Limited Company

[Dishmop]

where the contractor has just one customer and therefore for all intents and purposes the contractor can be regarded as an employee of the 'customer'.

Re:- the above means ,, A self employed person subcontracting for other businesses must not do more than a certain percentage of their work with one company.

If you were selling honey you would not be a subcontractor.

If selling honey is your only means of income you should be registered as self employed with the tax man and for NI.
If you are already self employed doing other work and also selling honey but not really making any money out of doing so, put it all down on your tax returns and it might be to your advantage because of expences incurred.

Many years ago you had to register a trading name.

To start a limited company means money, an accountant/secretary, director/s, having to submit your tax returns by a certain date or get a fine.

Nah......

The tax man aint interested in a few quid you might make...
Self assessment tax return form for self employed person doesnt even ask for a breakdown of incomings and outgoings,,

What did you earn?
What did you pay out?
Any income from other sources? (and that would not include honey because you would already have included that in incomings)

 

[Chris B]

It's not income that's taxable. It's the difference between income and expenses that will be taxed. This applies to limited companies and sole traders alike.

If you are on a low income you should probably not form a limited company. Any tax credits or benefits could be compromised - reason is your beekeeping equipment is regarded as business equipment as a sole trader and is ignored in any asset calculation for you as an individual. However if you transfer it all to a limited company it becomes shares owned by you and is no longer ignored.

 

[Dishmop]

Ask Lord Sugar if he would invest in it as a company.

 

[Silly Bee]

Certain circumstances of taking in lodgers,,, but only up to a certain amount is free of tax.

If you exceed your personal allowance tax is to be paid.

Any money you recieve is counted as income towards that.

Forgetting for a moment profit/loss/ expenses etc

Income is income.

Income is taxable.

If you sell honey, and recieve money in exchange, then you should keep a book as to how much it cost to produce the honey, what your expenses were etc.

If that is not the case, then we can all set up as Plumbers, Electricians, Gardeners and say we do it as a hobby.

I will however check this out with my daughter who happens to be a Chartered Accountant.

 

[madasafish]

I am a qualified accountant - tho' retired.

unless your turnover is likely to be greater than c£75k pa, forget it.. Puts money in the hands of accountants..

On second thoughts, do it. Put money in the hands of accountants...

 

[Storm™]

Hi,
firstly "LOL - there is no such thing as a registry of sole traders."

slightly wrong there. You have to register with the inland R as a sole trader (just a phone call to the tax office followed by a letter with a form in which you have to fill out stating your expected income and business income for the coming financial year)and if like me you employ an accountant then the I/R get sent your P45. That's whether you take a wage or not.

YOU PAY NO TAX FOR THE FIRST YEAR OF A NEW BUSINESS

Once you do this they require to know your earnings. If you self assess online you are required to have your Tax returns by end of June is it now? If you use an accountant you are required to have your returns in by end of October. If its late you may be fined up to £100 per something or other.

With regard to National Insurance if you earn above the threshold you are required to pay NI contributions. If you do not take a wage you do not have to pay it. I dont. But until you submit your tax return the I/R do not know you dont take a wage. In which case they charge you the minimum. £2.22 per week. If you do not pay that - threatening letter after threatening letter. In my experience (I ignored them). After the year is nearly up they get quite worried and start sending really nasty ones. Then the tax return goes in and they say lovelly you owe us nothing. (thats because I do not earn a wage it will be different if you do)

After you have had your fun you close your business. After selling it you are required to pay capitol gains tax. But you only pay this on everything over what you paid out as a start up cost and value of what stock you have left unsold. So if you sell for 20,000.00 and your start up costs were 10,000.00 and your equipment is worth 5000.00 and you have 5000.00 of unsold stock you owe nothing. And this also has a threshold. If after you deduct everything if you walk away with less than (i think its 10,000.00) you owe no CGT. Just on anything over this value after deductions.

To become Limited you require to have an annual turn over of i think the threashold went up from 35,000.00 to 54,000.00 per year. You can volunteer to become limited but it has no financial benefits until you have a turn over higher than that threashold. All it basically means is that if your business venture folds you cannot be held personally liable and your debtors go wanting. But you have to satisfy the threashold value of turn over of 54,000.00

You are exempt from paying tax on produce sold from your drive (honey, cakes, veg) - there was a neat little case where an over zealous IR inspector tried to have done "marge the housewife from little basset" (whatever her names was where ever she lived - was on the BBC news). She was selling her surplus on her drive from a table. She received a retrospective estimated tax bill for her suspected proceeds. She fought it and won because she was selling her surplus to local people. She was supporting the local people at a below market value for the produce. In essence it was worked out that had they taken her to court prosecuted and fined her, it still would not cover the cost of what it took to get her there. The fine value being related to the pittance she was making from the honey/veg etc. So a common sense motion was passed to turn a blind eye as it were. And this was brought up some time later in the commons and Tony B just laughed and said "I have no intention of chasing someone down if they want to sell their surplus at the end of their drive - by the time their time/outlay/other costs are taken into account it would probably mean that we might owe them" or words to that effect.


If you have any sort of commercial business where the public are involved you are required to have public liability insurance.

These rules are by no means exact just what I have picked up over the last few years.

