A few people have asked why I chose to become a bookkeeper when there are many other career paths which I could have chosen. The main reason was that I wanted a career doing something which I enjoy whilst providing a challenge at the same time.

Image: scottchan / FreeDigitalPhotos.net

I decided to start studying because I was in a dead-end job that required me to start at 4am and then left me with an afternoon free (after I’d been to bed for an hour). After a few months it became apparent that the job was going nowhere and I was left with a few options:

• Stay there are enjoy doing whatever I wanted on an afternoon, which was mainly watching and playing sport
• Apply for another job
• Stick with the current job and use the afternoons to study and become qualified

The choice was easy and several years down the line is probably the best choice I’ve ever made. Not only has becoming qualified meant that I am employed in a job I enjoy, but I am also able to work self-employed and build up my business with the aim of one day becoming completely self-employed. The challenge now is to achieve that goal.

What about you?

Why did you choose the career you are in and how did you go about overcoming the challenges that it has brought with it?

Over the past few months I have made a lot of blog posts giving tips and advice for small businesses. Below are the 3 posts (in no particular order) which have received the most comments. Have a read through them and let me know what you think.

Image: nuttakit / FreeDigitalPhotos.net

• 3 Reasons you shouldn’t put off filing your tax return – Quite a topical one considering the UK Tax Year has just ended
• How much money do I need to start my own business? – Always the most visited post throughout the week
• 5 Social Media Pet Peeves – This is a recent post, but seems to have got people talking

If you’ve read a post on the blog recently that you have liked, please let me know by way of a comment/retweet. Based on the comments/tweets I will be able to tailor more posts to suit your interested

 

It’s been a busy 7 days on the blog as I have started to take part in the my 2nd Ultimate Blog Challenge. Below are the top posts over the last week (by viewer count):

Image: Just2shutter / FreeDigitalPhotos.net

1. 5 Social Media Pet Peeves – The ugly side of social media
2. How Much Money Do I Need To Start My Own Business? – Since I made this post it has regularly topped the most viewed list, find out why..
3. When Does the UK Tax Year End – It came and went last week, but read here so you know for next year

Over to you

If you’ve read or commented on my blogs this week, which one have you thought was the best? By letting me know I can tailor the content to make it more relevant to you

If you have a skill or can provide a service that other people would buy, you should consider working for yourself as self-employed/sole trader. With the current economic climate as it is substantial pay rises from your employer are not likely. Becoming self-employed alongside your main job is suddenly an appealing idea; the extra income will be very welcome as the cost of living continues to soar.

But how do you register as self employed? It’s unbelievably easy. All the information about registering for Self Assessment can be found here. The direct link for registering your self as a sole trader can be found here. Once you’ve done this HMRC will have you listed as a sole trader and will inform you that they expect you to complete a tax return at the end of the financial year.

Remember that when you do work for yourself you need to keep accurate business records in order to complete you year end tax return.

If you need any help or advice with this please contact me sooner rather than later and allow me to compile your business’ accounts and complete your tax return, whilst you focus on running your business.

Image: Danilo Rizzuti / FreeDigitalPhotos.net

If you are registered as self-employed the UK tax year runs from 6th April until the 5th April the following year.

All transactions relating to your business during this time should be collated to form your accounts for that period, and the final figures transferred over onto your self assessment tax return.

The deadline for filing the paper copy of your tax return is the 31st October

The deadline for filing your tax return online is the 31st January.

All tax due must be paid by the 31st January, along with any payments on account that you need to make.

If you need any help with your self assessment tax return please contact me via email or phone – 07833 562 674

After a lot of hard work you have finally won a big contract and are looking forward to reaping the rewards and receiving payment. Most companies will make a payment run once a week or once a month, if your invoice is missed off you will receive payment late. Cash is king and keeping cash flowing into your business is key to staying in business.

The majority of companies now pay via electronic transfer and will only realise that they do not have your bank details when the time comes to produce their payment run. They will probably give you one call that week for your details, if you miss the call then you’re going to be paid late.

How can you avoid this situation? Simple, make sure your bank details are included on all of your invoices. Your customer then has no excuse not to pay on time, assuming that your invoice is valid and no disputes have arisen. It will take you a few minutes to add the bank details to your invoice template but could save you lots of time chasing payments.

