Categorized | contractor faqs

The Government’s Guide to Becoming Self-Employed

Not all contractors choose the limited company route as a payment structure. There are, or can be, good reasons why you’d choose the umbrella or sole trader route, instead. If choosing the latter, it’s possible you’ll forego an accountant, too.

Whichever structure you decide is right for you, setting up shop on your own can be daunting. It’s not like you have a line manager or head of department to make a decision when you get stuck. The buck stops with you.

It doesn’t deter thousands of self-employed people from tackling their own accounts, tax, NICs, etc. But there are times when it can all get a bit much.

So to whom do you turn when you don’t have a specialist accountant to fall back on?

Knowing your trade isn’t the same as knowing your business

It’s taken as read that you know the industry upon which you’re launching your business. Otherwise, how are you going to compete with others who are more experienced?

This is especially true today in a world where gaining trust online is so important. You must at least grasp the concept of what the market expects of you and your business.

But what about the other stuff that goes into running a business? Self-Assessment, trading in a global capacity online, the acumen you need to succeed that the school curriculum conveniently sidesteps? It’s all here.

Just because you’re amazing at the skill you provide doesn’t make you Sir Alan Sugar. So, what happens when your in-tray’s full of business-type paperwork that you haven’t got a clue what to do with?

Enter the taxman (of all people!)

Yep – you read that right. HMRC has just updated its guidelines on what it takes to be a successful small business in the UK, today.

The latest updates are aimed at sole traders and partnerships, not limited company directors. Most contractors who form limited companies often make appointing an accountant their first task, anyway. So it makes sense to offer these courses to those who wouldn’t already have someone looking after their books.

Moreover, the taxman is inviting you to learn what it takes to keep your head above water for free! There’s a number of ways you can take advantage of the updated offering.

Email learning

With the HMRC “Business Help and Education” email service, you can choose what you want to study.

The courses range from generic topics, like “Being Self-Employed”, to specifics. If you want to learn how to trade online or about being a director, there’s a course for that.

You choose your topic, fill in the online form and off you go.

E-learning

The Government’s e-learning course covers many of the aspects a contractor accountant would often take care of.

There’s tax and self-assessment, as well as where you stand with National Insurance. To compliment those, there’s instruction on keeping records and expenses, too.

Getting into the habit of keeping track of your transactions is vital. When it comes to self-assessment, you don’t want to have to start wading through a year’s worth of receipts you keep in a shoebox.

The courses uses case studies and input from others who’ve been in business for themselves to get its message across. And there’s no rush. You can take as long as you like to digest the information. But, the faster you learn, the quicker you can start adopting what you learn into your day-to-day business.

Webinars

In addition to the static content, there’s also a choice of webinars and video to help you get started. Across May 2015 alone, there are six dates to choose from at varying times of day.

If you can’t make those dates, there’s a 20-minute video on YouTube covering the basics of self-employment.

Understanding the basics is important, whatever your payment structure. Yes, it’s unlikely that HMRC’s advice will avail you of all the tax breaks on offer. But if you’d rather tackle your own accounts while remaining compliant, this is the resource for you.

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