Body & Soul0 min ago
Setting up Business
3 Answers
I am setting up a tanning salon in the back room of my mother in law's hair salon. Her lease states no subletting so therefore thought it best if for landlord's purposes it is still in her name.
I work for a firm of solicitors so can get a business agreement drawn up between ourselves but my concern is how I pay my correct tax etc as I don't want to be stung at a later date. Really the tanning will be seperate from the hairdressers in that I will put in money and make money from it but I am not sure how to go about paying tax etc as the Business is in my mother in law's name.
Can anyone help???? Or point me in the right direction.
Mrs L. Masters
I work for a firm of solicitors so can get a business agreement drawn up between ourselves but my concern is how I pay my correct tax etc as I don't want to be stung at a later date. Really the tanning will be seperate from the hairdressers in that I will put in money and make money from it but I am not sure how to go about paying tax etc as the Business is in my mother in law's name.
Can anyone help???? Or point me in the right direction.
Mrs L. Masters
Answers
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Go to see an Enterprise Advisor at your local Business Link. Setting it up needs to be carefully thought out as from what you are saying it may be classed as a partnership which has tax implications for you both.
You also need to look at a business plan etc.
1st - Business Link
2nd - an accountant for advice (they should give you some time free as you are a potential client)
3rd - The bank
You also need to look at a business plan etc.
1st - Business Link
2nd - an accountant for advice (they should give you some time free as you are a potential client)
3rd - The bank
I take it you are not registering this business as a Limited Company.
You can (and should) register as self-employed with HMRC and keep records of the business - incomings and outgoings. One of the outgoings will be the rent you pay to your MiL but I don't know how you/she can reconcile this with the no sub-letting bit. Unless the turnover of your business exceeds about �61k pa you don't have to be registered for VAT. As a self-employed person you are assessed for tax annually and have to complete an annual tax return. These people also extract your NI contributions.
The only other potential hassle I can think of is HMRC claiming you are not self-employed, but in fact an employee with a contract of service from your MiL. This is called IR35 by HMRC after the circular that introduced the rules and it has potential cost implications for your MiL. Ask your MiL about it - because most hairdressers working in salons seem to be self-employed these days and seem to be avoiding any IR35 type claims from the Inland Revenue.
You can (and should) register as self-employed with HMRC and keep records of the business - incomings and outgoings. One of the outgoings will be the rent you pay to your MiL but I don't know how you/she can reconcile this with the no sub-letting bit. Unless the turnover of your business exceeds about �61k pa you don't have to be registered for VAT. As a self-employed person you are assessed for tax annually and have to complete an annual tax return. These people also extract your NI contributions.
The only other potential hassle I can think of is HMRC claiming you are not self-employed, but in fact an employee with a contract of service from your MiL. This is called IR35 by HMRC after the circular that introduced the rules and it has potential cost implications for your MiL. Ask your MiL about it - because most hairdressers working in salons seem to be self-employed these days and seem to be avoiding any IR35 type claims from the Inland Revenue.
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