Going Self Employed as a Mate

Charlie_Don't_Surf · Oct 23, 2023

Hi all

Quick question - I'm going self employed as an Electrician's mate as from the start of November. For this purpose, I'm looking to get rid of my car and buy a van.

Does anyone know whether I need to wait till I am actually registered as self employed before i buy the van, in order to be able to claim it as an expense for tax purposes? Or can I just buy it now and still claim for it on expenses once I've gone self employed?

Also, any advice about whether its better to wait until I've completed my final month's notice with my current employer before i register as self employed? or could i just do it now.

I've looked online for general advice about these questions, and asked my accountant as well but he's not got back to me yet and I want to crack on and get stuff done ready for starting in November.

Also, I'm wondering if anyone else has any tips about how to record incoming and outgoings, and stay 'on top' of being self employed in general? So far I've got an accountant, will be using Quickbooks, and have set up a separate bank account so it's easier to track my business income and expenditures.

Thanks in advance

nicebutdim · Oct 23, 2023

Your accountant won't be writing the cost of a van against your first year's capital expenditure, but over a number of years. As such a month is neither here nor there.

Set aside time to keep on top of accounts or they become a royal pain in the backside. Some years I do this and some years wonder if I'll ever learn. I don't use any software and instead manually record everything on a spreadsheet. This isn't time consuming if you keep on top of things, but.... I keep thinking about investing in software.

As well as registering self-employed, you'll want to register with the Construction Industry Scheme as any reputable contractor will expect a CIS number before paying invoices. CIS deducts 20% off all labour payments and sends it straight to HMRC. Come tax return time you don't have to find a chunk of money you should have set aside and instead will generally expect to receive a rebate, which is always nice.