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I have a full time job PAYE and have recently started a second job doing a few days per month self employed. So I am looking at getting some kind of accounting software to keep track of and generate invoices as well as keep track of expenses etc so I know what tax to pay at the end of the financial year.
My first job is a high salary where I already get the full tax free allowance.
Do I need to register etc and what are people using for accounting?
Freeagent is very good and easy to use as a non-accounting sort of person.
I use Quickbooks online.... does everything but seems to have subscription creep!
A spreadsheet will do it. Make sure you put say 30% away in a separate account for additional tax and NI if you are in the 20% tax band. If over this (40% tax) then increase the amount.
You can declare self employed income annually, but look at the guidance on gov.uk.
You'll already be paying NI Class 1 anyway as employed, but maybe worth registering as part time self employed to pay over the Class 2 weekly. Class 4 is annually.
Definitely put cash to one side for any tax bill.
A spreadsheet will do it.
A spreadsheet won't generate invoices. Seriously, for the minimal cost of online accounting software, there is absolutely no reason to try to cut corners.
I use my own personal bank account, just use Excel for recording and HMRC's self assessment free system. Have done for years, never registered, but I have an accounting background (a long time ago) and know what to do-ish.
- You do need to register with HMRC
- Use something like Freeagent or Xero which connects to HMRC services. This makes making submissions easier and the business rules help with identifying the correct rates e.g. only the first 10,000 miles is payable at 45p per mile
- Freeagent is free with a RBS or Natwest business account.
- DO get a dedicated account for all your incomings and outgoings as it will make it easier for making returns.
I think there is a government scheme to digitise SME’s that will get you £2k or so of free accounting software.
Outside of that as a sole trader with minimal complexity if you look around you'll find cut price accountancy co to do it all for £35 a month.
MrsIHN does some self-employed stuff on the side of a full time PAYE job.
You very probably don't need any accounting software, you don't need to register anything, she doesn't.
There's a trading allowance of £1k which you can effectively use to cover your expenses, so you don't need to specifically track them unless they're going to come to more than that, and, assuming it's not many invoices, invoicing can be done from a MS Word template and tracked in a spreadsheet
Just keep a note of self-employed income and stick it on your tax return each year (which is also where you claim the trading allowance)
I've just moved from a spreadsheet and manual invoicing to Xero (basic subscription) and wondering why I didn't switch earlier. Auto feed from my free sole trader Mettle bank account, app to upload receipts, massive paperwork headache gone. Does quotes, invoices, recharging of costs, accountant has access, etc. Taken a bit of effort to get it set up but it's good.