Becoming self employed... the cheap way
It's a recession, it's a recession....! Yes, we know there's a recession. We know because people are taking on second jobs to pay for their mortgages and feed their kids. We know because it's all over the news. Our friends are talking, we hear it in the pub (if we can aafford to go down there), it's in our twitter feeds, facebook timelines... oh and our blogging sites. The clever people however, aren't taking on second jobs... they're creating businesses. (Before I even go on to explain about this subject matter, my personal views are, that if feasable, investing in assets is the way forward). Making money out of past times they enjoy. I'm losing count of the amount of new clients I have taken on in the past 12 months who are doing this. Luckily these people who have approached me have more of an entrepreneurial spirit they could ever know about.
I can say this in comparison to the 'clever' people who are still trying to save money but not engaging an accountant just for 'cost' reasons. Never the less, by the second or third tax year, they're out of their depth. Completing online tax returns (90% of the time incorrectly), then deciding that they dont fancy paying the tax bill that they have created. Time to get some taxswag. Cue the accountant.
The accountant told them, they could've appealed against the £100 penalty incurred during the first year. Of course, these people don't know about 'appeals', 'section numbers', under such and such 'An Act'. They also didn't understand the National Insurance rules.... another cost of £120 erradicated. Total savings £220.... the accountant hasn't even begun to explain the technical side of preparing accounts and calculating profits.
At this point, they're a bit red faced. But mostly intrigued. Starting to see the sense of having a professional organise their affairs, saving money and time. With the redface on the increase - not having the most organised records, started to realise they had missed out on multiple expenses against their profits to lower their tax bill. Simply stating, that they "didn't have time" to put their paperwork together regularly.
This accountant, in less than an hour - explained how they could have saved them their administration time in dealing with the tax man, whilst the client could've been at work making more money - but most importantly saving money on their tax bills with their missed expenses..... Expenses they didn't even know where tax allowable. The most important thing though, being that the tax return was submitted with sensible, but legal figures.
Needless to say, the client signed up. All taxswag happy.