Self employment?

[dudnogirl]

I've just been offered a job on a set employment basis and I'm wondering how easy is it to do.

Do I save 1/3 of all monies towards tax etc? Anyone got a rough guide. I don't want to register then get a huge tax bill.

How do you work out a wage etc?

Do you have a separate current or business account?

Please help xxx

 

[linzi]

I would be very careful to understand exactly what is being offered here.

Are they offering you a space to rent, whereby you can set your own prices, use your own products, etc. Or do they expect you to wear their uniform, work to their hours, use the products of their choosing and be paid a rate of x per hour while paying your own tax and NI?

If it's the latter, then run a mile.

With regards the second, I take off 1/3 of whatever I earn and put it into a separate account. This way, I know my tax and NI are pretty much covered.

I do have a separate account (two actually, one for day to day expenses and the other for the aforementioned tax and NI to stay in).

For a wage, work out how much you want to earn per hour, add in your product costs and other expenses - be sure to include rent, insurance, teas, coffees; everything you can think of - and then you'll know what to charge per service.

 

[dudnogirl]

Thankyou for the reply Hun.

I'd be renting a space and using my stock and choosing my hours and uniform etc.

Regarding 2 accounts (good idea) are they basic current accounts or business accounts?

This would be my first position so really not sure on anything lol xx

 

[fluffycloudland]

You don't have to have a business account unless you're a private limited company and you wouldn't want to go straight into that because it's a more involved tax return.

Keep it simple.

Two accounts, I always use different banks, just basic ones you can pay money into and buy stock with and keep every reciept for claiming it back off your tax return.

Ring the HMRC help line, their very helpful and will guide you through it.

 

[dudnogirl]

Thankyou Hun. Xx

 

[linzi]

Thankyou for the reply Hun.

I'd be renting a space and using my stock and choosing my hours and uniform etc.

Regarding 2 accounts (good idea) are they basic current accounts or business accounts?

This would be my first position so really not sure on anything lol xx

Ah, well that's OK then - good luck!

Haha, I couldn't find this post again!

I have two basic current accounts. One with Halifax because they are local to me, and the other with tesco bank - because there is no minimum pay-in each month (and it earns 3% interest).

 

[Jake nattrass hair]

Hi there I have been self employed a few years now. I have 2 accounts one in which I put all my takings and my personal account.
For me I put all my takings in my buisness account then every week I pay myself a set wage which I worked out would cover all my personal bills and give me some spare money each week to do as I please.
The money that is left in my buisness account pays for all my stock, my tax, insurance and all other buisness needs - this works out well as if I have a good week my buisness account is higher and if I have a quieter period I don't have to suffice my personal pay as my buisiest periods even if all out.
This works well when taking holidays etc as I'm still getting paid. I just remember to myself when I'm on the peak of buisness to not be greedy and pay myself more - keep it in the buisness account and it it will keep you afloat.

 

[redlottie13]

Good idea about paying yourself a wage ......not sure I Can do this straight away though having only just opened my shop.

How do you all calculate it? X

 

[Jake nattrass hair]

calculate your personal outgoings per month for example say it came to £1000 the divide it by 4 which is £250 per week which is what you need JUST to cover personal bills.
Then calculate your buisness general average income say for example £2500 monthly based on taking £600 solo a week.

So you bank £600 per week
You bill money is £250

Leaves you with £350 per week leaverage so monthly that's £1400

So then you subtract buisess expends per month, salon stock etc i try save some money for tax also - always estimate higher

Then whichever sum your left with e.g £300 I split that per week which is £60 per week which I add only the the £250 which gives me my personal allowance for the week.
Remember this is only an average so weeks when you take more money you don't pay yourself anymore you just keep it in buisness account then the weeks you are maybe quiter I find this evens it out.

Hope this sort of helps you the figures I made up were random but it's more to try explain my logic.. this is without client tips. X

 

[redlottie13]

calculate your personal outgoings per month for example say it came to £1000 the divide it by 4 which is £250 per week which is what you need JUST to cover personal bills.
Then calculate your buisness general average income say for example £2500 monthly based on taking £600 solo a week.

So you bank £600 per week
You bill money is £250

Leaves you with £350 per week leaverage so monthly that's £1400

So then you subtract buisess expends per month, salon stock etc i try save some money for tax also - always estimate higher

Then whichever sum your left with e.g £300 I split that per week which is £60 per week which I add only the the £250 which gives me my personal allowance for the week.
Remember this is only an average so weeks when you take more money you don't pay yourself anymore you just keep it in buisness account then the weeks you are maybe quiter I find this evens it out.

Hope this sort of helps you the figures I made up were random but it's more to try explain my logic.. this is without client tips. X

That's great thanks! Totally makes sense. .....now I have to stop dipping into the business money!

 

[Jake nattrass hair]

Your welcome.. yeah dipping into buisness money you should stop.
I know salons who owners have though yeah this is great dipping into buisness money all the time for personal spends then when something happens in the salon - which inevitably it will aka boiler needs fixing or you need some new equipment and it's houndred if not thousands they think sh** I don't have the money put away to do so.
Just be careful having the money is great, How you spending the money is wise - best thing a client ever told me and she's a financial advisor!

 

[redlottie13]

Your welcome.. yeah dipping into buisness money you should stop.
I know salons who owners have though yeah this is great dipping into buisness money all the time for personal spends then when something happens in the salon - which inevitably it will aka boiler needs fixing or you need some new equipment and it's houndred if not thousands they think sh** I don't have the money put away to do so.
Just be careful having the money is great, How you spending the money is wise - best thing a client ever told me and she's a financial advisor!

That's a very true statement! Luckily the business is only 4 weeks old so these things are the things I want to know now to stop me making the mistakes x