A guide to going self-employed

Going self-employed can be both an exciting and lucrative move, with some of the benefits including setting your own work schedule and being able to scale your business. You can create what the perfect job looks like to you.
However, it’s also a challenge that comes with responsibilities – you will be in charge of your own destiny and that takes courage, determination and a particular mindset. You’ll have to take on multiple roles to ensure you are adhering with self-employment regulations and you may find this overwhelming at times.

It is your responsibility to ensure you research your options to make sure you are making the right decision for you.

We have put together a handy guide of things you will need to consider before going self-employed.

It’s on you.
Until you scale your business, (if that is the intention) then everything is on you and you will be working alone. From customer service to finances, there will be a lot to keep on top of.
Joining local networking groups for business owners is a good way to connect with likeminded individuals and gain that support you may feel is lacking. It’s also a great way to market yourself.

It may not be flexible in the short term.
Being self-employed is a great way to create a better work life balance as you can pick and choose what you do. However, with the loss of a regular pay day, it may be that you need to take on as much work as possible at first to establish the business in order to give you a flexible future. You may also find yourself tackling admin and customer service in between your working hours.

There are financial responsibilities.
Registering as self-employed means you will have an obligation to complete a self assessment tax return each year. This is to declare your income and pay the correct amount of tax owed. When you are self-employed, you are able to claim for certain expenditures which will alter your tax bill, so always get some advice from an accountant about how that works. Remember, an accountant is your business partner and will want to help you pay less tax.

You’ll have to keep accurate and up to date records of receipts and invoices too. Your accountant can advise you on what the best software to use for this is – HMRC will be implementing Making Tax Digital soon which means you will have to use approved software such as Xero to complete your assessments.

As your tax doesn’t get paid as you earn, you must also remember to put money aside so you are prepared for the tax bill!

Depending on your earnings threshold, you may also need to consider being VAT registered.

You’ll need to broaden your skills.
When you are self-employed you will have to undertake admin, market yourself, pitch for work and more.
Linked in offer some brilliant training videos across lots of different topics, including communication skills, which can be helpful for business owners.

You will have different rights.
Being self-employed means you wont have the same rights as employees. That includes no sick or holiday pay, and losing employer pension contributions.

Don’t forget insurance!
You’ll need to get business insurance for added protection. Whether someone injures themselves at your workplace, or you flood a customers property – you need to get covered.

Use professionals.
Setting up solo can be daunting and there is a lot to remember. By hiring a professional accountant or bookkeeper, you can relax in the knowledge that all of your finances are being looked after, and you can concentrate on growing your business.

Does this article resonate? Are you thinking of going self employed? Did you find this blog helpful? We would love to hear from you.

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5 Ways to Get Support for your SME

Five ways you can get financial support for your business

1: Claim up to £5,000 with employment allowance

Employment allowance is a tax relief which allows eligible businesses to reduce their national insurance contributions bills each year. You can claim this is if you are a business, and your employer Class 1 national insurance liabilities were less than £100,000 in the previous tax year.

That’s a new tax cut that’s worth up to £1,000 for nearly half a million SMEs!

2:Get a discount of up to £5,000 on software, with Help to Grow: Digital

Help to Grow: Digital is a UK wide Government backed scheme that aims to help businesses choose, buy and adopt digital technologies that will help to grow their business.

Eligible businesses can receive a 50% discount on buying new software worth up to £5,000 per SME, alongside free, impartial advice and guidance about what digital technology is best suited to boost their business performance.

3: Get up to half off your business rates 

From April this year, small retail, hospitality and leisure businesses can benefit from 50% off their business rates bills. The business rates multiplier has also been frozen.

4: Invest in your business with Super-deduction and Annual Investment Allowance

To spur business investment, the super-deduction allows companies to cut their tax bill by 25 pence per every £1 they invest in any qualifying machinery and equipment. This can include the purchase of computers, most commercial vehicles and office furniture. This allows businesses to spend up to £1 million on qualifying business equipment , and deduct in-year its full cost before they calculate their taxable profits.

5: Benefit from the cut in fuel duty

The government has cut fuel duty on petrol and diesel by 5 pence per litre for 12 months – effective from 23 March 2022.

This cut, plus the freeze in fuel duty in 2022-2023 , represents a £5 billion saving worth around:

  • £200 for the average van driver
  • £1,500 for the average haulier

 

Information on behalf of HMRC – for more information visit Gov.uk or Call us for a no obligation Consultation. 

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6 Ways to keep your business healthy

2022 is proving to be yet another exhausting year for many – and it’s taking it’s toll on businesses too. Many of us get wrapped up in the day to day running of our businesses, that we neglect key ways to keep ourselves, and our businesses healthy.