The person I bought the business from had a few employees but she paid them virtually nothing. She contacted the Job Center and they gave her employees on a back to work scheme. This meant she paid about a fiver of their 35 a day wage. The job center paid the rest.

Hope this helps.

 

[Repwoc]

firstly "LOL - there is no such thing as a registry of sole traders."

slightly wrong there. You have to register with the inland R as a sole trader

If you become self-employed you have to tell HMRC for tax purposes but that applies to all self-employed people not just sole traders. There is no registry of sole traders as such like there is a registry of limited companies.

 

[Storm™]

Specifically when you ring the tax office to say Hi I will be the owner of this business now they asked me:

Will you be self employed - yes
So you will be a sole trader - yes

The definition is separate and you do have to specify that you are. And you also have to specify that when you get your public liability insurance.

 

[Dishmop]

I am sure that money you get from lodgers under what I think is called the rent a room scheme (what else) is not included as part of your income up to somewhere about £4000. Its a government thing......
Its probably easier for them to let you have it than it is to employ inspectors to work out profit etc.

 

[Storm™]

I am sure that money you get from lodgers under what I think is called the rent a room scheme (what else) is not included as part of your income up to somewhere about £4000. Its a government thing......
Its probably easier for them to let you have it than it is to employ inspectors to work out profit etc.

There are also regional exceptions of all kinds with renting a room out or having a B&B. Here in Cornwall and I think Devon as well you have to comply with less regs than elsewhere. I know 1 of them was that in Cornwall you if owning a B&B only had to have a certification of your boiler to say it was safe and you could have up to 6 residents and that was the only regulation you had to abide by. It was because so many people were going out of business because of all the red tape that Cornwall Council realised it was hurting the counties biggest income - tourism. So they relaxed loads of regs which people now exploit.

 

[Dishmop]

Taking in lodgers is not a business, whereas B&B is, so different thing altogether in the eyes of them that must be obeyed...

 

[Storm™]

Taking in lodgers is not a business, whereas B&B is, so different thing altogether in the eyes of them that must be obeyed...

I know was jus sayin lol

 

[drstitson]

tax and bees

perhaps if we all had eastern european bee sheds at home then we could regard the bees as "lodgers" and the honey/wax given in lieu of rent.

so nay income made from it would then not be taxable!

 

[Repwoc]

Specifically when you ring the tax office to say Hi I will be the owner of this business now they asked me:

Will you be self employed - yes
So you will be a sole trader - yes

The definition is separate and you do have to specify that you are..

Yes I can understand that. They probably want to know if you have a business partner (or several ie a partnership) because in law each partner is "jointly and severally liable" for the debts of the partnership. That means if you or your partner fails to pay up they can chase all the other partners until they get their money.

And you also have to specify that when you get your public liability insurance.

What's that got to do with the price of fish? Insurance companies ask all sorts of questions. Probably they asked you how many employees you had too - also totally irrelevant to this discussion.

 

[Storm™]

What's that got to do with the price of fish? Insurance companies ask all sorts of questions. Probably they asked you how many employees you had too - also totally irrelevant to this discussion

Well the fact that it is a discussion makes its relevance apparent as matters arise. The reference to the liability insurance people requiring a direct answer to the sole trader question was to highlight that it was not only the I/R who use that term or require you specify what you are.

As to a connection with this and the price of fish I do not see one. But then I do not see a connection with the price of fish to the matters in this thread. Unless you are curious

http://www.fishnewseu.com/prices.html

 

[Repwoc]

Never mind it doesn't matter anyway.

 

[Silly Bee]

OK,

From a practicing Accountant, not retired.

If you sell honey, and recieve money, you are earning and is taxable

If you put up a sign to say you have honey for sale, the postion is even more clean cut.

Selling the odd jar to friends and family, and chances are the Inland Revenue will do nothing.

If you want to avoid the taxation, keep books.

 

[Rosti]

If you want to avoid the taxation, keep books.

I've been watching this thread. Surely Silly Bee has summarised this in a line?

You get taxed on profit not turnover (I run a VAT reg ltd company [set-up was unrelated to beeking] and have kept a bee balance sheet in case profits are 'inspected'. I sell via my Ltd Co to minimise personal liability - which you cannot do as a sole trader in the same way). Make sure that cost of manufacture includes your travel costs as p/mile, proportionate property running costs etc if you are extracting in your kitchen and storing in your garage etc.

I am pleased to say that since starting beekeeping I am a mere £1123 in the red overall but was £128 in the black on the year. In 10 years time I look forward to having to give all my honey away to avoid incurring tax liability - better still a nice copper smoker and a new suit that year

For most of us I suspect that taxable honey income is not an impending predicament

 

[Silly Bee]

If you keep books, you might even get a rebate if you pay tax under PAYE.

Thats of course if you go down that route.

My last jar of honey would have been costed out at about £500 (First year setting up costs, time etc etc.)

As someone here will tell you, "If you want to make a smalll fortune from beekeeping, start with a large one"

 

[Rosti]

As someone here will tell you, "If you want to make a smalll fortune from beekeeping, start with a large one"

Now then! I was on your side right up to the point you posted that rediculous statement.

" Darling wife, in case you are reading this; Silly Bee knows nothing, the fact our bank balance has dropped is because of fast cars and fast women, the 'investment' in beekeeping over recent years has been wholey incidental."