Becoming Self Employed

This morning I attended a free course, provided by the inland revenue on becoming self employed.
This covered what you should do when you want to be self employed, the timescale you have to do it in, what records to keep and why, what kind of items are tax-deductable, National Insurance contributions and how to work out what tax you'll be due to pay (if any).
Thinking about becoming self employed is a scary thing! There are so many things you need to think about and that you'll be liable for, that it could put you off leaving your 'employee' secure income where everything is done for you. However, this course is very useful in helping you get prepared and certainly made me feel more confident about it all.
I knew some of the information  already- for example I knew some business items were tax deductable and I knew records/ accounts had to be kept but I didnt know that NI contributions have to be paid weekly by direct debit as soon as you register to become self employed, I didnt know that the assets I currently have, including the very computer I am typing this on are tax deductable to a certain degree and I didnt know how much I could earn before I would even owe any tax. Now I do :D

It also covered VAT liablilities briefly although there is a course for this seperately if it applies to you.

There is a lot of work involved but to be honest, once you're up and running, if you slot it into your weekly routine it won't take long and will make your self assessment tax return a lot easier. I plan to attend a course on self assessment as well nearer the time!

So to become self employed these are the key points you'll need to do/ consider:

• Register that you're self employed by either phoning the helpline, completing a form or online. You can register even if you are still working (as an employee, full or part time) but you must register within three months of starting to trade/ as soon as you actively start seeking customers or you may be liable for penalties.
• Compile an assets register. This is a list of everything you already own which you plan to use for your business and their value at the time (you cannot claim full value and all valuations must be realistic- do your research). This would include any 'stock' you have ready for sale.
• Start an accounts book - either using specific software, accounts books or simple excel sheets. The course provided an example of account sheets.
• Start an efficient records system. This is to log all your incomings and outgoings. You will need to keep receipts or logs of everything otherwise you may not be able to deduct it from your tax bill.
• Consider a business bank account. As far as the Inland Revenue is concerned, it's not essential you can use your own but it may help you keep a track of your accounts better and sometimes there are benefits to having a seperate business account - for example some banks will offer freebies and free business support.
• Look into help/ support/ workshops specifically for starting up a business. Your local council or business link will most likely offer them. Not only will they give you advice, it's great networking and they may tell you about grants and funding that you did not know you are eligible for!

Well, I'm away now to get started on the list but please, do think about attending a course like this - it's free and so it will only cost a morning of your time but could save you time and a lot of money in the future!