You've had an idea - great, you've done your research and have seen a gap in the market and now what?
Once you've decided to take the plunge you then need to decide if you are going to be a limited company or a sole trader. This article talks about going down the sole trader route.
Register with HMRC.
There are 3 criteria for registering with HMRC these are:
You've earned more then £1000 in a tax year.
You need to prove that you are self-employed to claim tax free childcare
Or you want to make voluntary class 2 National Insurance payments to help you qualify for certain benefits.
If you meet one of these you will need to register as self-employed with HMRC. You with then receive a unique tax reference in the post, this will enable you to complete the yearly self-assessment.
Once you have this in place, you can then look at the paperwork side of your business.
It's vital to keep correct records and get the proper insurance in place. Most traders have public liability and professional indemnity insurance, this will allow you a good level of cover. Research to see what insurance you need.
Set up a separate bank account, so many sole traders use their personal bank account, it's best to have a separate one for all of your business transactions, it makes things a lot clearer in the long run.
Look at bookkeeping software, there are so many choices from free software to pay per month subscription based software. A simple google search will bring up lots of options. Keep an aye on your monthly sales and when you near the VAT threshold start thinking about when your business will need to register for VAT.
Keep your paperwork, these days there are so many digital options there's no need to keep paper copies anymore, but if you like a folder full of invoices go for it - choose a method that works for you.
If you worry that you don't quite know how to properly do your bookkeeping - seek outsourced help, companies like us, Tidal Bookkeeping Cornwall provide, weekly or monthly services to ensure that your financial records are kept up to date correctly. This can save sleepless nights when the deadline is looming for self-assessment. Fancy a chat to see how we can help? call 07928 676307 or email: info@tidalbookkeepingcornwall.co.uk.
This is intended as a general guide and is not intended to represent specific advice - no liability is accepted for the opinions it contains or for errors or omissions.