You took a chance and made a decision to have your own business and do what you're really passionate about.
The least thing you'd like to do is to be sitting at the desk for hours and filling out appropriate paperwork (unless your business is accounting, of course). And although I cannot tell you how to do it at all, I have some advice on how to make your accounting flow more organised.
They say anything you can stick to for three weeks will become a habit. So, the steps below can help you to develop a habit of keeping your books organised.
1. Register for VAT
It could be a good idea to register for VAT.
You only need to register if you expect to make over £79,000 within 12 months (or if you have already reached that in takings).
However, there are some advantages in voluntary VAT registration. First, you can possibly get some of the VAT back on the goods that you have purchased to start your business with. And second, if you're buying goods that are VAT-rated and you sell them with a zero-VAT rate, you can get your VAT spend returned.
Potentially, this means more money for you and your business.
2. Remember your reports & taxes
As a self-employed, you have to submit certain forms every year to HMRC. The type of forms you have to submit depends on what kind of business you keep.
- Self Assessment tax return every year. Do it online to save the time and paper
- Pay Income Tax
- Pay National insurance
- Company Tax return every year. You can also do it online
- Prepare statutory accounts
- As a Director of a limited company you must also do your own Self Assesment tax report and pay National Insurance and Tax through your company's PAYE system
- Choose a nominated partner to send in partnership Self Assessment Tax return.
- Each partner has to submit his own Self Assesment Tax return and pay National Insurance and Income Tax on their share.
3. Remember the dates
Set up the reminders for the deadlines of the reports you have to submit. Even better - set them up a week early to give you some time to clear up any details.
Here are some of the most important dates to keep in mind:
Self-Assesment Tax Returns
Midnight 31 January 2014 (online) or before midnight 31 October 2013 (paper)
Final payment on any tax due
Midnight 31 January 2014
Corporation tax payment
Nine months and one day from the end of your accounting period
Annual report to Companies House
Is individual to every company, but you can use a handy Companies House reminder service for free.
4. Keep your records in the cloud
Start keeping records from day one and it's going to become a habit. And if you store them all in one place it's only going to make it easier to search for them whenever you need to.
By law, you are required to store your records for another five years from the tax return deadline of 31st January. HMRC might request copies of your invoices, receipts or expenses to check if the returns were carried out correctly.
You can record all of these in Debitoor shall HMRC ever request them from you. Sign up for Debitoor today to keep track of your financial records.