 

Here’s our take on some top tips to implement to do just that.

Personal Wellness.

This industry makes millions and it’s a hot topic again in 2022 thanks to a post covid change in the way we live and value wellness. There is an abundance of paid and free information, ideas and guidance ranging from nutrition to exercise and meditation. With the cost-of-living crisis upon us, and business owners working harder than ever to survive, it’s never been a better time to invest in your personal wellness.

Connect.

Never underestimate the value of connection in business. Whether it’s a phone call, personalised email or private chat on social media, use every opportunity to connect with your audience to ensure you are a contactable, personable business.

Never stop learning.

A mistake easy to make is complacency in your skillset. The business world is ever evolving and keeping yourself educated and in the know in your industry is an important part of keeping your business and yourself relevant. Invest in yourself and your staff by regularly updating your education and knowledge to keep your business healthy.

Invest in people.

As the ever so wise and successful businessman Steven Bartlett says, when you are a business owner you are essentially a recruitment company. As a business owner you can’t be everything your business needs. Investing in the right people to do the right jobs within your business is one of the most important things you can do to grow.

 

Laugh more.

This had to be included – there must be a culture of hard work, dedication AND laughter in your business to keep you, your staff, and ultimately your business, healthy.

 

Don’t ignore the numbers.

We wouldn’t be doing our job if we didn’t shine a light on the importance of bookkeeping and analysing the numbers in your business. Don’t ignore them – healthy businesses are ones with accurate figures and action plans for ensuring those numbers are working for you!

I hope you find these tips helpful. Get in touch if you think of other ways to keep your business healthy!

Until next time,

Theresa

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Why should I hire an accountant?

Hiring an accountant to look after your business finances can be a savvy move. DIY finances aren’t for everyone, especially when your accounts start looking rather complicated. Whether you’re just starting out, or if you’re up and running but looking to expand, here are some ideas why you need an accountant helping your business develop.

 

Saves you time

The majority of people start businesses doing what they love, and what they’ve always dreamt of doing. For most people, this unbridled enthusiasm generally doesn’t extend to spending hours on financial records and paying taxes.

Accountants can help you focus your business efforts on the really important (money-making) stuff, whilst they take care of the other important (tax paying) stuff. It’s a win-win; you don’t get to waste time crunching numbers, and you get to spend time making more money.

 

They’re up-to-speed

Tax deadlines, limits, and amounts due have an annoying habit of changing on a semi-regular basis. Overlook one critical change, and you could end up massively underestimating your next tax bill.

Using an accountant guarantees that deadlines are met, and that you’ll be paying the correct proportion of tax at the right time (and to the right people). Understanding how the system works can be a bit of a minefield; an accountant will help you tread carefully.

 

 

 

You could save money

Think hiring an accountant is expensive? Think again. A good accountant will be able to highlight any areas where you could be saving money (such as claiming for all of the expenses you’re entitled to), which means that not only could they drastically cut your tax bill, but they could even end up paying for themselves.

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Business support and advice

It might be that being a sole trader isn’t very financially efficient any more, and that you’d be better off running as a Limited Company of operating through an Umbrella company.

Accountants aren’t there just to help with finances; their support can improve your whole business setup. If you’re just starting out, they can cast a beady eye over your projections and financial plans. As your business grows, they’ll be able to run you through the various options available and point you in the right direction if you decide to change the structure of your business.

 

Full account management

Although you’ll still be legally responsible for their accuracy, you can handover full management of your accounts to your accountant. This means they’ll be able to do everything on your behalf, from completing your tax return, managing PAYE to filing your accounts with Companies House. You could even nominate them to manage your communication with HMRC. No more wasted hours listening to dreary hold music? Yes, please.

 

You might need investment

At some point, most businesses will need investment. Whether it comes in the form of a bank loan, business angels, or investors, you’ll need a solid plan detailing both your forecasts and your accounts to-date.

An accountant will be able to offer guidance and ensure you’ve thought of everything, and provide reassurance to those looking to invest that your figures are accurate and realistic.

 

It makes life easy

Spreadsheets, invoices, and tax returns aren’t for everyone. If the thought of just opening up your accounts gives you a spreadsheet-induced migraine, hiring an accountant would be a good shout – and some may even give you access to software so you get a hands-on picture of your finances.

 

Not only will an accountant keep your accounts in order, but you’ll also have the added assurance that you won’t be penalized for late payments. Plus, you’ll get to spend January feeling smug about having a hassle-free tax return; now, who said you can’t buy happiness?

 

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