Self employed, am I doing it right?
Discussion
Firstly, I'm not going to mention the business name unless anyone is genuinely interested, as I don't want to be seen as touting for business, so...
I'm registered as self employed, all info given about my work.
All receipts/invoices kept from all purchases from postage stamps to materials.
eBay sales invoices printed out every month.
Books kept on a monthly basis.
Separate paypal account set up with business.
Separate eBay account set up.
New email set up.
Website set up.
Facebook page set up.
I may have missed something important here, but I can't think of it at the moment.
So I'm after any advice about anything else I need a heads up with please.
I think i'm going in the right direction as I am managing to buy all my new stock and materials from my paypal profit at the moment, but I haven't sat and totalled up the complete profit/loss since I started in Aug, but I know I haven't made a loss yet.
Thanks for taking the time to read guys and gals
I'm registered as self employed, all info given about my work.
All receipts/invoices kept from all purchases from postage stamps to materials.
eBay sales invoices printed out every month.
Books kept on a monthly basis.
Separate paypal account set up with business.
Separate eBay account set up.
New email set up.
Website set up.
Facebook page set up.
I may have missed something important here, but I can't think of it at the moment.
So I'm after any advice about anything else I need a heads up with please.
I think i'm going in the right direction as I am managing to buy all my new stock and materials from my paypal profit at the moment, but I haven't sat and totalled up the complete profit/loss since I started in Aug, but I know I haven't made a loss yet.
Thanks for taking the time to read guys and gals
Seems fairly comprehensive to me. All you need to do now is take 'drawings' (ie money for private use) from your business (Paypal) account to your normal current account.
In time perhaps you can get away from the eBay/Paypal structure as it does kill margins, though I appreciate you need the 'shop window' for now.
I don't think you need an accountant, it's too simple. A bookeeper should be fine.
In time perhaps you can get away from the eBay/Paypal structure as it does kill margins, though I appreciate you need the 'shop window' for now.
I don't think you need an accountant, it's too simple. A bookeeper should be fine.
michael1987 said:
At the end of a year you will need an accountant, a good accountant should be able to claim back stuff you would never think of, proportion of your council tax again your company, electric etcccc if you work from home!
Hope the business continues being good
I'd get one on board earlier rather than later.Hope the business continues being good
Countdown said:
Business slow Eric? 
Not all all.I don't particlarly want new clients right at this minute. My advice is totally altruistic. I really do think that someone starting out running their own business is well advised to speak to an accountant as early in proceedings as possible.
Hoofy said:
I like to troll accountants by calling them 2 days before end of the financial year and finding out if they can do my accounts for me. 
In what way do you look on that as "trolling"? Asking an accountant to prepare your accounts before the end of your financial year is, to me, eminently sensible.Set up savings accounts for your vat and end of year tax. Divert 20% of all takings into them then you have no nasty suprises at the end of the quarter / year when you have to pay out.
At also acts as a nice little cash flow pot when you need to buy something up front. This is how I have run my accounts for two years and it has worked really well, but it is only from experience have lost a business before (for other reasons).
V.
At also acts as a nice little cash flow pot when you need to buy something up front. This is how I have run my accounts for two years and it has worked really well, but it is only from experience have lost a business before (for other reasons).
V.
Hysteria1983 said:
I don't think an accountant will be needed as I doubt I will earn the min amount required for paying tax. Its a small business at the moment, and even though its growing, tax reductions on heating, fuel etc wont come into play for a while.
If it does, happy days
Do you have other sources of income?If it does, happy days
Do you already pay tax on those other sources of income?
Is your business making a profit or a loss.
If a profit - you will pay tax.
If a loss, and you already pay tax under (say) PAYE, you could be able to offset the business losses and get some of your PAYE refunded to you.
What about Capital Allowances?
Have you bought or leased equipment?
What type of claims do you intend to make for these types of costs.
Have you considered costs such as "Use of Home as Office"?
Lots to think about.
Eric Mc said:
Do you have other sources of income? - No
Do you already pay tax on those other sources of income? - N/A
Is your business making a profit or a loss. - Profit
If a profit - you will pay tax. - Not true, only if I earn over the tax free allowance.
