Diy as a Career

[SJ]

Hi as anyone here started there own diy business, maybe if you have you could let me know how it went, problems as seriously considering after my lay off in August.

Steve change cold to hot for email

[PoP]

That's what I've done.

You have to be totally committed to this change in your life. If it's to fill in a gap until your next "real" job comes along then it might not be worth the effort in terms of the amount of income it will raise. Obviously if someone offers you some simple work like painting and decorating then the costs are minimal and you can earn some money, but where tools and equipment play a part then you have to make decisions about depreciation and sharing the costs over multiple jobs.

Startup costs were considerably more than I budgetted for. Income in the initial months has been slow to non-existent. If my parents hadn't passed on and left me with a small inheritance (emphasis on small) this wouldn't have been a goer. Basically you need a rainy day fund, if you are starting from zilch then it might be a tad difficult.

What tools do you currently have? A few screwdrivers, a workbench, and a B&Q drill? Think in terms of having to not only replace those tools, but augment them with others too (an SDS drill will set you back about £50 for starters for example - though you can get them a bit cheaper).

You must not forget essentials such as indemnity insurance, budget maybe £250+. The outgoings will surprise you.

Networking is key to getting work. Advertising doesn't work well (I don't think I've covered my costs of advertising - and I haven't advertised much). The more people that know a man that can, the more work that man will get. Referrals and repeat business are what you need to aim for.

It's best to be aware that some if not many of the jobs that come your way are ones which might be a tad more difficult than they first look. The householder might have got opinions from elsewhere and your quote looks really great. Then you spend mucho time wondering why the hell you ever accepted the job from hell working for peanuts..... :)

How are you planning to shift tools and materials to and from site? I was fortunate that my "family" runabout was a Freelander in good shape. It's a pain in the butt because it is way too small even with the rear seats folded. But if you've got a plain vanilla family car you'll need to budget some sort of van or truck early on.

It's a cut-throat business. Many people have been displaced in their employment and see doing a bit of DIY as a means to put food on the table for their family. End result is lots of people fighting for work in a restricted environment.

Also be aware that the Inland Revenue apparently take a special interest in this group of freelancers - it's too easy to work cash in hand and leave the taxman out, and the taxman knows that. I won't do cash in hand and everything gets documented and passed thru the bank account for when Hector pays a visit. That means quite a lot of paperwork which I don't get paid to do.

The last thing I will mention is that you will most likely want to start up as a sole trader. Be aware that as a sole trader you don't have any real legal protection if you take something on and it goes pear-shaped at someone else's expense. They can come after you and take everything you own by way of compensation. A limited company puts an umbrella over your head in this respect - but costs a lot more to set up and operate. So with any job you decide to take on you must have an eye on underwriting the full cost of repairs for the customer if it doesn't work out - those repairs may be worth considerably more than the job you originally took on.

Timewasters are a feature on the landscape. I had one guy recently who phoned up wanting a new loft floor and loft ladder installed. I gave him a budgetary quote. The next day he phoned up with a couple of questions about the installation, which I gladly answered. The day after that I got another phone call saying he'd had someone else in and they had said the overlay over the top of the rafters would cause a problem and the quote would have to be higher as a result. Not only was I unaware of the underlay having been thrown over the rafters, but I was by now getting ticked off by the guy playing me off against someone else. I told him to employ the other guy - I've got better things to do than provide a free advice helpline for the benefit of others.

I am contemplating trying to build a small business network of like-minded people, or even possibly employing others. Reason being that I've just been approached to take on a major painting and decorating job - we are talking very large house and the lot needs doing. I've turned the job down because there aren't enough of me to do it. If I had 2-3 other people to call upon it might have been worthwhile.

Overall I would suggest this might look like an enviable way of getting back to work. But it is hard graft most of the time. For me it has worked out - I don't ever want to go back to sitting at a keyboard

5 days a week getting stressed out. My income potential is perhaps one third what it was 2 years ago, but quality of life is significantly improved. I've downgraded my aspirations and in due course will downgrade my lifestyle (downshift the house to something smaller when the children fly the nest). If you aren't able to take that step then it's probably safest if you don't get into this industry.

PoP

Sending email to my published email address isn't guaranteed to reach me.

[stuart noble]

Some people prefer to keep your name a secret so that you don't get too busy to do their work.

Or you get the "fiddly" jobs that fall between trades. All the big stuff has been done and paid for and you're left with the "just" jobs. "Just box in those pipes" is a favourite. Takes forever and nothing much to show for it. Well, you've only tidied up after the plumber really. Shouldn't cost much, should it? Don't forget that women swoon over paint. All through the preparation stages they look at you as though you're making work and it's all a plot to create dust. Put a coat of paint on something and they think you're wonderful, and able to make their dreams come true. If I had to pick a speciality, I'd go for painting (ideally with some other bugger doing the preparation).

[No-one]

Set up cost if you d-i-y can be just £20-£25.

[nightjar]

Only if you are nothing but a shareholder. In the average small business, you will also likely be a Director, who can still be held personally liable for a lot of things. IMO, good liability insurance is probably a better way to spend the money.

Colin Bignell

[in2minds]

"Hi as anyone here started there own diy business, maybe if you have you could let me know how it went, problems as seriously considering after my lay off in August." [..]

yeh, there are plenty of them out there, commonly known as "Cowboys" (c;

Les

[Andy Hall]

This is very true. If you have a small business as a limited company and arrange for your sister to be the director and the accountant to be the company secretary it looks on paper that the liability for them is only a small set of things such as making sure the company is solvent and filing the annual return.

However, if you are running the business day to day in the role that a director would normally take, then you are considered to be a shadow director and for most purposes that is considered to be equivalent to officially being the director.

