Top tax saving tips for the self-employed

The most frequent question I get when I meet clients starting their new business is how to reduce their taxes. Obviously this is a loaded question and most of the work we do is geared towards insuring that our clients pay their fair share but not more! There are hundreds of ways you can reduce your tax liability but if you can do just 5 things, here they are:

1. Incorporate

When you start your own business, you have basically 2 options: run your business as a sole trader (or a partnership) or setup a limited company. The sole trader option can seem quite attractive since it's quite simple to administer. However, using a limited company can bring significant tax savings since companies are not subject to National Insurance. As a matter of fact, for a company with annual profits of £80,000 the overall tax savings can be as much as £5,000 per year.

Top 10 tips for better time management

Another top 10. It's not because I can only count to that! But I feel that summarizing and ranking issues on a given subject makes it easier for a blog reader to glance at and decide if it's worth going into the details.

Today's top 10 is on a subject that is only remotely connected to tax or accounts but that is so critical when you start up your own business that I thought it deserved some attention. It's about time management and because entrepreneurs are known to have way more daily work than a day can fit in,  it's critical that they do everything they can to optimize their day.

So here is the list:

1. Plan. If you fail to plan then it usually means that you plan to fail! You probably have a business plan. How often do you review it? Have you set long term goals, short term deliverables, how do you measure your progress against those? Everyone is different, every business has specificities but it is critical to setup goals and measure yourself against them, readjusting along the way. Your long-term objectives need to be split into short-term deliverables, all the way to the daily todo list. And you need to make sure that the objectives are specific and measurable, realistic and yet challenging. 

The 10 key steps to creating your business - part II

I wrote in a previous post about what you should do when starting a business. That post talked about what you need to do before or right at the start of your new venture. This post now discusses what you should do right after that and picks up where the previous article left off:

6. Get an address and a phone. For the office there are a lot of brokers out there that will be happy to find the right office for you. Some people start from home, and use serviced offices when and as required. Regus has some very flexible plans that allow you to use their premises when needed for business meetings. Another option is to check some of the self-storage companies such as Access Storage that also provide offices for rent at very competitive rates. You can also share an office with an existing business. Gumtree is a good place to start if this is what you are looking for. As for the phone, having just a mobile number on your business card is not a good idea. Fortunately, most VOIP vendors can provide you with local numbers (including fax lines forwarding faxes to your email) that you can easily use wherever you have a broadband connection. Be careful though as some vendors can lock you in since there is no automatic number portability for fixed line numbers. Some brokers can help find the right solution at not cost for you and you should use them. Skype is also a viable solution, even though it is not based on open standards like SIP.

10 tips to improve your Credit Control

We all know that there is only one way to go bust: lack of cash. Cash-flow management is therefore just as important as profit monitoring when it comes to manage your business. And the best way to do that is to keep a close eye on what accountants call the Aged Debtors list: those clients who have been billed but have not paid yet.

So how do you do it? Here are 10 tips you should follow to become a pro at managing your cash-flows:

1. Don't extend credit. This one is obvious: if you can avoid offering credit, you don't have a problem to solve any more. Unfortunately there are very few businesses that can afford to not offer credit. In most cases you will have to offer some level of credit. If that's the case, read on.
2. Do not invoice manually. With many systems to choose from, some for as low as £10/month, you should not invoice clients using Microsoft Word. Whether it's Kashflow, FreeAgent, Xero or Sage, all allow you to specify your standard terms and will alert you when a bill is overdue. They will also produce the Aged Debtors automatically. Lastly they will allow you to keep notes so that you know why the bill has not been paid next time you call to follow up.

The 10 key steps to creating your business - part I

You have decided to start up a new business. It's a lot easier to do in the UK than in some other Europeans countries. Yes I am thinking of France and its famous red tape. However, while it's easy to start a new business it's also easy to make the common mistakes that cause 1 in 3 start-up businesses to fail in the UK.

So if you don't want to be in that 30% bucket, what are the top 10 things you should do as soon as possible when you create your own business?

1. Choose a name for your business and protect it. If you intend to build your brand you need to trademark it. The name does not have to be the same as the one of your company. As a matter of fact, if you are a sole trader, your legal name would be "John Doe trading as Amazing Widgets" for example. 
2. Decide on the legal structure. Sole Trader, Partnerships or Limited Companies all have benefits and drawbacks. Make sure you understand all the implications (and costs) before you decide on a given structure. Most accountants will be happy to provide a free consultation to help you out. We at TaxAssist Accountants certainly do.