My Top 10 Tips for Self-Employment

Top 10’s, they are everywhere! Music, Fashion, Films….Underwear! If you’re newly self-employed or been at it for sometime these are for you!

When you start out on your own for the very first time nothing can prepare you for the amount of responsibility HMRC expects. So, after being in business myself for over 5 years now, this is my list of things you should be mindful of when you’re your own boss!

  1. Even if you haven’t made a profit on your self-employment, you still need to declare the income and expenses on your annual tax return.

    If you don’t then you can’t claim back losses from previous tax years!

  2. Make sure that you keep receipts / documentation for your self-employed income and expenses, no matter how small!

    Let us in the know decide if it’s allowable or not.

  3. You’ll have to keep records of your self-employed business for six years after the tax year they’re for, in case HMRC ask to see these.

    So that’s 7 years in total, make sure you have space!

  4. Remember to record and claim your business mileage for all trips, as these can add up to a significant amount over the year!!

    45 pence a mile and up to 10,000 miles totals £4,500 of expenses you can claim if you keep the records!

  5. If you are both self-employed and employed, then any self-employment losses can be set against your employment income and could generate a refund from any tax already paid on employment.
  6. Watch out for payments on account, they can add 50% to the first tax bill you were expecting after you start.

    But only if the amount of tax you owe goes over £1,000, so a £1,200 tax bill can turn into £1,800 VERY easily.

  7. How much does it really cost you to do your own tax return? Time taken x your hourly rate (+hassle + worry)…think about it.

    If you think it is worth it then great, you have loads of spare time 🙂

  8. Keep up to date with changes in HMRC regulations or use a specialist who can do this for you and ensure that you are taking the best advantage of these.

    Not only do these change every April, but certain laws and legislation come and go ALL YEAR long!

  9. Remember the tax return deadlines to avoid unnecessary penalties:

    30th October if submitting a paper return (these will be obsolete soon) and 31st January if submitting electronically!!

  10. For the self-employed, accountancy fees also qualify for ‘tax relief’ making them even better value!!

    This means any fees charged to you for doing your return will come off your net profit for the year and reduce your tax bill; is it STILL really worth doing it yourself??

So, there you have it, top tips free of charge! Of course, there are more but these are what I feel to be the most important.

If you fancy adding to this list, then why not let us know, get in touch!