Starting your own self-employed business is an incredibly exciting time. Whilst you may be full of ideas and buzzing with anticipation for what the future holds, there are a few important things, and possibly legal, that you need to explore and implement. These include whether you need to register for self-assessment for tax purposes, if you need business insurance in Liverpool or the rest of the UK and whether you need a separate business bank account. Read on for some more information on these three topics.
I recently wrote a blog post titled 6 handy tax tips for bloggers, but it’s also relevant for small business or home business starts ups. There’s lots of useful information there about record keeping and how to register for self-assessment with HMRC, or even if you need to at all. If you are a sole trader and your gross sales from your trades/services are no more than £1000 per tax year, then you do not legally have to register with HMRC or need to fill out a tax return. It’s called a trading allowance and everyone is entitled to one self-employment trading allowance of £1000. You can read the official information about this allowance to see if you need to register by clicking here: https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
There are still some reasons you might want to register, even if your gross self-employment income is under £1000, to entitle you to certain benefits. Or if your gross income will be over £1000 then you need to register. It’s very easy to find all the information you need and to register online at the HMRC website. You could even hire an accountant to take care of your accounts and complete your tax returns for you.
Depending on the type of business you plan to undertake, you may need business insurance, otherwise known as commercial insurance. Many companies offer bespoke business insurance to cover your trade and many even offer home-based business insurance. If you are selling products then you may wish to consider product liability to cover you for faulty products or issues arising from any products you sell. If you see customers in person or go to trade shows or fairs, then you may need public liability to cover any accidents on your property as an example. There are lots of reasons why your business may need insurance to ensure you are covered for injury to customers or damage to their property, for example.
Business insurance can also cover your equipment from damage and theft, such as laptops and cameras, tools and even stock and business cash. It’s definitely worth considering so you’re not out of pocket should the worst happen. There are lots of companies that can offer advice about insurance and let you know whether you need it. If you require commercial insurance in Liverpool and the North West then consider contacting Rigby Financial for advice and a quote.
Business bank account
You may also need to open a business bank account for your start up. If you are a sole trader then you are under no obligation to open an official business bank account and it could even be an additional expense that is not needed. Many business accounts have tempting offers of no fees for the first year, but then charge a fee after this. It’s fine to use a personal bank account for sole trader transactions – just make sure you highlight which is for business use or even better, open a separate personal bank account for your sole trader transactions.
If you are a limited company, however, then you do need to open a business bank account to keep its finances separate. You cannot open a personal bank account in your business name - your business is a separate entity to yourself. If you’re looking to borrow money or have a company credit card, then you’ll need a business bank account to apply for these.
The above are three things you need to consider when starting your own self-employed business.
With rental and property prices changing constantly; it can be difficult to find the right place to run your business, especially if you’re already a busy mum. Due to uncertain times, many people are choosing to save themselves the cost of renting, or paying another mortgage, and running their businesses from home, whether it’s their full-time job, or an exciting side hustle.
By keeping your company within your property, you’ll save commuting costs, and won’t have to pay additional bills on a space that doesn’t belong to you. There are even some bills you can class as a business expense when you work from home. I’ve been self-employed for six years this month and currently have an office at the end of the children’s playroom. Ben has just set up a home business and has a workshop at the bottom of the garden!
There are, however, some things you should consider before taking the plunge, and turning the place where you live, into an office, workshop, or studio.
My walking desk/office set up at the end of the children's playroom!
All you need
You’ll need to scope out your house, garden, or land (you lucky thing), for the suitability of running your company, and it will depend on what your business is. Office-based work is probably the most straightforward, as a room or area within your home can easily be converted into an office space, using a desk and appropriate shelving. To separate your home life from your work; you might want to consider setting up your business in the garden by using, or building, a dedicated room to work inside. By keeping your work removed from family life; you’ll be able to concentrate professionally at the job in hand, throughout your time “at work”.
This is definitely something that would be great for me as currently my office is a third of the playroom! I thought it was a great idea at first so I could be near the children when they are playing, but it’s actually impossible most of the time to get work completed if they are here as they can see me and want my attention. A separate area, if you have the space, is definitely recommended.
