Sole Traders / Self-Employed
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 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. We can also offer last minute Self Assessment Return Help.
What Services Do We Offer?
- We can do the whole hog - 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. Our tailor-made system will take a minimal amount of your time, 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. Depending on your preference, we can provide paper schedules, spreadsheets or easy-to-use accounting software. Having a new system to your books can seem daunting - but it can also revolutionise the way you run your business!
- If you are self employed but purely work for others 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. For these kind of straight-forward returns we off a discount on our usual self-assessment fees - contact us for details.
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 company in the future. We'll even talk to the HMRC on your behalf!
Our rates are shown on the What We Charge page.
Additional Services:
Set up / submission of returns for VAT; Set up / submission of returns for CIS; Help with Employing People / Payroll, Providing regular Business Information - P&L, Balance Sheet, Customer Information, Supplier Information, Profitability.
HMRC & Record Keeping
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 (unless you have a different year end to the tax year).
You have until 30th Sept to file it by post or 31st January the following year to file it online.
Late returns are charged a penalty of £100. 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.
An annual stock check is also recommended.
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.
