Got something to say or just want fewer pesky ads? Join us... 😊

OT advice sought re going self employed



Soulman

New member
Oct 22, 2012
10,966
Sompting
Thanks for the speedy replies chaps, some good advice received. Certainly putting my mind at rest somewhat.

Good advice given. I used to put 20% a month by direct debit into a savings account, which covered my tax and NI. I was advised by my accountant (since 1992) to staple my invoices with the receipts for that period in an A4 book. At the end of the year i take my book to him (he used to work for 9 years inland revenue prior 1992) and he sorts everything out for under £200. My accountant is a ST holder as well.....:cheers:
 




trueblue

Well-known member
Jul 5, 2003
10,948
Hove
Not much to add other than to say that as an alternative to an accountant, there's an online website called FreeAgent which is cheaper and ace if your tax affairs aren't too complex. Which sounds like it could be the case. Great source of tax advice too. However, a good accountant in my experience will probably save you more than they cost each year, and their fees are tax deductible too.
 


GreersElbow

New member
Jan 5, 2012
4,870
A Northern Outpost
Can you go limited company? Been a good few years since I was an apprentice accountant, but that's what's recommended for tax purposes. Though, from what I'm gathering, it sounds like IR35 could be an issue if you chose LTD.

I use to work for Crunch in Hove, it's affordable and shows you in real time your tax liabilities and profits if any with access to account managers and accountants. Check them out.
 


Grombleton

Surrounded by <div>s
Dec 31, 2011
7,356
I've been self employed for a couple of years and in terms of freedom its been incredible - there's the constant worry of ensuring that continual funds are coming in, but thats the issue of anyone who owns a business.
In terms of tax/accountancy, I use a system called FreeAgent - costs me £15 a month and keeps a track of all my expenses/invoices etc. I upload statements from my internet banking and it explains all of it. Best of all, it pretty much sorts out all my self-assessment stuff for me (I have to declare my other job as well, alongside all the other usual bits) but it's well worth it. You do miss out on the bonus of having an accountant who may be able to help you with further savings etc, but it's the downside of not paying more for an actual accountant.
 


sydney

tinky ****in winky
Jul 11, 2003
17,965
town full of eejits
After a drastic change in my personal life I'm going back to "proper work" after 5 years as a carer.

I've been offered 3 jobs in the last week, one of which means going self employed.

The 2 jobs on paye are back in the motor trade and back to what I know, the other one is oven and white goods cleaning which might sound a bit odd to go for something completely different but it's out and about meeting people earning £13-£20 per hour and am only expected to work Monday-Friday.

The deal I've been offered is that for 6 months I take 40% of each job, they are mad busy and turning work away and the mrs of the couple wants to work much less so I'm pretty confident that amount if work isn't a problem at all, they've got glowing references on check a trade who's also helps put my mind at rest.

My only investment is that for 2-3 weeks training I am unpaid, and my only expenses are to put fuel in the 2 year old van they supply as part of their %.

The last person who did this for them only wanted 2 jobs a day and turned over £17k last year, they can supply me 4 jobs a day if I want them.

I invoice them for week 1 in week 2 and they pay me week 3 so will be getting money in every week.

I think this could be a really good opportunity for me to earn reasonable money but I'm a little cautious regarding the self employed bit.

I've got someone qualified who is prepared to do my books for a nominal fee, and I'm planning on keeping 20% to one side for tax and stuff.

Is it just a case of keeping all my invoices, payments and fuel receipts, or is it much more complicated than that?

Yes I know I can google it bit I'm after some advice from anyone who's got experience of going self employed for the first time :)

Thanks in advance

sounds too good to knock back mate , does it take two weeks to learn how to clean an oven....??
i would say go for it and good luck....:thumbsup:
 






upthealbion1970

bring on the trumpets....
NSC Patron
Jan 22, 2009
8,886
Woodingdean
Thanks for all the advice, I was a bit dubious but you've put my mind at rest so have decided that my gut instinct to go for it was right.