For companies that manufacture goods; you’ll need to think about the scale of your operation and how much you’ll be producing. Any machinery will have to have ample room to be used correctly, and you’ll need adequate storage for your items. It’s worth investing in all the tools needed, both physical and digital, so that you’ll have all you need from the get-go.
Even if you’re a maker, like Ben my husband is, the importance of organised admin and digital marketing cannot be undervalued. Yes, he needs a workshop to make, but he still needs a space and tools to be able to promote his wares digitally as this is how he can get a sale in this day and age. And, of course, there is admin to deal with, whether that is emails, uploading listings or documenting income and expenditure. He still needs a space to be able to work digitally too. Make sure you scope out the best template management or social media platform system to make things easier for running your business; find what suits you and your business so that you can begin to thrive.
Separation is key
When you run your own business, it can often consume every part of your life, especially when you’re working on it from your home. There is always something to be doing with regards to your business, new ideas popping into your head constantly, emails to respond to and work to be getting on with. The problem is you work at home and you could therefore always be working and thinking of work!
Therefore, it’s crucial that you’re able to switch off and enjoy your family life after the working day is finished. Having a separate space to work on your property is the best way to switch off, as you can lock up and leave everything in there, away from the house. If you have a work environment inside the home; try to remove as much as possible from the rest of family life, by locking doors and turning off any phones and computers.
If, like me, your work space really is in the middle of family life (who thought a playroom-office was a good idea again?!), then you need to try to set clear boundaries between work and life. I admit, I still struggle to do this on busy days, especially as I like to stay on top of my work and get things done promptly, but I do try to have working hours that I stick to. I usually work when the kids are at school and then again when they are in bed. I also take weekends off, most of the time. When I work every day I feel all consumed by my business and don’t give my children the quality time they need, so by taking the weekends of I can at least give them my full attention for two days of the week without my head stuck in a laptop.
It can definitely be a struggle to take time off when you’re setting up a business and it demands all your attention and time, but it’s best to set some clear rules about when work time is and when your own life time is!
A quiet space
You’ll also want to be able to drown out (most) of the noise when you’re working on something important or during unusual hours, such as when the kids and husband are home. This factor will again stress the importance of separation, so make sure it’s a focus when you’re designing the space. If I do have to work when my children are home then it’s quite impossible if they are being noisy and I need to concentrate, especially as they are usually in the same room as me. A separate room where I can shut the door would be ideal – so do consider this if you are setting up your own workspace.
Ben’s workspace is great as it is at the bottom of the garden, away from our home and noisy family life. I’m sure he can much better separate work and life compared to my setup. Of course, mine is lovely and peaceful in the day when the children are at school and nursery, and Ben is at work!
Get ready for a blog post stuffed full of resources to help you make money online, from smart phone apps and from home!
Welcome to my monthly income report where I share how much money I have managed to make from home. This income is from freelance blog writing, various side hustles online, apps for mystery shopping, website testing, matched betting, online selling and I also include any cashback earned. To read an in-depth reason behind sharing my income reports start with the blog post why I publish income reports and click here to discover the top 3 ways I made money from home in 2017.
Here goes, from smallest to largest...
My November 2018 blogger and online earnings income breakdown
Please note - the below are my totals before any deductions, so my total turnover for the month, not including any expenses. My yearly business expenses last year were about £4000 and so far they look the same this year too. I also save £500 per month to cover my tax, national insurance, student loan and pension. So my total monthly business expenses and tax, etc savings are around £830. So deduct this from the overall figure at the end of this blog post for an idea of my take-home pay.
From smallest to largest:
Shopmium cashback £2.50
This is a new entry in my income reports as I have only just signed up to this app. I'm a bit late to the party I know! It's a fab cashback app with offers on lots of branded items in the main UK supermarkets.
Curve is an app and also a Mastercard debit card with which you can use any of your bank cards or credit cards to pay for a purchase, but you only have to carry around the Curve card. You use the app to control which card you pay with. You also get 1% cashback for the first three months on three retailers from their selection (including supermarkets), so it’s worth paying for everything in your 3 chosen stores for at least three months using the Curve card to take advantage of this. It costs you nothing as Curve is just like a third party, so you still pay for the purchases using your own bank card at no cost to you.
