New to self employment. Any tips for Day 1?

[jimbo84]

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.

There are benefits, good ones, but the grass isn't always greener, there is a lot of risk. One of the main issues is people will not pay you on time, despite hounding them for it, I've always managed to get paid every invoice up to now but I've had them outstanding at 12 months before now (that is rare though) but people/companies trying it on is very common you are often at the mercy of their accounts department. I live well within my means but I was close to being kicked out of my then rented accommodation a couple of years into being self employed due to a down turn in work.

After some great and successful years I became ill in autumn 2016 which meant I can no longer work the way I used to, I had to completely change the way I work and in part what I do... while I couldn't work there was no cover/sickpay for that. The total cost of that has been huge. Luckily I have a very understanding better half and through her support we/I have survived and am trying to get back to making a reasonable living from self employment.

Self employment is hard and you have to put in a lot of work to succeed (unless you hit it lucky) so the perks/benefits you can gain are often well earned.

 

[rtbcomp]

^^ Exactly - if a customer decides he doesn't want you to work for him any more, you don't get any warnings or notice. This is especially dangerous if you work as a self-employed person for one customer. If that is the case, try and build up a wider customer base.

It's a pity nobody offers insurance to cover you whilst out of work.

 

[wristpin]

Put as much effort at getting paid (on time) as you do into earning it!

 

[maz0]

Buy the biggest tub of Vaseline you can find, it will come in handy every January. On a serious note though, save all your receipts and claim for everything and anything. Be careful of the 'pay in advance' tax thing, I don't know the in's and out's but it caught out my missus a few years back. Came home to her in tears on the phone because they were demanding next years tax paid up front before she had even earned it. We were living hand to mouth at the time and the wee jobsworth on the phone was telling her to go get a credit card or a loan or she was getting taken to court.

 

[ajlelectronics]

^^ Exactly - if a customer decides he doesn't want you to work for him any more, you don't get any warnings or notice. This is especially dangerous if you work as a self-employed person for one customer. If that is the case, try and build up a wider customer base.

It's a pity nobody offers insurance to cover you whilst out of work.

Oh yes, I have been caught out twice allowing the tail to wag the dog.

 

[cardiffrob]

Phew! Quick replies. I'm starting out as a Simulator instructor so I will mostly work at the local airport but be able to instruct elsewhere. The work will be about 10-15 days per month. I've registered as self employed, got a UTR (have never done my own tax before) and numerous other codes and passwords. It says I need to get a return in by the end of January but is that the case? I've not earned a penny other than the PAYE from my previous job that ended in December.

 

[ajlelectronics]

Buy the biggest tub of Vaseline you can find, it will come in handy every January. On a serious note though, save all your receipts and claim for everything and anything. Be careful of the 'pay in advance' tax thing, I don't know the in's and out's but it caught out my missus a few years back. Came home to her in tears on the phone because they were demanding next years tax paid up front before she had even earned it. We were living hand to mouth at the time and the wee jobsworth on the phone was telling her to go get a credit card or a loan or she was getting taken to court.

It is a disgusting system. You have to pay tax based on what you think you will earn in the next 12 months. If you are wrong, they can penalise you for that too. I am really glad that I will be retiring in four and a half years, although they keep their talons into you for a while after ceasing business too.

 

[grim_d]

There are benefits, good ones, but the grass isn't always greener, there is a lot of risk. .

Of course. I wasn't attempting to make it seem otherwise. I have been self employed but I wasn't a ltd company. I hated the work so packed it in.

It's risk Vs reward, a gamble if you will.

Basically I was having an underhanded moan at having to pay so much tax, regardless or employment type.

 

[zx9]

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.

HMRC do frequent webinars (if that is the right word) on many topics aimed at the self employed, you should be able to find a list of them and sign up on the HMRC web site, probably under the Self Assessment pages.

Remember your clients are customers not friends no mater how long you have known them.

 

[8ob]

Aside of income tax/nic which are pretty straightforward you need to keep an eye on the VAT threshold, stray over that and it can get very messy. One thing that comes to mind is personal indemnity insurance (PI), you really do need to look at protecting yourself.

