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Let’s face it, it’s not pleasant paying tax, but it’s the law. There is lots of online help for people running small businesses.
The first thing to do when you start a business as a self employed sole trader is to register as such with the inland revenue. Your local tax office can help you with that and it is just a matter of filling in a form. If you delay you may face a fine.
Once you start trading, keep all of your receipts and accurate accounts of your earnings. If ever you are investigated you will need to be able to back up your figures with some kind of paperwork showing how you arrived at the figures you declared.
It may also be a good idea to employ a good accountant. A good accountant will save you money by helping you to take advantage of government allowances for various things that you may not have been aware of. eg. allowances on sale of goodwill when you sell a window cleaning round, etc.
Be careful if you work with someone and pay them cash in hand under the arrangement that they are also self employed. Employment status is a tricky business and if after investigation the tax man decides that really the worker is in effect an employee, you could face paying the tax and employers contributions that have been avoided.
If the worker is a bona fide subcontractor then they should be registered with the inland revenue, and give you an invoice for the work they carry out. In determining whether or not they are or they are not an employee, read through the notes on Employment stautus above. Ask yourself for example; Do they provide their own tools and equipment? Do they have other work of their own? What measure of control do I have over them when it comes to how and when the jobs are done? |