It costs nothing to sign up to their free service and you’ll get £5 for free for using my code and the 1% cash back for three months at no extra cost to you. It’s basically free money! Plus, you'll get your own referral code so if you sign all your friends and family up then you'll get £5 for each referral too (and they get £5 too!).
Top Cashback £8.73
We’ve now had over £800 from Top Cashback, as a household, since signing up in April 2016. You’re crazy if you’re not doing it. It's money back on things you were going to buy anyway. Learn how to earn cashback on things you already buy and be amazed with how much extra cash you have back in your pocket!
Another new entry on my income reports from Shoppix! This is a smart phone app that gives you tokens in exchange for receipts and when you reach a threshold you can exchange these tokens for cash or vouchers! I cashed out £10 to my PayPal.
If you enter 52YFMN8U when you download the Shoppix app, we can both get 200 tokens when you snap a valid receipt and complete the profile survey!
This is the total sales from my online scarf boutique where I sell a few printed scarves. There are a few left with 20% off currently and they make great Christmas gifts!
Matched betting £36.96
My quietest matched betting month ever, but I am now restricted from the offers for most of the good bookies! My strategy was just to ride out making money from this for as long as possible and it is coming to an end after almost two years. Some people only do the sign up offers which took me around six weeks to complete and I made £1500 from just those offers. Some people use various strategies to pretend to be a real customer and do it long-term, some even claim to make a full-time living! My plan was to do the sign up offers and continue doing the reload offers for as long as possible, until all the bookies realised what I was doing and gubbed me! It's been a great ride as I have made over £5000 profit since starting in January 2017!
I highly recommend matched betting as it's made me £5000 in just under two years which is tax-free cash. At first it was very time-consuming, but once I got the hang of it I could make around £50 per hour with the little time I spent doing it. As a side-hustle it is a brilliant and fun way to make extra money from home. There's no need to do every offer and you can take your time working through the sign up offers.
I recommend using Profit Accumulator for matched betting as a beginner. They have so many guides and walk you through the process in the first few offers. If you get stuck you can ask a question in the forum and someone will get back to you. They also have a 30 day money back guarantee on their memberships, plus you can try the first couple of offers without even signing up to anything to see that it really does work and is so simple once you get the hang of the free bet offers!
I've been consistently making around £100 per month by selling our outgrown and unwanted items on eBay and sometimes on Facebook Marketplace. It keeps our home clutter free and provides us with a bit of extra pocket money each month. If items don't sell after a while, then I donate them to the charity shops.
This is always my most lucrative method of income from home each month. I love to write and thoroughly enjoy writing about topics that I am passionate about, sharing my experience, or researching topics I enjoy to learn more and then share it on my blog in a relatable way.
It’s coming up to that time of year again… no, not Christmas, but the other time of year that all self-employed people start freaking out about… tax return time! OK, not everyone freaks out as some of us do our tax returns as soon as we can, like in April! I’ve always wondered why people put it off until the very last minute.
The only thing I’m freaking out about is remembering to pay my bill! I have several alarms at the ready near the end of January. I have the money sat waiting to pay it and just need to log in to make my payment. I did actually pay it right away, but it just sat there in my tax account doing nothing, so I thought it better to earn interest on it until the due date if they’re not going to actually deduct it from my tax bill until 31st January. I had it refunded and it’s been sat patiently waiting until the end of Jan whilst nicely earning a bit of interest (which of course I will declare on my next tax bill!)
Many bloggers find the whole tax thing really scary and intimidating. I’m here to tell you it’s not at all. I am by no means an expert, but I want to share with you a few tips and some handy links to get you started. I should probably mention at this stage I do love spreadsheets and form filling doesn’t faze me, so maybe that’s why I find it OK. I get not everyone is like this though, but hopefully you won’t find it scary and if you do then seek professional advice.
Things to note – I am not an expert, so please do your own research. I’ll share some links here. Also, tax rules change all the time and I am writing this in November 2018 so do check the links and investigate for yourself as allowances and rules can change each new tax year.
