Graduate Student Business

[Scared]

Hi everyone.

I am a graduate student, studying for a PhD, and would like to start up a small business to support me through my research. (I have already investigated any copyright issues between university work and my business work and i dont think there are any). I shall be working on this venture in the evenings and weekends.

Currently i am recieving a yearly stipend (non-taxable), and from basic calculations i dont think i will be making more than £2000 profit in the first year.

So what should i do? Should i set up as a sole trader, limited company? and what are the tax issues?

[Joyous]

With the levels of profits that you describe tax on your business ventures will be nil whether you trade as a limited company or as a sole trader so from a tax point of view it makes little difference. From an admin point of view you’d be better off as a sole trader where the only admin requirements are to inform the Inland Revenue within three months of commencement of your self employed status and to keep adequate records to substantiate your tax return.

Contrast that with limited company status where you have to register your company and file an annual return (each for a fee), engage a company secretary who’ll probably want paying, probably pay higher accountancy fees so that your accounts are in the format required by Companies House. In addition any profits belong to the company, not to you so you have to consider how you’ll get the money out.

Also consider if you’ll want to continue trading once your studies finish. If not then as a sole trader you simply stop trading. As an ltd you’ll either have to make the company dormant or apply to have it struck off.

Hope this helps

Regards

Joy

[Melody]

Hi

It would be good to hear more about what you are doing and what kind of business you are running. We here at Enterprise Insight are looking for inspirational role models - don't let that frighten you - we are looking for young people who are prepared to share their stories with others - the whole story - what it is like setting up on your own, what's easy what's hard. Let us know if you are interested in sharing your experience. You may wish to check out our website www.starttalkingideas.org