If you are a sole trader / self-employed, the records you must keep, and the legal returns that you must make are usually straightforward. But sometimes it can feel like you are lost in a maze!
At Clear Cut Accounts we realise that you should be spending your time running your business and making money. By showing you the best way to attack your accounts and finances, we can greatly reduce the time you take on paperwork – freeing you up to spend more time focusing on your business, or even taking time off! From day one – we will listen to you and set up the kind of system you are comfortable with – either cloud, computer or paper based.
Why Get Us Involved?
The HMRC have complex rules and regulations, but there are many allowable items that small businesses can claim on their return to reduce the tax they pay. There are also lots of items that are not allowed. We know the rules, and we can ensure that you claim for all your allowable expenses, to minimise the tax you pay.
What Services Do We Offer?
- We can do everything – take all your records and receipts, create a ‘set of books’ for you, and do your Self Assessment Return, filing it online for you as your agent; or
- We can set you up to do some of your accounts yourself on paper schedules or spreadsheets. Our tailor-made solution will take a minimal amount of your time through the year, but will give you regular data to help you run and grow your business; It will also reduce the fees we charge you for future returns – as a lot of the preparation work will have been completed.
- We can set you up and train you on easy-to-use cloud accounting software, such as FreeAgent. Having a new system to your books can seem daunting – but it can also revolutionise the way you run your business, giving you live up-to-date data and drastically reducing the time it takes to do paperwork. Situated on the cloud, it is also a safe and secure way to keep your data – which will be completely protected if anything was to happen to your PC in the office. We can obtain reduced price licences, and set you up with a monthly Direct Debit plan to spread our costs across the year. See our FreeAgent section for more details.
If you are self employed but purely work for others as a sub-contractor, your returns are usually simpler, but you can still offset many of your expenses to reduce your tax bill. We can pull together your records, and do your Self Assessment Return, filing it online for you as your agent.
Whichever option you choose, we will explain what your figures mean, what you can do to improve profit and minimise the tax you pay, and even offer advice on how to grow and develop the business in the future. We’ll even talk to the HMRC on your behalf!
Our rates are shown on the What We Charge page.
Other Services We Can Provide
We realise every business is different, and have a wide variety of requirements. In addition to the above core services, we can also provide the following services:
- VAT Registration and Returns
- CIS Registration and Returns
- Employing People / Payroll
- Providing regular Business Information – P&L, Balance Sheet, Customer Information, Supplier Information, Profitability.
Sole Traders: Key Questions Answered
1. What Is a Sole Trader?
A Sole Trader owns and runs a business on their own. They can employ people and still be a Sole Trader, but they have to make all of the decisions by themselves, and they remain personally responsible for all debts the company runs up. All Sole Traders are Self Employed. For Self Employed Partnerships see the Partnerships section.
2. What Returns Do I Need to File as a Sole Trader / Self Employed?
You will be sent a Self Assessment Tax return by the HMRC in May / June. You have until 31st October to file it by post or 31st January the following year to file it online. Late returns are charged with an automatic penalty of £100, with further charges if it is over 3 month’s late. Late payment of tax will be charged interest. You do not have to complete formal yearly accounts, but it is recommended that you prepare regular reports to monitor your business’s performance.
3. What Records Do I Need to Keep?
- A record of all sales and takings, including cash receipts – e.g. till rolls, sales invoices.
- A record of all purchases and expenses, including cash purchases, e.g. receipts, purchase invoices.
- A record of all of these transactions in your bank account, e.g. bank and credit card statements, cheque book stubs, paying-in slips.
- A record of all employees, CIS payments and VAT if applicable. An annual stock check is also required if you hold stock.
We recommend these records are kept for 6 years.
4 . What Will Happen If I Don’t Keep Accurate Records?
The HMRC can ask to see your records up to 6 years after they are filed. If they find any missing documents or mistakes they can demand the underpaid tax, and can also charge you heavy penalties. Further penalties are payable for VAT registered companies.