Keep records of everything
Firstly, if you are planning on running your blog as a business then you need to keep records of everything. Even if you are only going to make £10 from your blog this year, that’s a profit and an income and it makes your blog a business. You might not have to register for self-assessment with such a small income from your blog (see next point), but you still need to keep records. There’s a chance your blog will make enough over the next few months to have to register as self-employed, so it’s best to keep on top of record keeping.
Keep all invoices, receipts, bank statements and email correspondence with customers. I keep a spreadsheet with all my incomings and outgoings which I update every day as and when I have an incoming or expense. I then cross reference this with my bank account and PayPal every week and ensure the balances match up. I have a separate spreadsheet for each tax year. I rarely have paper receipts, but when I do I keep these in an envelope for each tax year. Many of my invoices and receipts are electronic so I keep them in my email account all sorted into ‘incomings’ and ‘outgoings’ for each tax year. I can easily print everything and find records of everything for each tax year.
You really need to come up with an organised system to keep records of everything and stay on top of it so it doesn’t overwhelm you.
The HMRC website says “examples of the records you may need to keep are:
copies of your invoices, paper or electronic
a spreadsheet of your income receipts
emails confirming income received
statements from the company who paid you which show the amount you received
bank deposit pay-in records
a diary or appointments book showing your income from each customer
HMRC can charge you a penalty if the records you keep aren’t accurate, complete and readable or if you don’t retain them for the required period of time.”
I must admit, I love spreadsheets. I love adding formulas that work out all my tax payments and national insurance contributions and automatically update as I add new figures every day. Some people loathe spreadsheets though or they simply don’t get them and get into a muddle. Just because I use a spreadsheet, it doesn’t mean you have to, but you have to have some way of recording every incoming and outgoing each month. If you’re making enough money or as your blogging business grows then you may wish to consider hiring an accountant to manage your tax returns or using some digital software to make everything easier. I’ve heard many bloggers talk about using Quickbooks before to make accounting and invoicing simplified and of course, digital. Digital tax accounting company Tax Kings also offer digital bookkeeping services for sole traders including ‘preparing, recording and completing your annual return’.
If your gross income is £1000 or less, you don’t have to register with HMRC
If your gross trading income from one or more self-employment trades is £1000 or less then you don’t have to tell HMRC or register as self-employed. That means your total income before any expenses. It’s known as a trading allowance. If you don’t make much money from blogging (under £1000) and you have no other trades then it can save the hassle of doing a self-assessment.
However, there are some reasons why you may wish to complete a self-assessment, even if you earn under £1000 from blogging and any other trades. These include if you’ll want to claim Maternity Allowance based on your self-employed income, if you want to claim Tax Free Childcare based on your self-employed income and if you want to voluntarily pay Class 2 National Insurance contributions to help towards some benefits.
You can find out more information here: https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
Register for self-assessment if your income is over £1000
If your gross (before expenses) income from blogging and any other trades is over £1000 then you’ll have to register for self-assessment with HMRC. Even if your income from blogging is under £1000 then are some circumstances mentioned above where it could benefit you to register anyway.
You can register for self-assessment here: https://www.gov.uk/log-in-file-self-assessment-tax-return
Use ‘simplified expenses’ to claim for utilities
If you work from home then a proportion of the energy bills will be during the hours you are working. Instead of trying to break down exactly how much gas, electric and water you used during working hours to claim as an expense, you simply use the ‘simplified expenses’ flat rate which tells you exactly how much you can claim as an expense each month:
I work anywhere from 30-50 hours per week on my at-home business so I can add £26 per month as an expense towards our utility bills.
Note – this doesn’t include telephone or internet bills, so these need to be worked out and claimed as a separate expense.
Save as you go
This is probably one of the most important things to do! Save your tax as you go! As mentioned, on my spreadsheet I have formulas that are linked to my profits each tax year that work out my total costs for the following:
Tax (20% of income over my £11850 personal allowance)
Class 2 NIC (set amount £153.40)
Class 4 NIC (9% of profits between £8424 and £46350)
Student Loan Plan 1 (9% of income over my £18330 personal allowance)
So by the end of the tax year I already know exactly how much I owe thanks to my spreadsheet. I save throughout the year though by putting £500 a month to one side – a savings account – so I have the money ready to pay the tax bill at the end of the year. Anything left over, £2000ish, will go in my pension pot.
