. It doesn’t matter what system you use, so long as it works for you and that you keep it regularly maintained and updated.

If you are new to starting a Baby Life Casting Business or Fingerprint Jewellery Business and you need a little extra help in starting, launching and growing your Business, I have over 20 years Business and Marketing experience in the Life Casting and Keepsake Business Sector, which I'd love to share with you.

Apart from offering a market leading series of Life Casting Courses and Keepsake Jewellery Courses, I also offer a growing collection of Business and Marketing e-courses, designed to help you Start, Launch and Grow your Keepsake Business. I also offer a range of "Done for you' Marketing Services", to help with building your Brand Identity and Website.

I hope that this information is of value to you, but if you have any further questions, please message me and I'll be happy to help!

If you are right at the begining of your journey of considering starting a Baby Life Casting Business or Keepsake Jewellery Business, check out the additional links and resources below and register for my FREE Mini Course on "How to Start your own Creative Home Business."
 

Links

http://go.thecraftecademy.co.uk/creative-home-business

http://go.thecraftecademy.co.uk/timeandfreedom