working as a sole trader
sharonj
Registered Posts: 166 Dedicated contributor 🦉
Hi,
I wonder if anyone who is qualified would be able to give me some advice. I'm studying for the AAT but have only just completed the Certificate level. My husband was recently made redundant, a nightmare situation that I know a lot of other people are having to deal with at the moment. Luckily he is good at fixing things/painting and general Handyman jobs so we have decided to set him up as a self employed Handyman until the job market improves.
I need to start doing his accounts now as we really can't afford accountancy bills at the moment. I wonder if anyone can tell me the type of accounts we would need to be keeping, what things we can claim tax relief on and generally how we would go about keeping the correct records.
Thanks
I wonder if anyone who is qualified would be able to give me some advice. I'm studying for the AAT but have only just completed the Certificate level. My husband was recently made redundant, a nightmare situation that I know a lot of other people are having to deal with at the moment. Luckily he is good at fixing things/painting and general Handyman jobs so we have decided to set him up as a self employed Handyman until the job market improves.
I need to start doing his accounts now as we really can't afford accountancy bills at the moment. I wonder if anyone can tell me the type of accounts we would need to be keeping, what things we can claim tax relief on and generally how we would go about keeping the correct records.
Thanks
0
Comments
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As a good start:-
Register with HMRC as self employed
Open a seperate business bank account
Keep all receipts invoices etc
keep a cash book (i.e. a record of all business income and expenditure)
Even though an accountant is a cost providing good base records should keep the cost fairly low. If you are unsure it may be me worth paying for someone to do it in the long run as mistakes will be much more expensive to correct later.Regards,
Burg0 -
Benefits and AIA
First of all, to come out of your problem, apply for the tax credit if you haven't done so and other benefits such as housing benefit and council tax benefit.
Then, if you buy a van (for example) for your business you would be able to enjoy 100% AIA for 2009/10, which will reduce your tax bill significantly.0 -
Hi Emthi/Burg
Thanks for your advice. My husband has registered as self employed with HMRC and we have opened a bank account up in his name for the business. As for paying for someone to look at everything in detail I think we will try on our own initially and if we have any problems or seem to be struggling we may well look at making an appointment with an accountant but money is extremely tight at the moment.
Emthi, I don't think thatI can claim housing benefit/council tax benefit as I work and my salary is not necessarily fantastic but enough that I would not be able to claim any benefits. We did also look into the tax credit but we would only be entitled to about 40 pounds a month.
Would you be able to please explain to me what you mean about being able to enjoy 100 % AIA for 2009/2010 if we were to buy a van. I'm not sure how this works. I understand that if we buy materials, use petrol or mobile phone costs, advertising etc that we can deduct this from the gross earnings before it is taxed and only pay tax on what is left. Is it that if we were to buy a van for say 2000 pounds and my husbands tax bill for the year was say 4000 pounds that he would only have to pay 2000 pounds??? I may have this completely wrong but I really don't have a good understanding of this at the moment.
Many thanks for your help0 -
You should be OK preparing your own books and accounts but I strongly recommend you have an accountant prepare the tax return. Unfortunately tax isn't as simple as you just pay tax on your profits per your accounts, there's capital allowances, overlap profits and all sorts to think about. This is covered in the tax units of Technician.
When preparing the accounts you should also consider a use of home claim, I assume you will be using a room in your home to prepare the books etc. so is definitely worth looking at.0 -
You should be OK preparing your own books and accounts but I strongly recommend you have an accountant prepare the tax return. Unfortunately tax isn't as simple as you just pay tax on your profits per your accounts, there's capital allowances, overlap profits and all sorts to think about. This is covered in the tax units of Technician.
When preparing the accounts you should also consider a use of home claim, I assume you will be using a room in your home to prepare the books etc. so is definitely worth looking at.
Ok, thanks. I'll definately look at that.0
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