Hey New Sole Traders! A Few Friendly Pointers! 👋
So, you're taking the leap and becoming a sole trader? That's fantastic! But, before you dive in, here are a few things to keep in mind:
Record Keeping is Your Superpower! 🦸♀️
Seriously, record EVERYTHING! Invoices, receipts, bank statements – you name it! It'll make tax time a breeze and help you understand your business's financial health.
Consider using accounting software or even a simple spreadsheet to stay organised.
Separate Those Bank Accounts! 🏦
Know Your Deadlines! 📅
Those HMRC deadlines are important! Mark them in your calendar, set reminders, do whatever it takes to avoid those late fees.
Registering for self assessment, and paying your taxes on time are very important.
Don't Forget National Insurance! 🤝
It's not just about income tax. Remember those National Insurance contributions! They're important for your future state pension.
VAT: Keep an Eye on That Turnover! 📈
If your turnover is getting close to £90,000, you'll need to register for VAT. Keep track of your sales!
Get to Grips with Expenses! 🧾
Understanding what you can claim as business expenses can significantly reduce your tax bill. Do some research or chat with an accountant.
Don't Be Afraid to Ask for Help! 🙋
Being a sole trader can feel a bit lonely at times. Don't hesitate to reach out to other business owners, accountants, or HMRC for advice.
Liability:
As a sole trader your personal assets are at risk. If your business has debts, or legal issues, your house, car, and savings could be used to pay them.
Your Address:
When you register as a sole trader, your home address can be publicly available.
Enjoy the Journey! 🥳
Being your own boss is an exciting adventure! Celebrate your successes and learn from your challenges.
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VAT Threshold Changes: Do You Need to Register (or Deregister)?
The amount you need to earn before registering for VAT has gone up to £90,000
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HMRC & AI: An Idiot’s Guide for Freelancers Who’d Rather Be Doing Anything Else
Think of HMRC as Michael Caine in that classic nosy neighbour role - leaning over the fence, peering into your garden, and muttering in that unmistakable voice: ‘Yes, I am a nosy neighbour.’ Only, instead of checking if you’ve cut the hedge, they’re checking if your tax return matches up with the shiny new car on your drive.