I know roughly what I’ll earn now as I’ve been full-time blogging for a while, but if you’ve no clue how much all your outgoings are then search Google for a ‘self-employed tax calculator UK’ where you can enter your monthly income and it will tell you how much tax and expenditure for student loans, etc, you’ll have to pay on that. Then you can put this amount to one side and do the same the next month. This might be a handy way of doing things if your income really fluctuates each month. If you save too much then just see it as savings! Better to save too much rather than too little or nothing at all! You want to be prepared and all saved up for your tax bill at the end of the year.
Hopefully these 6 tips have been useful. By no means is this a definitive guide! There is so much more I could say, but this is a good starting point. You’ll also need proof and amounts of any interest earned on savings for the year, dividends earned and other income such as from an employed job. Basically, just keep records of all monetary income or make sure you have digital access to them as proof and for filling out your tax return when the time comes. The HMRC website really is so helpful and full of so many guides to help you or you can always choose to seek professional advice or hire an accountant to make the whole process as easy as possible.
If running your own business from home has always been your dream, you might be happily settled in your office space all day not thinking about the dangers. Whether you are working too much, forget to eat healthy, or simply neglect going out and exercising, your body will tell you that you need to make a change. It is important that you listen to the early signs before it is too late.
Below you will find a few areas to focus on when working from your home office.
We are often too caught up with projects, blogging, and updating our sites that we completely forget about eating healthy. You need to find time for breaks when you can sit down away from your desk and enjoy a delicious and organic meal. Whether you take the time off at night to make yourself a salad you can eat for lunch, or are making a sandwich when you are having a break, you will have to allow your body to digest the food, too. Snacking on chocolate and crisps will be very bad for you long term, however easy it is to grab these junk foods! Instead, search online to find easy vegan snack ideas on websites such as Authority Health.
I always make sure I stop for a lunchbreak and sit down in another room for 30 minutes to refresh my mind and ensure I don’t rush my food.
If you are constantly busy running your business, chances are that you need to create an exercise routine. Start your day with a green smoothie or tea, jump on the yoga mat, and make sure that you stretch during the day, especially if you are sitting by the computer most of the time. Take the dog for a walk, go down to the local coffee shop to meet with clients, or just do a quick HIIT sequence. There are so many videos for free on YouTube and you’ll be able to find an at-home exercise routine for however long or little time you have.
I always start my day with some yoga to set my mind up for greatness and to awaken my body.
Posture and lower back
Sitting on front of the computer will put too much pressure on your body, even if you have an ergonomic desk and chair. If you start feeling your lower back at night, you will need to start doing regular stretching exercises to relieve the pressure on your joints and your muscles, so you can avoid long term problems.
I have just invested in a walking treadmill which goes under my desk and a rising laptop stand so I can stand and work, or even better, I can walk and work!
Starting at the computer all day doesn’t do any good to your eyes, either. There are a couple of things you can do to prevent eye strains and sight loss. Make use of natural light, adjust your chair, screen, brightness, and prevent glare. However, once you have had an eye test and you were told that you need glasses, you will have to make a decision. Learn about the difference between varifocal glasses vs bifocal glasses and support your eyes through healthy diet.
My desk is positioned next to the window to make use of natural light and I try to look away from my screen, at least for my lunch break, to give my eyes a rest.
When you are sitting down for a long period of time, you might find that you get pins and needles and your legs become swollen or painful. You can get a foot rest for your home office that will support your legs, but using various leg stretches, or even standing on your head or your hands for a few minutes each day will help you prevent issues, such as varicose veins.
Again, try a standing desk to prevent sitting down all day. It doesn’t need to be expensive – simply find a stand you can put on your existing desk so you can reach your laptop standing up.
If you spend a lot of time each day in your home office, it is important that you are aware of the health risks and address them every day. It’s still possible to take care of your health even when working from home.
Great blog posts if you’re a parent who works from home: