Setting up an individual business with PayPal?

caff

caff

caff

Soldato
Joined
8 Feb 2004
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Location
London
Hi

I am setting up a business, selling self-composed music, and I wish to use PayPal's merchant tools with a business account. I will run the sales process in the evenings.

Everything seems very straightforward, but I need everything to be above board - can anyone answer the following:

1. I am not running a registered business, can I take PayPal payments as an individual (i.e. to my name)? Is it easy to draw down income from PayPal once the orders start coming in?

2. Do I have to charge VAT? Or pay VAT? In fact, what is VAT? And does it apply to my line of business (music composition / entertainment)

3. What about other taxes, e.g. income tax? Do I need to inform my present employer, or should I contact the Inland Revenue directly?

Thanks
 
I doubt that you'll need to charge VAT. Your annual turnover needs exceed a threshold of £58,000 before you are required to register for VAT. You may want to check that £58K figure hasn't changed recently, I wouldn't know!

My recommendation is that you go see an accountant for proper advice. A chartered accountant can set up a limited liability company for you. This doesn't cost much and is always a good idea!

I don't think you need to tell your employer anything. You will need to declare your extra earnings to the IR.
 
Thanks

Yes, my annual turnover will be much lower than that, but I'll check with the IR.

I know nothing about accountants, and I'm not sure I can afford one - they're expensive aren't they? Is there any way I can get one-off advice, e.g. an hour of an accountants time? Or is that pretty standard?

As regards extra earnings - does this mean doing a self-assessment? Would the IR calculate the amount of tax I need to pay based upon the earnings I declare?

Sorry I'm a bit of a noob when it comes to money!
 
I once set-up an LTD company a few years back now. I just made a 10 minute phone call to an accountant, they set-up the company and sent me a bill for £150. That was quite cheap I think! May cost you a bit more than that.

Chartered accountants are quite expensive. But, you can always get sound advice from a non-chartered one. They charge more affordable rates for very small businesses.

Also, my local Citizens Advice Bureau has a free business start-up advisor. Maybe yours has.

It's well worth investigating what the possibilities are. You may even be eligible for some kind of grant, i.e. free money.
 
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