The Digital Software Companies for video conferencing predicted a boom in the industry. But nobody knew that the boom will come as a result of the outbreak of covid-19.
It is surprising how the world has adapted to this change. These days even the follow up appointments of the new born babies are being done online.
However, certain businesses like high street luxury retail shops, restaurants had to furlough their employees as they don't have any work for their employees and their businesses are not running. Other self-employed individuals who simply cannot work from home for example the cleaning ladies, builders might be looking for ways to earn more money to meet their ends.
In the following blog, I have discussed the online businesses that can be started and the tax implications.
Baking Courses- Amy who was working in a café was furloughed by her employer. To make some extra money she knew she could use her talents and skills to make money. She came up with the idea that she could give online classes for baking. These interactive sessions attracted many. She did some planning, advertised on social media and here she is making money by doing live baking courses for different age groups. These one course for the kids, the other one is for adults beginners and one is for professionals as well.
Storytelling and interactive sing along sessions – Sarah who worked for an event management, after being asked to stay at home because there was no business started interactive story telling sessions, it has attracted many working parents who are concerned about giving some quality time to their children. 'These sessions won't let them feel too isolated' said Sarah.
You can also think about your talents, skills and hobbies which you can use to make some extra money. But if you are starting a new business you will have to consider the tax and accounting implications.
First question that comes in the mind is 'Do I Need to register will HMRC? 'Yes, you will have to register with HMRC and will have to fill in self-Assessment tax return.
You will have to register your business with HMRC. You might want to set up as a sole trader, limited company or a partnership (if there are 2 or more partners in the business. The tax implications and accounting responsibilities of each of them are different. However, For online businesses you are most likely be running the business as a sole trader if you are running a business as a sole trader and you have earned more than £1000 in the previous tax year you need to register yourself , fill the self-assessment tax return and send it to HMRC. The deadline for paper forms of self-assessment tax return is 31 Oct and for online forms it is 31 Jan. So for example, if you are thinking of setting up a business now and expecting the sales in this tax year to be more than £1000 you can register with HMRC and fill in the self-assessment tax return by 31 Oct 2021 for paper form and online by 31 Jan 2022.
It is very important that you keep all your documentation right. Keep all the receipts of the expenses even the expenses that look very small for example buying stationery or some big expenses like buying a computer or a certain software that you will use in the business, certain training that you have done that is essential to run this business. If you have the proper record of all these expenses you will be able to claim the expenses very confidently without being flagged by HMRC https://www.taxaccolega.co.uk/services/taxation.
If you need any information related to furlough, please contact Taxaccolega Chartered Accountants who are based in Croydon and Southall on 02081270728 or email us at info@taxaccolega.co.uk.