Need book-keeping advice..can anyone offer help?
tkwad
Posts: 183 Forumite
Hi
I need advice on book-keeping can anyone offer advice or provide a link to somewhere that can help?
The background....my partner knew he was being made redundant at the end of July back in May. He was in a position to take on the work he was doing for employer as a sole trader, and 1 company he knew he could get work from advised him he needed to be registered and have public liability/employee liability insurance to be accepted as an approved contractor. This he was told had to be done end of May to allow processing of his approval and his public liability insurance needed to became valid from June 1st for this purpose. He was however still employed (still is until July 31st) and did not do any work as a sole trader.
He began to do some work as a sole trader from July 1st.
My question....as he is using his normal bank account (as advised on one of Martins blogs) do we take his balance as of July 1st to begin the book-keeping? obviously he has had to pay public liability insurance from June 1st but was not trading until July 1st...
Please I am not looking for criticism or such comments I am genuinely asking for help...its all new to me, the book keeping
I really need help
Many thanks
I need advice on book-keeping can anyone offer advice or provide a link to somewhere that can help?
The background....my partner knew he was being made redundant at the end of July back in May. He was in a position to take on the work he was doing for employer as a sole trader, and 1 company he knew he could get work from advised him he needed to be registered and have public liability/employee liability insurance to be accepted as an approved contractor. This he was told had to be done end of May to allow processing of his approval and his public liability insurance needed to became valid from June 1st for this purpose. He was however still employed (still is until July 31st) and did not do any work as a sole trader.
He began to do some work as a sole trader from July 1st.
My question....as he is using his normal bank account (as advised on one of Martins blogs) do we take his balance as of July 1st to begin the book-keeping? obviously he has had to pay public liability insurance from June 1st but was not trading until July 1st...
Please I am not looking for criticism or such comments I am genuinely asking for help...its all new to me, the book keeping
I really need help
Many thanks
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Comments
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I would use 1st July but record the insurance as "pre trading expenditure" which is allowable for tax purposes.Adventure before Dementia!0
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Thanks Weston dave
Can I ask please, would this be separate in my books? I really am unsure. I don't know how to reconcile bank statements etc, there has been no outlay whatsoever this month (expenditure) relating to work done, just labour costs to be invoiced at the end of this month...only expenditure has been household bills (apart from the public liability DD and the car insurance DD)
Thanks again
I am planning on using a catherdral analysis 4 debit/16 credit book.0 -
Your "books" are stand alone. They should contain all there is to do with the business, whereas your bank statement is just what goes in and out of your bank account. Items in your books will be items which come from your bank statement, cash payments/receipts, etc.
If there are not a lot of transactions to do with your partner's employment/contracting, then it keeping your books in hard-backed notebooks might be the best and simplest way.0 -
If you don't know what you are doing my suggestion would be to print out monthly bank statements and highlight all transactions that are business related. For expenditure items, keep all of the receipts, and if possible number both the receipt and the line on the bank statement.
Start some sort of basic spreadsheet to track invoices sent out and payments received so you don't lose sight of what you are owed.
Are you planning on completing tax returns yourself or going to an accountant? Whilst it seems cheaper to do it yourself, if you don't understand all of your allowances then you may be better off paying someone who knows what they are doing as they may save you more and avoid you potentially getting into any trouble.
I assume he has registered as self-employed with HMRC and started paying Class 2 NICs?
Put away approx 30% of all income (or more if high earner or you want to err on the side of caution) so you'll have funds ready when the first tax bill is due.
I have to ask though, I get the impression the self-employed work is being done for his ex-employer? And he was still an employee during July but has also done some self-employed work in July? You can't be both employed and self employed at the same time with the same client/employer for the same type of work...0 -
It would be 10 times easier to open a separate bank account for the business. Mixing personal and business expenditure can get messy.0
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....I need advice on book-keeping can anyone offer advice or provide a link to somewhere that can help?
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It really depends on how 'complicated' your OH's business affairs become.
Your objective, no doubt, is to be able to pump the right numbers into the right boxes in their SA tax return. There is nothing wrong with having a sheet of paper were you write down all the figures for the amounts of money that they have charged their client during the year, adding that up and saying that's their taxable income. And then taking another sheet of paper and writing down all the figures for the amounts of money that they have paid out and putting them under whatever headings are required by by the SA return, and adding them up.
There are plenty of self-employed people out there who do just that.0 -
I assume he has registered as self-employed with HMRC and started paying Class 2 NICs?
He is still PAYE until 31st July
I have to ask though, I get the impression the self-employed work is being done for his ex-employer? And he was still an employee during July but has also done some self-employed work in July? You can't be both employed and self employed at the same time with the same client/employer for the same type of work
He has begun providing the same service he did for his current employer for those ex clients of his current employer I hope that makes sense
Thanks for your reply it is appreciated0 -
It would be 10 times easier to open a separate bank account for the business. Mixing personal and business expenditure can get messy.
We are going to open a joint account with his redundancy payment and then he will use his account he is currently using purely for business
Thanks for your reply it is very much appreciated0 -
If he started doing self employed work from 1 July then he needs to register as self employed from that date. You can be both PAYE and self employed at the same time.0
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