Like many people over the course of the Coronavirus pandemic, businesses have found it increasingly hard to survive through an unprecedented period of challenge with job losses being inevitable and many exploring becoming self-employed.
Those experiencing the furlough period have had a lot of time to reflect on their aspirations, survival and the requirement of comfortable work/life balance. 2020 has seen a surge in people taking the plunge into the world of self-employment by starting up their own business.
As of the end of 2019 the number of self-employed individuals within the United Kingdom stood at around 5 million people with the most common form of self-employment being working for themselves.
Although an initially daunting prospect, setting up your own business leads to a very rewarding experience.
Many people fantasize about being their own boss and choosing the amount of work and when to do it, enabling a more flexible control over your work-life balance. Providing a service directly also enables the ability to earn more which is an extra attraction, however, it is a full-on work commitment with areas you may not have accounted for.
Customers expectations will need to be met in order to successfully maintain a growing business model and make your self-employment financially viable. Proper preparation is required to be able to estimate whether you have the financial investment to be able to successfully set up your business.
You need to fully identify where you plan to carry out the work, be it a personal space or an office environment and the costs of fitting out that space with the equipment needed to effectively launch your new career. You will need to focus on how to attract new clients and how to manage financially without a regular income at first. Remember, when starting out self-employed you will not be privy to such things as holiday entitlement and pension contributions.
Among the chief items, you have to face within your new business venture is admin and if you are adequately prepared to handle that side of the business with bookkeeping services, cash flow and tax returns.
Registration as a Limited Company
If you consider taking the role of a limited business you will first and foremost need to register yourself with Companies House. From here you will be responsible for paying corporation tax.
Whether you set up as a limited business or sole trader, you will need to inform HMRC that you are self-employed so that they know you need to pay tax through self-assessment pay class 2 and 4 National Insurance contributions. You will also be required to open up a separate business bank account to keep personal and business expenses separate.
Find a suitable chartered accountant to prepare your annual accounts and tax returns. This is not a legal requirement but it is a considerable help. Although it can come across as a very complicated chain of events to establish yourself as self-employed, with the right planning and research you can build a steady workflow and call your own timeframe which is a major benefit.
Additionally, you can hire a bookkeeper manchester to completely handle your admin and financials to help guide and advise you through your business journey. To get the help you need and keep on top of your early financials moving forward, talk with Pebbles today for all your bookkeeping services in Manchester and bookkeeping in South Manchester.