What to consider if going self-employed
Whether you are considering to be self-employed or setting up a limited company, here are a few things to consider to ensure you are above board.
Business Bank Account
As tempting as it may be to use your existing personal current account, setting up a business account ensures you keep your finances separate to personal transactions. This helps when you do your self-assessment or file your corporation tax (if you have a limited company) at the end of the year. To boot, it is actually not that difficult and doesn't need to cost the earth.
The best advice I received about business bank accounts, was to apply for one with the bank you hold your current account with. Because you are a long-standing customer you should pass the checks more quickly. Although I had no problems setting up an online banking account within 5 minutes, I timed it.
Most high-street banks offer new business free banking for the first 12 to 18 months, which helps keep initial setup costs low. Useful when you are setting up your new business. Read the following This Money article for a comparison of the typical High-street bank business accounts.
There are alternatives such as Digital banks such as Tide and Starling.
Starling is attractive as it free as long as your annual turnover that does not exceed £1.7 million and you employ fewer than 10 people.
Be aware that although Tide charges 20p when sending to or receiving from non-Tide accounts.
Another thing to bear in mind is that if you use an accountancy package such as Xero, direct API connection is not available as yet and you would have to download a csv statement from your mobile app and upload to Xero, unlike with High-street banks, you can connect your business account for a seamless connection.
If you are likely to work at your client's office it is worth getting public liability and professional indemnity helps cover mishaps that may happen, as after all, we are human. I use Dinghy Insurance as I can choose the level of my cover and cover the days that I am working! So this could be useful if you are in-between clients or when you go on holiday!
The price is competitive however I've forgotten to change my status to "on holiday" a few times now as I forget to scroll down the screen on the desktop to Insurance details. Another admin task to do before you logoff for the holidays!
There are various packages such as Xero and Quick books which help manage invoices, expenses, PAYE and even issue quotes. You can either get them through your Accountant or you can subscribe yourself. There a various packages to suit your business needs.
You can subscribe to a company address with a monthly fee so that you don't have to put your home address on the internet. You can register your company with lots of companies such as Intelligent PA for as little as £15 a month.
Hope you have found the above useful. There's so many options out there it is best to pick what is best for you! Message me for more tips when starting out.