Bookkeeping - how hard is it really?

[laurakate]

It's definitely not worth paying for an accountant or even accounting software if you're a sole trader.

In hindsight, when you google for starting a business or talk to friends and family about it, a lot of business type jargon can be thrown around and it can make the task feel far more daunting than it actually is. As long as you know what your profit is, it's just a case of telling hmrc. They'll even help you fill the form out over the phone.

 

[RiaSarr]

I agree! im happy to help what way I can (at no cost) as it really is simple once you get started. Only tip I can give is to make sure you know the things you can claim for as that really helps too, especially in the first year. I see a lot of sole traders missing out by not claiming all or failing to meet the deadlines the online tax return system is self explanatory just data entry xx

 

[hctinks]

That will be fine. Have you registered as self employed and do you have a UTR number?

You can fill in your return via the paper method or online. When you fill in your tax return online HMRC will calculate the tax for you but I can help with an estimated tax liability if you know your income and expenses for the year x the paper method needs to be completed by October so online method gives you until the end of January following the tax year xx

Also hVe you chosen an accounting period? Mine is in line with the tax year which is easier.

In simple steps

1.register as self employed with hmrc
2. Record all transactions income and expenditure.
3. Receive. Notice to file a tax return from hmrc
4. Complete tax return
5. Pay tax/or receive repayment

Alternatively an accountant can do all the above for you x I do everything from start to finish for my clients but it is quite simple once you get into good habits xx

That's all amazing, just so much to do though!! I did register but unsure what or how I'd know what my UTR number is???

What would happen if it turns out I filled it all out incorrectly? I can see that happening! Def would chose the online method though.

And what's an accounting period? :-/ I've just started the business so my income starts from December at the moment??

Thank you so much for your reply xxxx

 

[hctinks]

It's definitely not worth paying for an accountant or even accounting software if you're a sole trader.

In hindsight, when you google for starting a business or talk to friends and family about it, a lot of business type jargon can be thrown around and it can make the task feel far more daunting than it actually is. As long as you know what your profit is, it's just a case of telling hmrc. They'll even help you fill the form out over the phone.

Yes! That's what scares me a little, all seems quite overwhelming!
I didn't know they helped over the phone, that's quite a relief.
So what I'm doing thus far (just writing everything down into a book) has me on the right track? And then for the tax year hmrc should be more than happy to help???

Thanks for the reply by the way xx

 

[hctinks]

I agree! im happy to help what way I can (at no cost) as it really is simple once you get started. Only tip I can give is to make sure you know the things you can claim for as that really helps too, especially in the first year. I see a lot of sole traders missing out by not claiming all or failing to meet the deadlines the online tax return system is self explanatory just data entry xx

Oh! Claims?! What can you claim for then? I didn't even know that existed, is that bad? Ha!! Xx

 

[fluffy26]

It's definitely not worth paying for an accountant or even accounting software if you're a sole trader.

In hindsight, when you google for starting a business or talk to friends and family about it, a lot of business type jargon can be thrown around and it can make the task feel far more daunting than it actually is. As long as you know what your profit is, it's just a case of telling hmrc. They'll even help you fill the form out over the phone.

I disagree, I'm a sole trader & have an accountant. I do my own basic book keeping throughout the year but then Hand everything over to my accountant & he completes my tax return, sends it back to me to sign & submits it! He's on hand throughout the year for any advice or questions I may have which I find invaluable! It can be very overwhelming initially starting a business with tax/hmrc etc & it's good to have someone on your side with extensive knowledge! Personally what I pay him for his service is so insignificant compared to what he has saved me in stress & tax!!! I'm coming up 16 years self-employed & wouldn't be without my accountant!

 

[CFBS]

Totally agree with Fluffy above.
I have always had an accountant and he has saved me lots, more than I pay him over the years.
Peace of mind is priceless.

 

[hazelb]

I had an accountant for years, but as my business settled down the book became very repetitive and I got used to understanding what was a tax allowable expense. I had a few tough years where my income dropped and I decided to do my books myself..I have been for abour 4 years and don't have any problems.
I would suggest contacting local colleges / business start up courses as they may well do a one day 'doing your own accounts' course. Ive done a couple of these over the years and have found them really helpful.

 

[CFBS]

If you have a business bank account then sometimes they run free courses for their small business customers. Worth asking.

 

[laurakate]

I think the no accountant thing is good if you earn below the tax threshold in the sense that there's nothing to work out really. You simply tell hmrc what you earnt and it's job done.

For a larger scale business where larger amounts of money are being dealt with, I can see where an accountant may be helpful.

There's a lot to be said for being realistic about the scope and limitations of your business when deciding whether or not to have an accountant.

 

[laurakate]

Yes! That's what scares me a little, all seems quite overwhelming!
I didn't know they helped over the phone, that's quite a relief.
So what I'm doing thus far (just writing everything down into a book) has me on the right track? And then for the tax year hmrc should be more than happy to help???

Thanks for the reply by the way xx

Sounds about right. If you've registered as self employed with hmrc then you've just got to keep doing what you are until they ask you to tell them what you earned which you'll be able to do from the book you're keeping.

 

[fluffy26]

I think the no accountant thing is good if you earn below the tax threshold in the sense that there's nothing to work out really. You simply tell hmrc what you earnt and it's job done.

For a larger scale business where larger amounts of money are being dealt with, I can see where an accountant may be helpful.

There's a lot to be said for being realistic about the scope and limitations of your business when deciding whether or not to have an accountant.

Just because your a sole trader doesn't mean you don't deal with large amounts of money! [emoji6][emoji4]

 

[RiaSarr]

Oh! Claims?! What can you claim for then? I didn't even know that existed, is that bad? Ha!! Xx

This is proberbly way too late but for others that may stumble across this thread the hmrc website has information on the list of allowable expenditure etc. This information can and often is updated which is where it is useful to have an accountant. An allowable expenditure is broadly defined as an expense that is Wholley and exclusively for the use of the business. There is however different types of expenditure and treatment (capital/revenue). For the average nail tech such as myself it doesn't get too complicated so those other types rarely crop up x

 

[Leggibone]

I have read this topic with interest as I'm trying o work out what I need to do myself,
Once I have my certificate from my course I'm going to get started, so I register with Hmrc, then complete a tax return? So if I start now am I completing a tax return now for the month or is the October 17 deadline for the 16/17 tax year?
Also i will be running this as an aside of my day job, (which i pay tax on my income for) so would I need to pay tax and NI for all of my profit from my nails venture?

 

[salonfrog]

I have read this topic with interest as I'm trying o work out what I need to do myself,
Once I have my certificate from my course I'm going to get started, so I register with Hmrc, then complete a tax return? So if I start now am I completing a tax return now for the month or is the October 17 deadline for the 16/17 tax year?
Also i will be running this as an aside of my day job, (which i pay tax on my income for) so would I need to pay tax and NI for all of my profit from my nails venture?

Hi

Exciting times for you!

You are currently in the tax year 17-18. So your first tax return will cover the period from when you start to 5 April 2018. This tax return will be due by the end of Oct 18 (if you are submitting it by post, which I would not recommend) or by 31st Jan 2019 if you submit via the HMRC website (which I would recommend).

Depending on your level of profits from your new venture, you will have to pay income tax and class 2 and class 4 national insurance, on top of the amount you already pay from your day job.

Hope that helps.