So you have decided to become self-employed but not sure where to start in regards to your accounts?
The first and most important thing for you to do is of course register as a self-employed individual with HMRC. This is so they can ensure your are paying the tax owed on any profit you make, contributing to national insurance and abiding by the regulations set out in the running and naming of your business.
The process itself is very easy, you simply fill out the online application by visiting https://www.gov.uk/set-up-sole-trader and voila you’re all set!
It is important to note here that by registering as self-employed with HMRC you are abiding to their standards which states that it is your legal responsibility to keep records, file self-assessment tax returns and pay your income tax.
This is where an accountant or accountancy firm can help!
If keeping records and filing returns is not your forte then you should seriously consider hiring an accountancy service to help you. An accountant will assist with the filing of your tax returns and provide efficient bookkeeping – ridding you of the two most nagging admin jobs in business!
Believe us when we tell you that by delegating this part of your business you will have more time to focus on making your business successful and less time stressing and worrying about tax season. Any anyway…why wouldn’t you want clean and law abiding accounts? especially if you’re starting a new business! Also let’s not forget the hefty fines HMRC enforces should you get ANYTHING wrong within your tax returns/accounts – so it’s better to be safe than sorry.
There are a few different routes you can down when it comes to accounting, which are:
Online Cloud Accounting
The most cost-effective method is to purchase a digital cloud accounting software which you can download directly to your smart device, desktop computer etc and then use the system to manually input your own expenses & receipts. Our recommendation here would be https://zlogg.co.uk/ as they offer the lowest fixed monthly fees and are able to file your tax return for you as part of that fee. Many other cloud accounting software on the market don’t offer this great service.
Monthly Accountant
If you’re not too keen on the idea of doing your own accounts and would prefer a more personal service then a company like https://www.monthlyaccountant.co.uk/ would be perfect for you. Although slightly more expensive than cloud-based technology, this option does still give you the opportunity to spread the accountants rate out into a fixed monthly basis – reducing your yearly outgoings by getting rid of the large payments you usually get hit with when your self assessment is due! A monthly accountant can offer all elements of your accounting including year end accounts, monthly bookkeeping, self assessment-returns and even allows you to create a personal, bespoke package which so you can choose specific requirements you may have.
Hiring an Accountant
This option can be costly, so it’s worth thinking about whether you are able to splash large amounts of cash or not! Of course hiring an accountant directly has its perks, for example you only have to deal with one person which in itself is nice because you can build a good relationship and they in-turn become familiar with your business accounts and will know everything inside-and-out. This relationship with your accountant can then give you a one-to-one support system, helping you to make the best financial decisions for your business. Another advantage is that you have the choice of who you work with! By this we mean you get to personally choose who is good enough to take on your business accounts?
Finding the right accountant who can help is always difficult, we personally recommend https://andrewcrawfordaccounting.co.uk/ – they are an accountancy firm who offer specialist accounting in all areas including VAT, Corporations and much more. What’s even better is that they have been established for over 18 years so you know you’re in safe hands.
We understand there are a lot of decisions to be made with the accounting side of starting your own business and this is why we have written this blog, to try and make the process as stress-free and as easy as possible.
If you need any advice or are looking into monthly accounting then please feel free to contact one of our friendly accountants who will be happy to help.