Just wondering if anyone knows the in's and outs of being self employeed and the accountaning for such a venture?

Specifically, I know I can claim mileage from my home and such like if that is my base but more thinking about what I can pay an employee, or volunteer if its legal to do so? FFRR MY06 facelift With TDV8 Alloys Zeros/ATR's
Mantec Sump Guard, Rigid Load liner, MY10 BT upgrade.

You can claim 45p a mile for the first 10000 miles for your business for any private vehicles after that it drops to 25p if I remember righly.
If you have a company vehicle and all mileage is business related ie a pool car then all expenses can be put direct to the business no tax is incurred

The mileage stuff I'm ok with and things like buying food whilst on the job, and any supplies or incurred costs.

I'm trying to work out if a business could run as me as the director and me a 'volunteer' with just the business reimbursing my incurred costs, ie travel, sustenance, tools, clothes... And the business building up profit on what's left or reinvesting it into other things... FFRR MY06 facelift With TDV8 Alloys Zeros/ATR's
Mantec Sump Guard, Rigid Load liner, MY10 BT upgrade.

It's not mandatory to take a wage, but I think expert advice is the right way to go

I use www.crunch.co.uk who offer a website (which is great software for recording all the financials on), a dedicated account advisor, easy access to accountants and their advice and an end of year tax return. All rolled up into a simple monthly cost, in fact I recommend it to everyone who I know who wants to go self employed.

My VAT returns are simply a case of checking a few pre-calcuated figures and clicking submit. Crunch do the rest and then tell me how much to pay HMRC, same applies to Corporation Tax. You also get access to a great knowledge-base and they will also tell you about everything you want to claim.

I've been with them for nearly 2 years and haven't ever had a problem.

Alternatively you could use FreeAgent instead, which is just the accounting software and no accountancy support. So you'd have to find all of that out yourself. 
07 Supercharged - Still breaking her in!

Boot soundproofing part 1 - http://www.fullfatrr.com/forum/topic15612.html
Custom exhaust - http://www.fullfatrr.com/forum/topic15296.html
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It's entirely up to you how much you pay yourself and/or how little you're prepared to work for. However, you need to have a reasonable source of taxed income otherwise you may attract the attention of HMRC. You could live off savings, but they'd be on the lookout for you doing cash jobs on the side.

It's going to be worth paying an accountant for up front advice to make sure you get it right.

Pay yourself minimum wage, then top us with dividends from the company profits. Tax efficient, but definitely worth getting advise re IR35... '08 Audi S6 Avant 5.2 V10 with Milltek non-resonated. Vrrrrrrmmmmmph
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Cheers guys

I wasn't sure about the voluntary thing someone had told me about so thought I would check it out but going minimum wage and paying dividends sounds the right thing to do

It's not going too happen overnight but its helpin me think longer term  FFRR MY06 facelift With TDV8 Alloys Zeros/ATR's
Mantec Sump Guard, Rigid Load liner, MY10 BT upgrade.

There's companies that do IR35 checks for you as well, which cost around £35 to £100+ and basically have a professional review the contract your considering and tell you if you'll get caught in IR35. It's not a guarantee, but it could save you many thousands of pounds in tax and NICs that otherwise you wouldn't pay. The benefit to that for me is that I can hire people and afford to donate money to charities I want instead of HMRC. 
07 Supercharged - Still breaking her in!

Boot soundproofing part 1 - http://www.fullfatrr.com/forum/topic15612.html
Custom exhaust - http://www.fullfatrr.com/forum/topic15296.html
18" wheels for Brembo equipped cars - http://www.fullfatrr.com/forum/topic15052.html

I use these lot:


http://www.sjdaccountancy.com/

Set your own limited company up inside 2 hours,

I pay £132/month . They assign you a dedicated accountant and guarantee to return your emails inside 24 hours.
That cost is deductible against your business and they prepare your year end accounts and directors tax return.

Send very regular email reminders to tell you your vat is due etc

I don't really have expenses to put through, just train fares, but they told me rule of thumb is that you can only really put through 100% related . Can't even claim my mobile, as obviously use it for personal calls too.

