5 TIPS FOR BEGINNING SELF EMPLOYMENT AS A BLOGGER


When I became self-employed I'd already spent months reading up on what I should and shouldn't be doing. I was shocked at the amount of steps I needed to take and if I'm honest, it was a little overwhelming as if you get it wrong the consequences don't really bare thinking about. It's not easy, the whole weight of your business rests solely on your shoulders and now I'm a little more acquainted with what is what, I thought I'd share my top tips for starting off in self employment. Being self-employed is a challenge, but one thing you shouldn’t have to fear is accounting. Small business accounting for sole traders is relatively straightforward, and should be one of the first things you give your attention to.


Register with HMRC
Letting HMRC know you’re self-employed is a legal requirement, regardless of how many hours you work or whether you turn a profit. You can do it all online, which makes it very easy. You’ll receive unique identifying numbers which you should keep safe as these allow you to log into the HMRC website and submit an online tax return. HMRC also runs free workshops on several aspects of being in business including online filing, self-assessment and how to set up a limited company. In fact, there are many free resources to help you understand your business responsibilities, including running a payroll and VAT. It's incredibly important that you do this as soon as possible, remember every company that pays you will undoubtedly be paying tax and you will appear on their accounts, it only takes a quick glance for you to be seen and HMRC to come digging, it's not worth the trouble for a simple online registration.

Set Up an Accounting System Early On
Once you’re registered, figure out what kind of accounting system would work best for your business model. Try to keep things as simple as possible, especially if you plan on keeping your own books. If you don’t have employees, for instance, there’s little point in investing in expensive software that demands payroll information. At its most basic, accounting is all about balancing what goes out with what comes in, then recording the transactions and cross referencing them to the documentary evidence. These could be invoices or receipts, and you’ll need to keep copies of everything for five years as a self-employed person. There are various ways of setting up a bookkeeping system, which are mostly computer based although you could make entries manually in a notebook or ledger if you want to. Online accounting packages are subscription based, but offer the advantage of bank feeds to help with synchronising your books and your bank balance. It’s important to get this as close to right as possible so you don’t have to make major changes in the future. Small tweaks in your system are fine, but if you need a complete overhaul you may have to duplicate records from months or years ago and it come become a major task. If you’re completely new to bookkeeping or accounting, get some professional advice on how to set up a system that will work best for your business. An accountant or professional bookkeeper would be happy to offer some help.




Save All Your Receipts
Receipts generated through business actions form your evidence that you spent or made what you’re claiming. How you save paper evidence is up to you, but you don’t need to hold onto physical copies in filing cabinets any more. HMRC allows you to scan or photograph receipts (include the back as well as the front) then file the digital copy. Whether you hold them on an external drive, in the cloud, or logged somewhere in an online accounting package, make sure they’re appropriately named so you can find them easily later on.

Budget for Tax
A big tax bill can easily take the shine off a successful year of trading if you’re not anticipating it. Set up a separate bank account where you can squirrel away around 25% of everything you earn so you can easily meet any tax demand. It’s a good idea to do this whether you expect to make a taxable profit or not. At the end of the year, if your bill is less than the full amount you’ve set aside, you can either reinvest it into the business or grant yourself a bonus. Don’t forget that your tax bill for the current year will include a payment on account towards your tax bill for the following year. This can make first bills higher than expected, so it really is important to set a portion of your income aside to cover it.


Claim Your Expenses
You can claim for all the costs of running your business, providing the cost was purely for business purposes. If you work from home, you can claim a portion of heating, internet, rent or phone costs. You can also claim a mileage allowance if you use your car for business, or claim allowances for stationery or postage costs. An accountant can help you figure out which expenses you’re entitled to claim, and make sure you’re not paying too much tax. When you’re newly self-employed there are hundreds of different things fighting for your attention. Figuring out a simple bookkeeping and accounting system from the beginning helps you take care of basics and still have time for other business activities.

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6 comments

  1. Such useful tips! Self employment is such a minefield! xx

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  2. These are great tips! It's hard to know where to start and what you're supposed to do when you first register as self employed! x

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  3. Such great tips! It's so hard to know where to start but when you do, its actually not that difficult!

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  4. Ah these are fabulous tips lovely. I have just gone self employed this year.

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  5. This is a REALLY useful guide - it's so important to be organised from the start. I really need to give my blog finances an overhaul...

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  6. These are great tips Emily! It's so important to be organised and if you start off on the right foot from the get go, your laughing :) xx

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