Monday, 15 December 2008

Before You Go Self-Employed - Tips

Before you make the decision to go self-employment you need to be absolutely sure the 'red tape' hits you and just as important lose out on grants and loans that may be available for you. The Association of Chartered Certified Accountants (ACCA) play an important role in giving information and currently have a checklist for those starting out on the self-employed road.

Buying equipment for your business is a normal practice, you should be aware that tax relief is available in the form of capital allowances for this. If you buy to keep and use equipment in your business, such as vehicles, tools, computers and business furniture. This however does not include things you buy and sell for profit.

You need to register you current status with H. M. Revenue and Customs, this can be done online and the website will take you through the process. Be aware that if you don’t register you will face a fine.

The smooth running of any new business is about having the correct credit management systems and payment procedures in place, it is essential. A cash flow that is efficient is vital ad in the first year of any business expenditure is high and provisions need to be in place to ensure that money can flow into the business as well as flow out.

From the very start of your business make full and accurate records and accounts, this will make it easier to work out what your liabilities are in terms of the various taxes and National Insurance you are subject too pay. All records must be kept for six years for both business and private. A fine of up to £3,000 can be made if you fail to keep records. You may also be paying too much tax without full record to check.

Being Self-Employed, you have to pay your own National Insurance contributions by submitting your contributions on a quarterly basis. It is important to take care of your National Insurance, as you will lose out on state benefits that are related to the amount of National Insurance contributions you have made.

Completed and submitted tax returns on a yearly basis are required. A full tax return can be made online; this will save time and automatically calculates your tax when you file your return online. Make sure you check your tax calculation once you have received it, as this will form the basis of your payment.

Once all this is taken care of, you can get on with the business of making money with your business, the secret is to keep on top of things all the time, even if you have to pay an accountant to do so.

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