I only earn the basic wage But take monthly dividends ,
I think annual limit is £28,600

Also get yourself on flat rate vat scheme  Alcohol and eBay is never a good mix

2006 4.2 Supercharged, Java Black

Are you talking having your own ltd company and being a director of said company or being self employed as in being a sole trader?
I am no expert but there are differences in taxation.
If you go down the ltd company path then you can pay yourself what you like as directors are not restricted to the minimum wage eg you could have a big job on and work 100 hours a week but still only get paid £100 which equates to £1 per hour.
I believe the most tax efficient way is to pay yourself a salary around the limit of the personal allowance and supplement this with share dividends
The above comes at the cost of increased accountancy fees for a ltd company as opposed sole trader.

Are you intending to be operate through a company or as a sole trader? [Damn just noticed GVW's asked the same, sorry] Don't get them confused as very different but you can claim expenses either way. If the latter the dividend/salary debate is irrelevant. If the former, as has been said you can pay yourself whatever you wish (as a Director you're excluded from the NMW) - and pay yourself as tax efficiently as you can.

From memory the most tax efficient way is to pay to the ST [need to check the code, maybe LEL, PT, UAP or even UEL , always get confused!] (actually below PAYE threshold) with the rest as dividends but haven't looked at the new tax year yet.

Re expenses, which seems to be the main question, you can pay yourself costs which are wholly & exclusively part of working - there's a whole raft of guidance on HMRC's website which runs through what is / is not acceptable. e.g. if staying away, reasonable out of pocket including a meal etc is fine, going out to the local 'entertainment establishment' aint gonna be... [Note - as you've mentioned it, clothes are NOT likely to be allowable unless logo'd/safety]

You can also claim for the business portion of some expenses (e.g. I claim a portion of my house costs as I work from home a lot)

There's a whole load of other stuff to think about, and you should seriously consider taking professional advice if you do go further with someone to complete some/all the admin on your behalf. I am an accountant by training and do all the admin on my own consultancy business and I still come a cropper occasionally and regularly tear my hair out wondering what HMRC actually want me to do to comply with PAYE in particular.

Re IR35 - HMRC will check over a contract for you to see if they consider it to be compliant or not. But that's another minefield for another day & may be irrelevant depending on what you're planning on doing.

If your setting up as a ltd company, this is only beneficial if your income would be sufficient to attract the 40% tax rate, with the idea being you pay yourself a 'wage' at the personal allowance threshold and then supplement with dividends that are taxed at 10%, but don't forget you pay 21% corporation tax, thus a total tax rate of 31%, which is obviously better than 40% as a sole trader. However it must be stressed that this is only beneficial if the income would attract the top rate of tax. Plus there are the additional cost/responsibilities of submitting annual tax return to companies house

Basically im looking to go to contract for the company i work for now as FT, but also allow myself to take on other work outside of this.

Ideally being a director and paying myself £1/hr would be great but I am very green with this stuff
Also it would allow me to deduct the travel to and from various places of work and my sustenance off there as well as work clothes which when you spend £200+ a month on the work journeys would help a bit.

Just thinking that if i could do it i would be able to reduce what i get taxed on massively while the 'company' took on the costs of all work related things.... FFRR MY06 facelift With TDV8 Alloys Zeros/ATR's
Mantec Sump Guard, Rigid Load liner, MY10 BT upgrade.

Definitely an IR35 clash if you intend to stay in the same position with the same company just as "consultant". You will be treated as an "employee" by HMRC for tax purposes, unless your current position becomes only a minor part of your company's total workscope..... '08 Audi S6 Avant 5.2 V10 with Milltek non-resonated. Vrrrrrrmmmmmph
'59 Ford Kuga Diesel (boring but AWD and 40mpg...)
2007 (07) Subaru Forester XTen 2.5 Turbo. (Roundabouts are fun again!)
2007 (07) 4.4 V8 Vogue (gone)