New to self employment. Any tips for Day 1?

[cardiffrob]

After 30 years employed with PAYE, pension, healthcare etc I find myself looking at a new future as a self-employed instructor.
Having never done anything like this before I was hoping someone could give me a few pointers as to what I should do from the start with regards to registering, tax, National Insurance etc.
To be honest, I'm a bit out of my depth!
Cheers
Rob

 

[eLuSiVeMiTe]

Register online for self assessment and have a read through there site.
What are you doing?

 

[ajlelectronics]

After 30 years employed with PAYE, pension, healthcare etc I find myself looking at a new future as a self-employed instructor.
Having never done anything like this before I was hoping someone could give me a few pointers as to what I should do from the start with regards to registering, tax, National Insurance etc.
To be honest, I'm a bit out of my depth!
Cheers
Rob

Hi Rob, welcome to our world! Your best bet is to find a decent book keeper who can advise you and keep everything together. First point though is to keep receipts for EVERYTHING. Anything business related for the past six months too, so any stationery, office chair, computer equipment or work clothing etc.

 

[cheb]

Transfer about a third of your income into a separate bank account to pay the tax man. It'll not be that much but it also gets you some savings/buffering money.

 

[rtbcomp]

.. First point though is to keep receipts for EVERYTHING. ..

I'd include personal expenditure in that too. You never know when HMRC may decide to put you under scrutiny.

 

[cumbriasteve]

HMRC may still run the short course free of charge, was well worth attending and apart from detailing what you have to pay there was as much if not more info on how you can save tax.

Just enquire at your local office, I found them very helpful and down to earth.

 

[Burdekin]

Have you got a wife? If so depending on how much she earns you may want to make her a director as well and she can also take dividends and reduce your overall tax by a good amount.

 

[eLuSiVeMiTe]

Sole trader or ltd makes a difference to how you proceed too.

 

[ajlelectronics]

Sole trader or ltd makes a difference to how you proceed too.

In Rob's position, a Ltd company makes little sense.

 

[eLuSiVeMiTe]

In Rob's position, a Ltd company makes little sense.

I know. Written purely because directors were mentioned.

 

[Burdekin]

I know. Written purely because directors were mentioned.

I was a ltd but a few years ago now. That is what contractors do up here in the oil industry.

 

[Screwdriver]

Take the day off. Start as you mean to go on...

 

[jimbo84]

Get an accountant (a good one) it was about 5 years before I got one wish I'd have done it sooner, the things that can be claimed for and tax that can be saved is quite surprising.

Don't let people take advantage by using you as their overdraft, get on them making sure they're paying you bang on time.

 

[grim_d]

Get an accountant (a good one) it was about 5 years before I got one wish I'd have done it sooner, the things that can be claimed for and tax that can be saved is quite surprising.

Surprising? It's absolutely astonishing what can seemingly be claimed for legally. (I don't know personally)

If PAYE individuals could claim half as much we would all be a lot richer.

 

[julianf]

Yeah, id re-iterate that one -

Make sure your payment terms are in writing from the start.
Look up whatever the maximum chargeable interest is for late payments.
Stick to your terms exactly.

Dont get into the trap of working for large companies who use you as cheap overdraft. You think that, if you impose terms, they will go elsewhere, but the reality is that a large company will have other suppliers that it cant mess about. So, when they do the payment run, be the person who gets paid, not the mug who gets pushed back to next month.

Get your invoices in on time. Make it look like youre on the ball with paperwork (even if its the dullest thing ever)

 

[julianf]

If PAYE individuals could claim half as much we would all be a lot richer.

Its shocking that noone with a ltd, pays tax at greater then corporation rate. And, what is is, about £200 per year NI?

 

[grim_d]

And, what is is, about £200 per year NI?

I hope that's not true, I pay significantly more than that every month in NI.

 

[rtbcomp]

...

If PAYE individuals could claim half as much we would all be a lot richer.

You can only claim for stuff used in your business. People on PAYE can claim for stuff used exclusively in their job if the employer doesn't provide them (eg PPE ). Don't forget you only get a tax saving, not the cost of the item, from HMRC.

 

[merryman]

If PAYE individuals could claim half as much we would all be a lot richer.

Not all jam, you have to pay the accountant and keep all those books. From next year a new system will mean four times a year accounts to the revenue, so more accounting costs, and excel accounts won't be acceptable, so more expense on accounting software too.

 

[Burdekin]

Its shocking that noone with a ltd, pays tax at greater then corporation rate. And, what is is, about £200 per year NI?

You pay additional tax on your salary and dividends.