For most one person operations of this type, it should be relatively close to a "cash" business in the sense that materials are bought and used on a job and then payment received shortly thereafter.

I suppose it might be useful to be a limited company in the case of wanting to take on large jobs if there is a risk of bad debts from customers.. Having said that, this ought to be tackled by a good business practice of stage payments. .andy

To email, substitute .nospam with .gl

[Andrew]

But you will be taken to the cleaners by the Inland Revenue if you don't use an accountant for your annual returns - it just isn't worth the hassle - they don't argue with a decent accountant. IR591 may well make it financially nonviable since small cos. are going to have to pay NI on dividend payments, if what I have heard is correct, removing the only real benefit of trading as a ltd co.

[Tony Bryer]

If you want to build up your capital base surely paying 0% on 10K of profits beats paying NI and Income Tax at your top rate

[PoP]

I think you may be referring to Gordon Browns inducement to small businesses whereby the first £10K of profit doesn't attract corporation tax (or some such).

I believe he's about to slam that door shut on the fingers of those who fell for his charms. Get lots of people to move wholesale into self employment and set up their own Ltd company, then yank the carpet away from under their feet.

Perhaps I will be proved wrong about this, but I've seen enough of Browns meddling with the economy to know that I simply don't trust him.

PoP

Sending email to my published email address isn't guaranteed to reach me.

[No-one]

I was referring only to set up costs of forming the limited company. £20 - £25 can set it up. However, I have seen charges to do exactly the same vary between £200 and £500. Quite a difference

[Ed Sirett]

Not entirely fair. There are good and bad examples of work done by people who are doing for a living and those or are doing for themselves. The only difference I can tell is that the diy bodgers are more _creative_ than the professionals.

[Dave Plowman]

Hmm. Over the past few years we've had about the most stable economy in living memory - despite a world recession. Perhaps you think that's down to chance?

[derek]

The OP should take note of the way Brown has shafted the IT consultants.

No it's cos Maggie Thatcher kicked the Unions into touch.

DG

[Shano]

Yes. That and the single best thing Govt could have done, which is hand over control of interest rates to the BoE. Brown has done nothing more but put up stealth taxes and create jobs in Whitehall to monitor the real workers.

Shano

[Christian McArdle]

To be fair, though, many consultants were taking the piss. Paying themselves

50 pounds a week and taking their wages in dividends. This pisses non-consultants off, who get paid less and then actually have to pay tax as well. It's a shame this couldn't have been sorted in a less draconian way, though.

A bit like the local tip now banning vans because traders were tipping for free. I now have about a tonne of rubble in my front garden because I can't go down the tip.

Christian.

[Andy Hall]

Would you really want to though? That's a lot of trips unless you have a large vehicle. One thing that I really hate is waiting in a queue of cars waiting to get in at the weekends, so if I do go, it's in the week

.andy

To email, substitute .nospam with .gl

[derek]

Indeed they were. They took advantage of the rules. There are other rules which permit tax avoidance, such as the capital gains tax annual allowance, over £6/annum. Totally out of proportion to the allowances on earned income. And the acceptance of such practises as bed/breakfasting of shares. etc.These rules have been allowed for years. It was because it was a gang of Oik programmers who started making free with the sort of tax planning the establishment have been doing for decades.

ISTM they would have to draw the minimum wage. My accountant tells me I have to draw about 7K (Not an IT consultant BTW).

That's just jealousy, and ignores the fact that they have countervailing benefits.

What I've been told is the IT consultants have to work as employers of a LTD company (their own) or their big corporate clients won't look at them. So they have to pay *both* halves of the NI contribution, and income tax as well, register for VATand pay annual accountants bills. OK we all have to pay income tax but an employee of a big corporate client would expect security of employement, sick pay, holiday entitlement etc and if made redundant can go an sign on. What they say is if they have no work they can't go sign on for unemployment benefit because the benefits agency won't pay benefits to someone who's been made redundant by his own limited company and some of them have had

*nothing* for 18 months.

DG

[Tony Bryer]

It's more than jealousy. These people are (legally) playing the system to reduce their tax bills in a way that other people might like to but cannot. IT people may have the choice of going freelance but people like school headteachers can't.

As to benefits, I trade as a limited company, but do not play the system (more fool me, some might say). I have a company car, non contributory pension, PHI, professional subscriptions paid by the company and I pay myself a proper salary. If, and only if, there is enough profit left after all these, do I pay myself a dividend. If the rules are changed so that owner-managed companies cannot pay dividends (or if they do they are treated as salary) then I will be seriously miffed but my real resentment will not be at GB but those who created a situation that the rumoured changes address.

[PoP]

What you've been told is largely correct - except for the unemployment benefit.

You CAN sign on whilst operating via your own Ltd company - but only when the company can no longer afford to pay you. I've been there and done that.

Giving yourself a P45 whilst keeping money in the company so that you can re-employ yourself when things get better is not an option because they will (and do) crawl over the company accounts looking for reasons not to give you JSA.

I agree with the earlier posters comment about many people taking the p!ss with their personal payment arrangements. However they were not breaking the law in doing so - I'm sure the likes of Richard Branson gain a lot of their financial income in ways which are not strictly salary.

IR35 was not a good solution however. I was trying to hold capital in the company to finance growth and look after me between contracts (and paying myself 25K a year as well - which was the going rate for the job). Under IR35 95% of all monies coming into the company had to be treated as personal salary, regardless of whether that money saw my bank account or not.

It would have been far, far easier to set a limit below which all income had to be treated as salary, and to declare that it applied to everyone from high falluting directors right thru to pensioners. No complicated get-out clauses. Browns tax take would have been significant, without p'ing off many people in the process.

PoP

Sending email to my published email address isn't guaranteed to reach me.