You’re at a bridge and you want to work for yourself…but where do you even start and how do you get there?
You know you’re great at what you do and can offer that service/skill to others. You’ve got the tools and equipment ready to get going and you’ve got friends/family/friends of friends all ready to use your skills & services.
So what’s stopping you from getting cracking??
Well to be honest you can get cracking but what about the legalities?
The main and most important thing you are going to need to do is to protect yourself.
INSURANCE
You will definitely need Professional Indemnity insurance. If you are going to go to clients/customers’ premises or they will be visiting you at your premises then you will also need Public Liability insurance.
HMRC
Once you earn over £1000 during your first year then you must register yourself as either self-employed or trading as a Limited Company. Most people just starting out, tend to register as self-employed initially.
This way you can see how things go without the extra paperwork and costs involved of being Limited.
Once you register with the HMRC you will be given a Gateway code which allows you to log on to your account and complete your self-assessment online by the 31st January each year.
Filling this in lets the HMRC know how much income you have received and how much you have spent on costs of materials, fuel for work, equipment etc. The calculation then works out how much income tax and national insurance you need to pay too.
A Bookkeeper
Having a bookkeeper isn’t a necessity to getting started, but having one to turn to, to ask questions and make sure everything is in order for the tax man will save you a lot of headache in the long run. By having a bookkeeper ready to deal with all of the paperwork you’ll be able to concentrate more on building your business knowing that you have a clear idea of how your business is performing. You need to run your business as a business, not a job!
TIPS:
- It is always best to pop away into another bank account (which you use for business) 20% of the income that each customer or client has paid you. This way you should have an amount to put towards your tax and national insurance. Then it isn’t such a shock!
- Be aware that on your first year of trading you will need to pay the tax and national insurance for the financial year just passed PLUS half of the estimated tax and national insurance for the next year. All by the end of January. This does catch a lot of people out! You will then have to pay another payment on account by the end of the following July.
- Make sure that you have a separate bank account for business from your personal bank account. It is so much easier to keep these things separate. It doesn’t have to be a business bank account whilst you’re just starting out, just as long as it is separate
If you’d like any further info on how I can help you as your bookkeeper, please drop me an email at nikki@nikkiedwardsonline.co.uk or subscribe to the jargon free hints and tips below
