I have bitten the bullet, handed in my notice at work and will be going freelance late spring/early summer. Initial research suggests that I will be best off setting up as a limited company so need to find myself an accountant.
Can anyone suggest a good way of starting? What should I look for in a good accountant?
I am going to ask friends etc but I don't know that they will be much help as none are self employed. I have searched the internet and found the big guys like Brookson, are they any good?
Thanks very much for the links - they are really helpful
Why go limited? I was planning on going sole trader but have probably read so much I have got confused! One reason to find an accountant is to get proper advice on what I do/don't need to do to start off with.
Having read quite a bit on here and other places I thought going limited would be the best option in terms of tax etc. Once I am up and running I am hoping for income in the region of £3500-£5000 a month with minimal expenses as I am essentially selling my time/expertise.
Thanks TalkinPeace - I think you are right - starting off as a sole trader is sensible. I still think I might need an accountant - I have never done a tax return or anything.
Although I am pretty confident I can do the job as a freelancer well, know my customers and can deliver the work, I am on a steep learning curve with the accounting and admin that comes with it (as you might be able to tell!!)
Sole trader definitely. They used to offer newly registered self employed people a half day tax session. It was a bit dry but told you what records to keep, the basics of offsetting and how to fill a tax form in.
I got an accountant early on. I found mine via a networking group
BNI are pretty bad (unless you've always wanted to be a Mason) but google your area and networking and you'll find a few. Most cost around £10 for a breakfast so go to a couple and meet some real people who make the effort to get to know people.
You absolutely don't need to be registered as limited to be a specialist writer. Cos I am one
The accounting is really, really simple as you have no goods in and out, you're only selling your time. I keep my own records (simple excel spreadsheets and a folder for receipts) and do my own tax return. For the first three years I took it to an accountant to check over for me. The first year he helped massively (but we'd also sold a property so had CGT as a couple) the second year pointed out some things I'd missed, the third year he said 'you've got it Wilson' so last year I did it myself. Easypeasy
Wilson - I figured the accounting would be reasonably simple and have been somewhat confused by so much information suggesting limited is the best way to go.
Beyond a new computer and printer my expenses are going to be so minimal. I'm going to give it a go myself and get an accountant involved for the tax return I think.
So next question then - are any of the book-keeping/software packages worth it over excel (I was looking at Xero last I think)? I'll need to keep timesheets and do invoices but it doesn't need to be fancy.
I open a timesheet for each job in Excel and I fill in the start and finish times as I go.
I have a 'master' spreadsheet - on that I note every job, the invoice number and the total. When I invoice it I highlight it yellow, when it's paid I highlight it green. This is very useful - cashflow is everything in this game, getting invoices out and money in is something you do need to keep on top of.
For invoices I have a word template that I save as a pdf before sending.
I have a separate bank account (you don't need a business account) where my very few expenses come out (phone, subs) and I do need to get better about using its debit card to pay for things like paper (which I tend to just pick up at Tesco so it gets lost in my general shopping bills).
And that's it. 15 mins admin per job? (save timesheet, fill it in, create and send invoice, mark it on main spreadsheet, mark it invoiced, mark it paid).
I think some of the fancy-dan packages will save you a little time (the timesheet automatically generates the invoice and things like that) but you then have to look at whether the cost is worth it. Remember you offset your expenses against your tax, but they are still expenses which come out of your profit! (Don't want to teach you to suck eggs but it took me ages to grasp that one!)
I would say for the first year at least, keep it simple.
Ahh this is my biggest bug bear at the moment! If you go limited, you will need an accountant and I agree with the above posts, start as sole trader, get insurance and avoid the limited side of things until you get more of a feel for your business and your profitability because it is so much simplier as a sole trader!
Coming across a lot of people who have gone limited when they should have started off as a sole trader and are now having to pay a lot of money in fees to ensure meet they meet all the requirements...