And yes it takes 2-3 weeks to learn how and what to take apart and what equipment to use on it, also got to learn how to use the dip tank in the back of the van :)
 


Charlies Shinpad

New member
Jul 5, 2003
4,415
Oakford in Devon
Just a quick footnote to say you are entitled to £6.50 per day breakfast allowance if you leave your home before 6.30am everyday and also entitled to £14.00 per day lunch allowance if you work more than 10 hours a day including travel to and from work , plus 45p a mile for the first 15,000 miles( I think)and 25p mile after that
 




upthealbion1970

bring on the trumpets....
NSC Patron
Jan 22, 2009
8,886
Woodingdean
Just a quick footnote to say you are entitled to £6.50 per day breakfast allowance if you leave your home before 6.30am everyday and also entitled to £14.00 per day lunch allowance if you work more than 10 hours a day including travel to and from work , plus 45p a mile for the first 15,000 miles( I think)and 25p mile after that

Cheers, sounds like I will be doing some early starts and long days then :thumbsup:
 




LamieRobertson

Not awoke
Feb 3, 2008
48,398
SHOREHAM BY SEA
Some people have offered advice on maybe trading via a Limited company....be aware though that (in my experience) your accountants bill will be higher.
I think also the standard of record keeping has to be higher ...a some have said it can mean you are able to reduce your national insurance contributions but you have to be aware that it can make things a tad more complicated.
I wish you all the best ...i have been self employed for 20 years and haven't regretted taking that route once even thought there are no paid holidays!..and it seems you don't have to even find the work which is nice!
 




Superphil

Dismember
Jul 7, 2003
25,679
In a pile of football shirts
So, judging by comments here, 'Self Employed' seems to be a bit of a metaphor for 'Tax Avoidance', or is that evasion?
 




upthealbion1970

bring on the trumpets....
NSC Patron
Jan 22, 2009
8,886
Woodingdean
I own my own business and the 1st year was hard but after that if you keep your books up to date you'll be fine.A lot of jobs come from recommendations from the previous jobs you do.

The firm I'm sub contracted to have stacks and stacks of work and are currently turning work away, so I'm confident that quantity of jobs isn't an issue. However the length of time for me to get upto speed is an entirely different matter :lol:
 






Since1982

Well-known member
Sep 30, 2006
1,610
Burgess Hill
My wife has been self employed as a sole trader (she runs a dance school) for about 6 years and I have had two bouts of self employment via a limited company, the second of which is just coming to an end as I return to a perm role. Sole trader works for her as turnover and profit don't warrant the additional complexity and cost of a ltd company. Her turnover is around £35k a year whereas mine has been into six figures and so the tax advantages outweigh the extra costs.

On record keeping, we both keep all receipts, numbered and logged onto a spreadsheet with dates and details justifying the spend. These are then filed by month. She uses a simple spreadsheet based cashbook for income and expenditure by month and this auto totals to the categories needed for her tax return which I do using TaxCalc for £25 a year as well as my own self assessment return - it is software I have used for years as it simplifies the HMRC forms, gives me 24/7 access to expert advice and allows me to submit directly online. Use a separate bank account and keep on top of reconciling statements to your records.

I do think good record keeping and admin are important. Also worth looking at legal insurance to cover your costs of a tax investigation should you ever have the misfortune to suffer one.

Good luck - I'm sure you will be successful and happy in your business!
 








Garage_Doors

Originally the Swankers
Jun 28, 2008
11,790
Brighton
Keep an eye on profit levels.

Profits above £7,956 (so with your personal tax allowance of £10k, say £17,956), are taxed at 29%, not 20%, due to a little known stealth tax of Class 4 National insurance. At 9%, this has really crept up over years. There's no way out of it and it is paid in addition to the small amount of Class 2 National Insurance paid by DD every 4 weeks.

When profits get to say £25,000, but it's up to you, due to the tax saving it may then be worthwhile operating instead as a limited company where corporation tax will only ever be 20% for a one man band like yourself. A bit more complex to run, but good accountants will explain all.

Good luck with the business.

As I understood it you had to pay Class 4 to qualify for full pension at retirement age. Paying just class 2 won't qualify you.
 


Garage_Doors

Originally the Swankers
Jun 28, 2008
11,790
Brighton
So, judging by comments here, 'Self Employed' seems to be a bit of a metaphor for 'Tax Avoidance', or is that evasion?

I know what you mean, being self employed to a lot more beneficial.

I earn a lot more now than I did when employed, and pay a lot less tax. And I don't mean illegally, everything legit but just seems less to pay back.
For instance when employed, company car cost me £200 in tax per month , now it's a business expense so no tax to pay on company vehicle. As an employed person Used to pay upwards of 200-300 per moth NI, now as self employed its a flat rate £12.45 per month.
In good times with bonuses etc used to £800 tax a month but now the highest tax bill I have had for the year has been only £2'500'
As I have said everything is legit,accounted for with an accountant but I pay nowhere near what I did when employed.
 


Albion and Premier League latest from Sky Sports


Top
Link Here