In part two of our special self-employment feature, we take a look at some more important factors that you should consider.
Get a business bank account
As a sole trader, although your business income will be taxed alongside your personal tax, it is vital to keep your business records and finances separate from your personal affairs.
For this reason, we recommend you open a separate business bank account. Shop around, as you can usually find deals offering you up to 24 months free business banking.
Typically, your new account will be “John Bloggs trading as, or T/A, your Business Name”. Once again, it looks more professional to have your business name on cheques and invoices.
If you’re likely to hold cash for some time, you should also open a business deposit account to get a little interest on your money, even if rates are still at historic lows.
Keep accurate and up-to-date financial records
To be a successful sole trader, you must keep on top of your books.
From the start, you are obliged to keep clear and accurate records of all your business transactions. Not only will this ensure that you keep the tax authorities happy, but you’ll find it so much easier to operate your business if you are organised and your paperwork is constantly updated. Check out online systems like cashflow, sage and Xero.
When the time comes to submit your VAT return (if you’re VAT registered), pass your accounts information to your accountant and complete your annual self-assessment tax return, you’ll be able to get these done quickly and efficiently – giving you more time to work on your new business.
We hope that you enjoyed our Self-employment tips – Part Two and found it useful – don’t forget to check out part one of our special self-employment feature too, if you did.
If you need guidance about becoming self-employed, Omni Chartered Accountants are happy to help – request a free of charge call back from our website today or click here and we will contact you to discuss your situation.