You’ve got the idea, you’ve got the skills and most importantly you’ve got the motivation to become self-employed. But do you know how to register as self-employed with HMRC?

Thankfully it is not as difficult as you may think – you can either fill in one form which can be found here – Form CWF1 , or you can fill in the same form online at the HMRC Website. Both are very easy to do and I recommend using the online version as there is always the chance that the paper form could go missing in the postal system.

It’s as simple as that!

If you are considering outsourcing your book-keeping/accounting to a 3rd party (Why Should I Outsource?) it will be beneficial if you send form 64-8 to HMRC once you have chosen who you would like to act upon your behalf. The form authorises HMRC to communicate with an accountant, tax agent or adviser acting on your behalf.

2 simple forms and you’re all set for self employment.

In a previous post I briefly mentioned that the Flat Rate Scheme (FRS) could simplify your VAT accounting and also save you some money along the way. With this short post I’ll aim to give you a better understanding of the scheme.

The simplest way to describe the FRS is: You pay a set percentage of your VAT inclusive turnover to HMRC, but you cannot claim VAT back on purchases. The percentage will differ from business to business.

There are some qualifying criteria that your business must meet:

• Your estimated VAT taxable turnover – excluding VAT – in the next year will be £150,000 or less.
• Once you join the scheme you can stay in it until your total business income is more than £230,000.

You cannot join the FRS if:

• You were in the scheme and left during the previous 12 months
• You are, or have been within the previous 24 months
  • Eligible to join an existing VAT group
  • Registered for VAT as a division of a larger business
• You use one of the margin schemes for second-hand goods, art, antiques and collectibles, the Tour Operators’ Margin Scheme, or the Capital Goods Scheme
• You have been convicted of a VAT offence or charged a penalty for VAT evasion in the last year
• Your business is closely associated with another business

If your business provides a service and your purchases are minimal the FRS could be beneficial to you as you may possibly pay a lower amount of VAT than if you were registered under the standard scheme.

For example, if your business is a computer repair company the rate of VAT you would pay under the FRS would be 10.5% (9.5% in the first year as you are given a deduction). If your sales for the quarter were £20,000, the amount of VAT you would pay is £1,900 (£20,000 x 9.5%). Under the normal scheme you would have paid £4,000 less any VAT on purchases.

In this example if your purchases for the quarter are below £10,500 net (VAT – £10,500 x 20% = £2,100) you would be saving money by being part of the FRS .

The two major advantages of the FRS are:

• Peace of mind. With less chance of mistakes, you have fewer worries about getting your VAT right.
• Certainty. You always know what percentage of your takings you will have to pay to HMRC.

As always with important decision like this take time to investigate if it would represent a significant saving to your business. If you are unsure always seek advice from someone!

 

Flat Rate Scheme for VAT

Source: Simply Business

There is no doubt about it, if you work for yourself your relationships will suffer to some extent. Quite often to reach your goals, in the early stages, you will work twice as many hours for half as much pay as you would in a ‘normal’ job. A lot of your time will be devoted to getting your business up and running and making a healthy profit. This may upset your nearest and dearest as you are not paying them as much attention as they would like you to. Here are some tips to help keep your family relations under control:

• Explain why you are working so many hours and how the family will benefit from it.
• Try to involve your family in the business (if possible). Is there something that needs doing that someone else could easily do e.g going to the post box to send out invoices etc… You don’t have to do it all yourself.
• Arrange times when you will devote the full day to the family and not go near the office.
• If you win a new contract/client or make a big sale, celebrate and take the family out for a meal. They will feel like part of your success.
• If you are mega busy explain that the work you are doing is going to earn you a lot of money which could be used to go away for a family holiday/break. If you run a Ltd company make sure you withdraw the money in the correct way.
• Ask if your family are able to offer any ideas about how you can work smarter. Quite often someone from the outside will notice something that can be improved very quickly.

The early stages of any business are always tough, but with the help and support from those around you it can become a lot less stressful.

Have you started a new business venture lately? If so how do you manage to keep the peace in your house?