You’ve begun this journey with lots of hope, a bright optimism and the savings worth of years. After spending long enough time by being told what to do and how to do by others, you finally are your own boss! But where to start to get small business tips?
Yet setting up your own business is not an easy task, given the competition is intense with a number of roughly 170,000 small businesses incorporated between May and July in 2019, markets are full with ambitious entrepreneurs like yourself. Before you fly, you must learn to walk. Regardless if you work from home or about to set up a limited company, follow the small business tips if you are planning to be the boss of your own dreams;
Open a separate business bank account
It is imperative that you open a business account and carry out your business-related transactions through it. In doing so, you’ll be seen consistent with your credit record and been organised with your expenses and incomes. Remember every single transaction will be shown on your prospective trial balance. (Yes that spreadsheet) In other words, do not use your business bank account for your PERSONAL EXPENSES. Buy your round with your personal card, leave the professional expenses to your business account.
Invoices, Expenses, and Bills
Do you work from home? Why not show your living room as the main location where you carry out your daily operations rather than your bedroom. Do you commute to see your clients? Travel cards are great indicators of your investments in your business. Do you own a personal vehicle? Maintain a proper record of miles traveled to claim mileage expenses. Posting your clients? Keep the receipts! Remember both invoices and purchasing proofs MUST be made out for your name or your business name. Include as many proofs of business-related spending as possible. You’ll thank yourself while filing your tax return.
Register for VAT if you anticipate an annual income over £85,000
Ideally, we recommend you to register for VAT if your turnover is about to hit £85,000. The trick is to adjust your business into the digital vat return scheme called MTD for VAT. You should choose your VAT scheme wisely, depending on the nature of the business. It is advisable that you should consult with an accountant before setting up a VAT registration.
Ensure bookkeeping in a timely manner
Regardless of whether you use a bookkeeping app or not, you can still feed the system with your accountant’s information. Despite the daunting concept of “bookkeeping”, it’s not the most challenging sequence of financial secretarial works. Yet it’s best to cooperate with an accountant when things get complicated. It is critical that you should do your bookkeeping meticulously to avoid any error and/or omission for future references.
Deadlines, deadlines, deadlines
It may be the most crucial object throughout your journey as a business owner. Accounts filing and the tax return is an uncharted rainforest of deadlines. As comprehensive as it sounds, missing deadlines almost always causes heavy penalties. We strongly recommend you to talk to an accountant about your filing deadlines, if nothing, this is the part that will highly likely hassle you the most.
Get the Low-down on taxes
You are to be liable to pay income tax on all your taxable income. With that in mind, it is important to know that the golden rule to reduce your tax bill is to increase your business expense. Do the simple math, the more you decrease your net income the less tax you’ll pay.
Keep the codes and important numbers
Last but not least, you can anticipate a number of letters both from HMRC and Companies House when you start your own business. Do not destroy them! They’ll send your authentication code, unique tax reference number, VAT Scheme, your filing reminders, and so on. You can always order new ones but anticipate at least two weeks for each to arrive at your registered address. We say it’s better safe than being sorry especially when the deadline for your tax return is looming on the horizon.