Bob

 

[jimbo84]

^^ Exactly - if a customer decides he doesn't want you to work for him any more, you don't get any warnings or notice. This is especially dangerous if you work as a self-employed person for one customer. If that is the case, try and build up a wider customer base.

It's a pity nobody offers insurance to cover you whilst out of work.

It's good advice to get cover, unfortunately advice that I and many others don't take, quite naively thought I'd never need it, hindsight is a wonderful thing.

Of course. I wasn't attempting to make it seem otherwise. I have been self employed but I wasn't a ltd company. I hated the work so packed it in.

It's risk Vs reward, a gamble if you will.

Basically I was having an underhanded moan at having to pay so much tax, regardless or employment type.

Agreed it definitely is.

Tax is unfair on most of us apart from the offshore super companies.

 

[Endeleus]

Day 1 advice:

• Public Liability Insurance - make sure you have cover before you do your first job
• Professional Indemnity Insurance - depending on what you're teaching, may be prudent to have this cover as well
• HMRC, as others have already stated. Use the free resources, and don't be scared to call them and ask about anything you're unsure of. In general, when you actually manage to speak to a real person in HMRC, they tend to be fairly understanding and helpful.
• Forecast your cashflow - write down your expectations and targets, and revise them at least monthly against your actuals until you understand your figures inside out.
• Work out if you need to be VAT registered. Do you expect to turn over more than £86k (ish) in your first year, or will any of your clients expect / insist you are VAT registered? If you deal with end consumers then there may be benfit to trying to avoid registration as long as possible.
• Set up a business bank account

As others have said, invoice on time, and start chasing payments when they're one day overdue - just a polite phone call to "check the invoice was received, and there are no disputes?" is often enough to let new clients know to pay you on time. Many companies simply don't pay invoices until someone chases them, so you need to be the one they know will pester them if they're late.

 

[mrsbruce]

Phew! Quick replies. I'm starting out as a Simulator instructor so I will mostly work at the local airport but be able to instruct elsewhere. The work will be about 10-15 days per month. I've registered as self employed, got a UTR (have never done my own tax before) and numerous other codes and passwords. It says I need to get a return in by the end of January but is that the case? I've not earned a penny other than the PAYE from my previous job that ended in December.

If I were you, then yes, get a return in, even if you haven’t earned anything. It keeps you right, and if they’ve asked for a return and you don’t do it, it’s a £100 fine.

It doesn’t have to be too detailed just money in (zero), money out (whatever), and complete the paye for previous job.

 

[cardiffrob]

Just to confirm, is this 'January' deadline for online filing for 2017-2018? If so, I've already covered that through PAYE, haven't I?

 

[rtbcomp]

...

Remember your clients are customers not friends no mater how long you have known them.

That is so true. One of my neighbours ran a company that was one of my customers, they went under owing me £500, which caused a bit of tension. He was adamant everyone would get paid, but by the time the administrators and the bank had finished nobody else got a cent.

 

[rtbcomp]

Just to confirm, is this 'January' deadline for online filing for 2017-2018? If so, I've already covered that through PAYE, haven't I?

It is for 2017-18. If you try to submit an online self-assessment it should tell you whether or not one is needed. IIRC when you log on to the SA page it will show a list of returns you need to send. I don't think it will let you submit one if it isn't needed.

 

[ajlelectronics]

Just to confirm, is this 'January' deadline for online filing for 2017-2018? If so, I've already covered that through PAYE, haven't I?

Question which should be directed to your chosen book keeper Rob!

 

[mrsbruce]

Just to confirm, is this 'January' deadline for online filing for 2017-2018? If so, I've already covered that through PAYE, haven't I?

As rtbcom says, go online, submit form, they will tell you if it’s really needed, and you have confirmation you tried. As I said, better to comply than get hit with a fine. It’s only a 20 minute job if you’ve got your paperwork in front of you.

 

[Revs1972]

That is so true. One of my neighbours ran a company that was one of my customers, they went under owing me £500, which caused a bit of tension. He was adamant everyone would get paid, but by the time the administrators and the bank had finished nobody else got a cent.

Was he living the good life himself after his company went ? Ive seen that a couple of times. As in they've made sure they were ok financially before the LTD went pop

 

[Revs1972]

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

Then google "Mitchell and Webb -working from home"