When it comes to setting up as a sole trader, the world of bookkeeping can be a rather confusing place. However, you don’t have to go it alone, here at Hurren Accountants, we provide a range of specialist services to handle all types of sole trader accounts and actively provide dedicated support for sole traders across all industries.
Here we take a closer look at how sole traders everywhere can get the help they need to handle their accounts like a pro and uncover the essential tips that make bookkeeping a breeze.
Tracking monthly income and expenditure
Whether or not you choose to enlist professional help or not, it is essential that you keep a close eye and detailed records of your monthly income and expenditure. Retaining invoices and receipts is a vital part of this process and will keep the tax man at bay when it comes to completing that annual self-assessment.
As well as tax, National Insurance contributions must also be paid and we advise contacting HMRC to set up a Direct Debit so this commitment takes care of itself.
Managing sole trader accounts
As Newcastle’s leading accountants, we always recommend getting expert assistance to translate the jargon that often goes hand-in-hand with managing sole trader accounts. We assist individuals that are new to sole trading and established sole traders looking for a streamlined bookkeeping solution.
Managing your accounts by hand is a rather old-fashioned and limited way of keeping your books balanced and entering the 21st century with an electronic spreadsheet or even online accounting software can be a much more efficient way of keeping track of your invoices. As a sole trader you must record all income, expenditure and VAT, if you are VAT registered, as well as detailing when invoices were issued and paid.
Tax deductible expenditure for sole traders
There are a series of tax allowances and reliefs available for individuals that are self-employed, however, most sole traders tend to steer clear of this area as they feel it is fraught with complications.
Don’t be afraid to get the relief you are entitled to as this can dramatically reduce your tax bill. Costs that you pay out whilst earning profit are known as ‘allowable expenses’ and can be claimed for. These allowable expenses include accountancy and professional fees, insurance, rent for your business premises or business usage if you work from home, postage, wages, business bank charges and phone / internet costs.
Not claimed your allowable expenses during subsequent tax years? Allowable expenses can be claimed for the current and past four tax years!