Self employed accounts and records

pipscot

GlynD wrote: »

I believe accountancy to be totally necessary. Wait til OP is on the threshold of 40% tax - then he'll be ultra-keen. Unless they've changed it that's only 32k.

At 40% tax, an accountant might be useful to help maximise your allowances and help you decide on issues such as whether to go limited. But people do seem to forget that if you make an extra £1K profit then even at 40% tax, you are still keeping £600 for yourself!

GlynD

pipscot wrote: »

At 40% tax, an accountant might be useful to help maximise your allowances and help you decide on issues such as whether to go limited. But people do seem to forget that if you make an extra £1K profit then even at 40% tax, you are still keeping £600 for yourself!

How will OP know how much to offset for the future in tax returns?

cottager

We've always had an accountant for OH's business and wouldn't be without them (not least when we had a random tax investigation a few years ago), but there's a good deal more to "pull together" than it sounds would be the case with your business, which seems much more straightforward. As you're comfortable with spreadsheets, and you're talking of only a handful of customers and monthly invoices, and relatively few straightforward outgoing expenses, that seems fine so long as you're diligent about keeping good and proper records so there's a clear "audit trail" if needed.

It's different for us as we deal with a number of suppliers in order to do what we do, and we're VAT-registered, so it would be quite a job (for us and the accountant) to keep on top of everything without accounts software. But thinking back to when OH started out (before the computer age!), a simple double-entry cash book recording everything sufficed for many years... the spreadsheet can be your equivalent today.

The only point I'd make about being self-employed (sole trader) is that you the individual and you the business will be one and the same for tax purposes, so all your personal financial records will have to be kept equally well, kept for longer than a private individual needs to do, and any savings interest etc all included in your self-assessment return.

BTW, If you were to ever consider using Sage as your business takes off and maybe things become a little less easy to handle simply (the need to register for VAT in the future or whatever it may be), Line 50 is way over the top IMHO. The more modest Instant Accounts package would be quite sufficient (it is for us), but even that isn't cheap and nor is the SageCover annual fee if you wanted to be able to take advantage of their helpdesk, online help, updates etc. Of course there are plenty of other packages out there as some have mentioned, but personally I've only ever used Sage so have no experience of anything else.