I am thinking of becoming self-employed, any advice/help/warnings would be greatly appreciated! | Page 2 | on ElectriciansForums

Discuss I am thinking of becoming self-employed, any advice/help/warnings would be greatly appreciated! in the UK Electrical Forum area at ElectriciansForums.net

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Hello everyone I am new to this forum so ease me in gently!!!

I often found myself coming across this forum when I was seeking help or advice towards queries I had.

I am an Approved Electrician with 8 years experience across domestic, industrial, commercial and medical locations. I am often doing jobs on a night time or on a weekend and I feel it maybe time to take the plunge into self-employment and setting up on my own.

I am not naive enough to know it will be easy and a roaring success- hence why I am here. Any sort of heads up or advice that people have would be greatly appreciated or what I should be aware of by doing this sort of transaction.

Any help would be appreciated!!! Thank you!
 
As other have said, speak to an accountant before you start, maybe also see if there is any support for start-up businesses who can also give advice.

The gov is moving towards its "Making Tax Digital" goal so whatever you do for submitting to HMRC it has to eventually be done electronically. Getting one of the accounting packages makes a lot of sense (my accountant recommends Xero, above have said QuickBooks, but go with whatever your accountant tends to use as they will guide you). One major advantage of many of those packages is they help you collect travel info on jobs automatically for billing/mileage reclaim, allow invoices you pay to be photographed and noted as they happen, and to keep tack of invoices being paid (or not). Whatever you do don't end up with a sack of paper at the year's end!

You might want to become a Ltd company. You will need to be VAT registered if total business income is above £85k in any 12 month period (not just your accounting year) but it might be an advantage even if less as you probably will have a fair amount of stuff you can reclaim on (as others have pointed out), again an accountant can advise.

You will need to open a bank account for your business. If a sole trader you might get away with another personal account, but for a Ltd company this will have to be a business account (the only real difference is they they will charge you for the privileged of having it). Keep your work and personal transactions well clear of each other, arrange to pay yourself as needed from the business account, otherwise you risk real trouble if anyone investigates unfounded allegations. If you form a company then these days HMRC want PAYE done in real-time, for that you can either use some feature of any accounting software you use, or see if your accountant runs a payroll service.

You will also need business insurance. For general sparky work that should be simple enough to find, and also make sure your car/van is covered for business work and not on domestic car insurance. Again it can make sense to find a local insurance broker you can speak to, they are more likely to get you sorted with what you need than the on-line market sites.

Same goes for a pension scheme. Maybe not high on you agenda yet, but it will make a big difference one day. Don't delay in sorting it out!

For your sanity you might want to get a separate business mobile, or a dual-SIM phone, rather than using your personal phone with all of your friends on it. Allows you to set it to voicemail outside of working hours if you need peace, etc. Ask around as some of the companies (Vodaphone, BT, etc) offer various call forwarding options, to get the similar results with existing phones.

Finally don't forget some marking stuff. Business cards and the like to get your name known when you visit folk. I have seen some who get little stickers with their business name and contact info to put on CU, etc, after they finish the job.
 
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And don't forget PI insurance if you set up as a sole trader.

Quickbooks has payroll built in, and I never used an accountant, two tax inspections in the time I was trading and never a problem, in fact I over paid my VAT by £0.80 on one inspection, it only took two VAT inspectors three days to find that out.

Quickbooks also has built in Invoice templates, automatically tracks everything, can't recommend it highly enough.
 

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