Starting as a side hustle, payments, tax and bank account?

[Everest Window Cleaning]

I'm an experienced window cleaner who's about to start canvassing for my own round in Newcastle upon Tyne and have a few questions. My plan is to do this alongside my full time job. I earn about £28k in my job and obviously pay income tax and NIC. So when I start earning from cleaning windows do I tell HMRC straight away? What will my tax rate be as a sole trader who's already hitting his tax free allowance? My customers will be paying online so what's the best bank account to set up? Can I just set up a standard current account with no fees and get my clients to pay directly into that? I'm thinking I'll put the account number and sort code on my "Windows cleaned today" slip and ask the customers to use their address as the reference? Also, I wanted to set up a website and have a payment portal on that. How easy is it to set that up?

 

[ched999uk]

As soon as you start work you need to register with hmrc. You will pay what ever tax and national insurance rates are applicable as you will use your allowance for your main job. So 20% of profit up to income of £50K, then 40% upto £125K.
Bank accounts you really need to have a business account as some banks crack down on multiple payments going into a personal account. Look at Starling as I think they are free.
Website is a good idea but don't spend loads on it as unless you are willing to learn or pay for SEO (search engine optimisation) you aren't going to get on the front page.
As for a payment portal, I wouldn't bother, too complex and not worth the effort.
You could pay for a round management app like Squeegee who offer 30 day trial and were recently offering half price for 6 months - this allows you to take online credit card payments and offer GoCardless - direct debit.

The hardest bit will be gaining customers.

 

[Part Timer]

Apart from your PAYE you won't pay any tax until the 1st January after the first April you're trading. So if you start now you will pay tax on your profits next January, if you start in the new tax year, 25/26, you won't be liable to pay tax on your profits until January 2027. You will however also have to pay an additional 50% of your tax bill then and again in July.
Sounds complicated but it isn't once you know your way round it, speak to either HMRC, very good and free once you manage to get through, or an Accountant

 

[mattybondi]

keep the bare minimum in your bank accounts.For several yrs now the various government departments have been able to trawl accounts,freeze them at will. I had this happen to me regarding child maintenance , luckily for me id kept copies of cheques that id paid going back 10 yrs ,if i had not id have lost my savings! As it turned out id actually overpaid but of course was unable to get any money returned .But ever since iv kept little in my banks -you dont get any notice of freezing an account,its not as if id even had a pay up now letter not a red one nothing

 

[Everest Window Cleaning]

As soon as you start work you need to register with hmrc. You will pay what ever tax and national insurance rates are applicable as you will use your allowance for your main job. So 20% of profit up to income of £50K, then 40% upto £125K.
Bank accounts you really need to have a business account as some banks crack down on multiple payments going into a personal account. Look at Starling as I think they are free.
Website is a good idea but don't spend loads on it as unless you are willing to learn or pay for SEO (search engine optimisation) you aren't going to get on the front page.
As for a payment portal, I wouldn't bother, too complex and not worth the effort.
You could pay for a round management app like Squeegee who offer 30 day trial and were recently offering half price for 6 months - this allows you to take online credit card payments and offer GoCardless - direct debit.

The hardest bit will be gaining customers.

Thanks for the reply. Should I register as a sole trader? And when it comes to business expenses such as running costs like fuel, dionised water, equipment & clothing etc do I keep receipts and offset that against the money I earn so I don't pay 20% tax on it as that's not profit. Will I need an accountant or could I handle the financials myself?

Also, do you have any recommendations for public liability insurance for a one man band and roughly how much would you think that could be?

 

[ched999uk]

Thanks for the reply. Should I register as a sole trader? And when it comes to business expenses such as running costs like fuel, dionised water, equipment & clothing etc do I keep receipts and offset that against the money I earn so I don't pay 20% tax on it as that's not profit. Will I need an accountant or could I handle the financials myself?

Also, do you have any recommendations for public liability insurance for a one man band and roughly how much would you think that could be?

I believe you do need to register with HMRC but you can call them and ask they are helpful although it might take a while to get through.
Any expense you incur running and setting up the business are offsetable against income, you will need to keep receipts. I don't know about this bit but if your income is above £50k (not sure if that's just self-employed income or total income) you might have to do 'making tax digital' and that's submitting numbers every 3 months - again ask HMRC.
An accountant might help as you should be able to claim some household expenses (as you do paperwork, planning etc at home), plus vehicle costs, depreciation, equipment purchase - capital allowances etc - tax can be fairly complex to minimise your tax bill plus it might be simpler in your first year even though it will cost you a few hundred. Usually you can 'register' with an accountant and get advice.

For public liability I use Hiscock as they cover the property I'm working on and for multiple types of work, window cleaning, soffit, facia cleaning, gutter emptying, pressure washing (pressure limits apply) etc. I pay a little under £30 a month.

Hope that helps?