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A lot of people that are employed and thinking of being self employed have a natural fear of going self employed due to keeping there own accounts, tax, how to pay themselves a wage etc, well here is part of my Tiling course on that subject, it should help you out
There is only one important issue in a business and thats profit, if it doesnt make a profit then you aint got a business and you fail.
Doesnt matter what kind of business you are running it basically boils down to the same results, you will have a turnover ( how much money you have taken) then you have expenses for stock / materials bought and expenses for daily running costs ( advertising, tools, fuel, etc)
For example Takings in first week say £600
materials bought £100
Running costs £80
___________
Profit £420
To work out your profit simply take away both expenses away from your turnover then thats how much you have made, you can work it out over a weekly, monthly or yearly period
There are account books that you can get from Staples or Stationary shops called Collins Account book or Simplex D account book, these books will have a 52 pages, 1 page for each week of business and will be set out as a template so you can imput your turnover on a daiy basis and record your expenses in the appropriate collums then do a simple summary at the end, do this right the way through your business year and you will end up with a yearly profit summary of your business
Tax
You are liable to pay your own tax
So to basically get a rough idea of how much tax you would pay on this profit figure, just multiply your profit by about 20 % tax rate and that would be a rough idea of how much you will owe
Profit for week= £420 x 20 % tax = £84
Do this on a monthly basis
You will be paying tax every 6 months, 31 January and 31 july so if you do the above every month you can put you tax money in a seperate account so you will have the money when the bill comes around
How to Pay yourself a wage
Open 3 bank accounts
1 business account
2 current account
3 Tax / savings account
Put all your money business money (turnover) in your business account then set up a direct debit to pay your current account the salary you want, then on a monthly basis work out what tax you owe then take that money out of your business account and put it in you tax / savings account, so you can live from your current account, your tax will be taken care of ( in your tax / savings account) when the 6 month bill comes in and your business account is your money as well as it has had the tax taken off it
This is easier and all explained in more detail on the first morning of our tiling course and you will do an actual simulated weeks worth of business figs so it will be crystal clear, hope you have found the above easy to follow, dont be put off if its a little unclear to you it is very easy once explained with a little more time
Lastly, Keep all your receipts for expenses and get a duplicate book for your customer receipts
Give the whole lot to an accountant at the end of your tax year and he will ballace your books up for you
Hope this helps you guys out
Regards
Darren
North East Tiling Training
There is only one important issue in a business and thats profit, if it doesnt make a profit then you aint got a business and you fail.
Doesnt matter what kind of business you are running it basically boils down to the same results, you will have a turnover ( how much money you have taken) then you have expenses for stock / materials bought and expenses for daily running costs ( advertising, tools, fuel, etc)
For example Takings in first week say £600
materials bought £100
Running costs £80
___________
Profit £420
To work out your profit simply take away both expenses away from your turnover then thats how much you have made, you can work it out over a weekly, monthly or yearly period
There are account books that you can get from Staples or Stationary shops called Collins Account book or Simplex D account book, these books will have a 52 pages, 1 page for each week of business and will be set out as a template so you can imput your turnover on a daiy basis and record your expenses in the appropriate collums then do a simple summary at the end, do this right the way through your business year and you will end up with a yearly profit summary of your business
Tax
You are liable to pay your own tax
So to basically get a rough idea of how much tax you would pay on this profit figure, just multiply your profit by about 20 % tax rate and that would be a rough idea of how much you will owe
Profit for week= £420 x 20 % tax = £84
Do this on a monthly basis
You will be paying tax every 6 months, 31 January and 31 july so if you do the above every month you can put you tax money in a seperate account so you will have the money when the bill comes around
How to Pay yourself a wage
Open 3 bank accounts
1 business account
2 current account
3 Tax / savings account
Put all your money business money (turnover) in your business account then set up a direct debit to pay your current account the salary you want, then on a monthly basis work out what tax you owe then take that money out of your business account and put it in you tax / savings account, so you can live from your current account, your tax will be taken care of ( in your tax / savings account) when the 6 month bill comes in and your business account is your money as well as it has had the tax taken off it
This is easier and all explained in more detail on the first morning of our tiling course and you will do an actual simulated weeks worth of business figs so it will be crystal clear, hope you have found the above easy to follow, dont be put off if its a little unclear to you it is very easy once explained with a little more time
Lastly, Keep all your receipts for expenses and get a duplicate book for your customer receipts
Give the whole lot to an accountant at the end of your tax year and he will ballace your books up for you
Hope this helps you guys out
Regards
Darren
North East Tiling Training
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