Setting up whilst working full time

[Coultassam]

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Good afternoon everyone.

So im currently working as a multi skilled engineer in the food production industry.
Im a qualified electrician with most of my qualifications apart from 2391.
Im looking to set up and go self employed offering domestic,industrial and agricultural services but want to set everything up and get the business running whilst still working full time at my current job. I have the time to do this but have a few questions.

1. What company should i set up? Sole trader or limited? I want to do the work for the business but not take a wage from it till i swap to working full time on it all the profits will be put back into the business.

2. Is it worth me getting my 2391? And why if so?

3. What insurances will i need?

Ive never been self employed and im finding different things i find on the internet contradict each other and can find a clear answer.

Thanks for any help

 

[i=p/u]

Hello, That's your choices sole trader or Ltd company. . I personally would get the 2391 or equivalent due to some wack asking for it or you sub off a company which want it...

As for insurance, liability as standard and indemnity if you carrying out testing and giving out advice.

you might want to join a scheme too?

 

[Gavin John Hyde]

With a ltd company you need to allow for several hundred to 1k for added costs such as accounts etc...
Also need to consider you will pay employers NI on anything you pay yourself so speak to an accountant. To begin with you may find it easier as a sole trader.
A good accountant will always save you more than they cost. Mine does...

 

[SJD]

As mentioned above, with a Ltd company you need to allow costs for an accountant - in my case, this currently costs me £600 per year.

You can pay yourself just under the primary threshold and have no national insurance to pay (currently £823 per month). Then you can pay out profit - after corporation tax (at 19%) - as a dividend - to shareholders - which might be just yourself, but might incude e.g. your partner. There used to be quite an advantage in this route, but the dividend tax introduced a few years back meant this is really no longer the case. But there can still be an advantage if you pay dividends to someone e.g. partner who has no other income.

You have to do the sums (the rates & thresholds are all on the HMRC web pages).

 

[kropaske]

1. What company should i set up?

This will depends on few things such as how long you are planing not to draw any wages from it, how much you earn now and what is your estimate income from your new bussines?

If you go sole trader anything you earn will attract tax and national insurance as your likely used your tax free allowance with your regular income. Also depends on how much you earn at the moment and what's your estimate from your bussines total can brings you to higher threshold of 40%

If you go LTD and won't draw any wages then no national insurance is due and no risk of getting into higher threshold of 40% since its the company earn money and not you.

As metion before cost of running Ltd company may be slightly higher if you hire accountnant but you still need one for sole trader. However in both cases you can do all by yourself and for micro bussines its really not that hard.

.. Is it worth me getting my 2391? And why if so?

Yes, it's alway good when you continue to develop and gain more knowledge and it's another qualification under your belt. Also you can offset cost against tax.

3. What insurances will i need?

As mention above minimum Public liability of at least 2M, however if you planing to subcontract you may check with the company what they actually require. Additionally professional indemnity if you planing to do EICR' s

 

[kropaske]

Also need to consider you will pay employers NI on anything you pay yourself so speak to an accountant.

This depends on structure of your company and how you draw a money from it. In most of the cases for 1-2 directors you won't pay any NI. Also there is £5000 allowance for employers

 

[i=p/u]

Ye can get 2k a week working for someone but satisfying doing your own ----, go for it

 

[Coultassam]

Thanks everyone for your replies .

Ill speak to an accountant.

i dont want to take a wage from the business as im already jist below tax threshold for my current job.

Ive seen online based 2391 courses. Is there any benifit to doing a classroom based course over doing it online as they cost more money ? For practical practice i have plenty at my current job that i could use to practice.

 

[Midwest]

How much work do you have to go self employed? Have you asked your current employer, if they have any objections, you having your own business?

 

[Coultassam]

How much work do you have to go self employed? Have you asked your current employer, if they have any objections, you having your own business?

At the moment none i will be looking to build up my client base over the space of a year or so whilst still working and when i feel that i have enough contacts and steady work coming in ill switch to the business full time.

My contract at work says nothing about me not being able to have another business aslong as it wouldnt make me a direct competition to them. But as i will will still be doing my contracted hours with them and all the business will be done in my time i dont see a problem.