If a loss, and you already pay tax under (say) PAYE, you could be able to offset the business losses and get some of your PAYE refunded to you.
What about Csapital Allowances?
Have you bought or leased equipment? I owned all my equipment prior to setting up due to a hobby
What type of claims do you intend to make for these types of costs.
Have you consudered costs such as "Use of Home as Office"?
Lots to think about.
Do you already pay tax on those other sources of income? - N/A
Is your business making a profit or a loss. - Profit
If a profit - you will pay tax. - Not true, only if I earn over the tax free allowance.
If a loss, and you already pay tax under (say) PAYE, you could be able to offset the business losses and get some of your PAYE refunded to you.
What about Csapital Allowances?
Have you bought or leased equipment? I owned all my equipment prior to setting up due to a hobby
What type of claims do you intend to make for these types of costs.
Have you consudered costs such as "Use of Home as Office"?
Lots to think about.
Hysteria1983 said:
Eric Mc said:
Do you have other sources of income? - No
Do you already pay tax on those other sources of income? - N/A
Is your business making a profit or a loss. - Profit
If a profit - you will pay tax. - Not true, only if I earn over the tax free allowance.
If a loss, and you already pay tax under (say) PAYE, you could be able to offset the business losses and get some of your PAYE refunded to you.
What about Csapital Allowances?
Have you bought or leased equipment? I owned all my equipment prior to setting up due to a hobby
What type of claims do you intend to make for these types of costs.
Have you consudered costs such as "Use of Home as Office"?
Lots to think about.
Do you already pay tax on those other sources of income? - N/A
Is your business making a profit or a loss. - Profit
If a profit - you will pay tax. - Not true, only if I earn over the tax free allowance.
If a loss, and you already pay tax under (say) PAYE, you could be able to offset the business losses and get some of your PAYE refunded to you.
What about Csapital Allowances?
Have you bought or leased equipment? I owned all my equipment prior to setting up due to a hobby
What type of claims do you intend to make for these types of costs.
Have you consudered costs such as "Use of Home as Office"?
Lots to think about.
I presume your business profit will also be below the Class 2 NI Lower Earnings Threshold? (This threshold is NOT the same as the Personal Tax Allowance).
If it is, you will not have to pay Class 2 NI. However, you are supposed to notify HMRC in advance that you weill not be liable to Class 2 and you need to make a claim for the Small Earnings Exception in advance. I presume you have done that?
Regarding Capital ALlowances, if you have introduced assets into the business that you previously had owned (such as a vehicle or a computer) you can STILL claim Capital Allowances for those items. You can of course, claim Capital Allowances purchased since the start up of the business too.
Do you have any savings income such as Interest.
If you have, is it taxed at source?
Eric Mc said:
Fair enough. If you are making a profit below the personal tax allowance and you have no other income then there will be no tax liability arising.
I presume your business profit will also be below the Class 2 NI Lower Earnings Threshold? (This threshold is NOT the same as the Personal Tax Allowance).
If it is, you will not have to pay Class 2 NI. However, you are supposed to notify HMRC in advance that you weill not be liable to Class 2 and you need to make a claim for the Small Earnings Exception in advance. I presume you have done that?
Regarding Capital ALlowances, if you have introduced assets into the business that you previously had owned (such as a vehicle or a computer) you can STILL claim Capital Allowances for those items. You can of course, claim Capital Allowances purchased since the start up of the business too.
Do you have any savings income such as Interest.
If you have, is it taxed at source?
Yes the NI has all been looked into. I might consider the capital allowances if the buisness starts making a considerable amount.I presume your business profit will also be below the Class 2 NI Lower Earnings Threshold? (This threshold is NOT the same as the Personal Tax Allowance).
If it is, you will not have to pay Class 2 NI. However, you are supposed to notify HMRC in advance that you weill not be liable to Class 2 and you need to make a claim for the Small Earnings Exception in advance. I presume you have done that?
Regarding Capital ALlowances, if you have introduced assets into the business that you previously had owned (such as a vehicle or a computer) you can STILL claim Capital Allowances for those items. You can of course, claim Capital Allowances purchased since the start up of the business too.
Do you have any savings income such as Interest.
If you have, is it taxed at source?
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