Clearview National May 2019 - Issue 210 | Page 100

BUSINESSNEWS
Back to Business Basics
Starting a business is not terribly hard but neither is it really
straight-forward. Benjamin Dyer of Powered Now looks at
the main issues you need to think about when you go solo…
» » IN THIS SHORT ARTICLE I TRY TO
cover the things you must think about to start
a successful business. The danger is that you
won’t be around for long unless you have all of
them ticked.
THE LEGAL THINGS NEEDED
The good news is that as a new business it
is unlikely you will need to register for and
charge VAT. Nor is it likely you will want
or need to ‘incorporate’ as a limited liability
company. This makes things easier.
The things you do need to think about are
registering as self-employed, keeping accurate
records and filling out a tax return once a year.
Then there’s any health and safety legislation
applying to the particular trade you will be
working in.
You must register as self-employed by the
5th of October following the end of the tax
year (5th April) in which you started your
business. Your first tax return and tax payment
will be due by the following 31st January and
you must submit this online. For example, if
you start your business on 7th January 2019,
you must register as self employed by 5th
October 2019. Then you submit your tax
return electronically and pay your tax by 31st
January 2020. Searching the HMRC web site
will turn up more detailed instructions.
You will pay income tax on the difference
between your sales and costs, but more than
the first £10k tax is free. You may also need
to repay part of your student loan as well as
Class 2 and Class 4 National Insurance. In
later years, HMRC may require an advance
payment for the following year’s tax bill. You
must always put money aside for your tax bill
all through the year.
If you hire anybody as an employee, there
are quite a few additional rules to follow.
You need to record all of your sales on
invoices. My suggestion is that you base the
layout of your invoices on ones that you
receive from other businesses, ignoring VAT.
You should keep a record of all of the costs
that are associated with your business and
that includes your receipts and invoices for all
charges. This is not just for the obvious things
100 » MAY 2019 » CL EARVI E W- UK . C O M
like materials, tools, van costs and petrol for
travelling to jobs. You can also usually claim
for a share of the costs of running your house.
That is if you use it sometimes for doing
paperwork, storing materials etc.
Although there will be some fees, it’s worth
getting an accountant who will advise you
exactly what you can claim for. This will help
you to legally minimise your tax.
THE TRADE-RELATED
THINGS NEEDED
Whatever trade you specialise in, you need
to be good at it and not too slow. Going solo
because you have been fired for incompetence
is the ticket to a life of pain. Don’t go there.
It’s also important to have the right tools.
Scrimping here tends to be a false economy.
THE BUSINESS-RELATED
THINGS NEEDED
To run a successful business, you need to
have a good business head. That primarily
means being able to win business at the right
price. It means not discounting or charging
too little. This takes discipline. You have
to cover tax and national insurance, your
holidays, any sickness, the cost of tools, your
accountant and more. The biggest reason for
new businesses failing is charging too little.
The first way you will win business is by
word of mouth. That’s why doing a good job
is so important. This may be enough if you
always intend to be a sole trader. If you want
to grow you will also need to market your
business.
Finally, when the work is done you need
to get your invoice out quickly. Then chase
it in a timely manner if there is any delay in
payment.
AT THE END OF THE DAY
Starting your own business can be a
liberating experience. It can also be fun. At the
same time, there are headaches and you only
“eat what you kill” which can be terrifying.
Good luck!
www.powerednow.com