A lot of people nowadays choose to be self-employed instead of working for a company. There are a couple of main types of self-employment. Running your own small business or working as a freelancer is just some of them.
Things To Know If You Are Self-Employed
One of the main benefits of becoming self-employed is complete control when you are in charge, and on the other hand. Starting up a company and running your own business is not so demanding anymore.
Becoming self-employed does not only mean that you need to own a small business. You can be self-employed while working for someone else, like testing makeup or some other products but by choosing your own pace.
Of course, when starting this journey, there are a couple of things you should know, and in the following text. You can find the six most important items.
Be in Control of Your Bills
The worst thing you can do while being self-employed is not to know how much money you can use and not know how to manage it. On the other hand, there are a couple of ways that can keep you on the safe side, and one of them is the apps that can help you manage your receipts.
It may appear amusing to keep track of even the smallest purchases since we often spend money. Without realizing it and then become concerned that we are running out of funds. This is why you need to stay on top of your records and keep track of receipts using some popular apps will make your life much easier.
There is no need to make hoards of receipts over your house. By using these apps that use the technology of scanning barcodes or QR, the job is much easier. So, all you will need is a starting budget and you will be provided with a final balance at the end of the month.
Register as a Self-Employed at HMRC
The moment you start working as self-employed, you need to register yourself in HMRC. The registration in HMRC depends on certain circumstances.
The thing is that when you become self-employed. You are becoming responsible for how much taxes you will need to pay as well as the Self Assessment Tax Return at the end of the year.
Keep Your Financial Records Accurate
In order to be a successful self trader, you need to be in control of your books. Moreover, from the very beginning, you must keep clear and accurate records of every transaction and receipt. This will not only please the tax authorities, but it will also make it far easier to arrange the paperwork and keep you informed.
When it comes time to submit your VAT return and account information to your accountant, as well as complete the report on your self-assessment tax return, you will be able to figure this out quickly and efficiently, leaving room for development.
Invest in a Proper Insurance
When you are self-employed then you need to think of getting the insurance that will keep you secured in situations you cannot predict.
Depending on the type of your business and the industry you are working in, there are various types of insurance and covers they can offer you. The majority of small businesses usually take public liability insurance and especially if the customers are allowed to visit your premises.
This sort of insurance will keep you protected if your customers damage your property because of the business you are dealing with and if the third party gets to injure themselves.
Business Bank Account
Having a business bank account is vital. Although your personal income will be taxed alongside your business income, it is essential to separate these two. On the other hand, if you have planned to hold cash for a certain period of time, then, a good idea is to open a deposit account.
Understand If You Need to Register for VAT
VAT stands for the Value Added Tax. Regardless of the stage your business is at, you need to anticipate that you will hit your annual VAT threshold, so you will also need to register.
Normally, VAT rises by a couple of thousands every year and you need to inform the HMRC within 30 days or you will risk paying a fine.
Being self-employed is something that will give you certain leverage. Having your own business or working for someone who gives you complete independence will make it incomparably simpler for you to work.