Clean It Up
UK Window Cleaning Forum => Frequently Asked Questions & Useful Resources => Topic started by: Iain p on June 24, 2006, 04:41:02 pm
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Hi everyone!
Been reading the forum & it's very interesting.
I started cleaning window on my own on the 1st of june.
I went out knocking on doors and managed to pick up £350 of work a month!
I beleive you have 3 months to tell the tax and register as self employed. I sent my forms off last week.
I have kept all my receipts and have a list of all my customers addresses.
I haven't got a clue of to keep books! PLEASE PLEASE SOMEONE HELP ME. PLEASE
I haven't banked any of my earnings as yet.
Can I bank at the end of each month?
Do I just deduct all me expenses from my monthly income and bank what is left?
I am really worried about my situation and don't want to get into a mess
Please help me! :-[
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Iain
You can buy an accounts package like Quickbooks from £75
You can buy a small business easy to use accounts book from somewhere like WHSmith £9
Read some books on how to run a business
alternativly enrol in a business management course
Im not knocking you, but to start a business without fundamental buisness knowledge is not very good.
Regards Andy
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Hey
I have two business accounts.
One to pay the money earnt in and the other a reserve account to move my tax money weekly.
I pay all money daily or weekly. depending what i have been given or sent that day.
I then have my normal account and also a savings account.
I keep records as i go.
I record my daily takings in a ledger or cash book what ever you prefer.
My end of week totals will be all bankings for the week, actual cleaned,difference being money not collected.
I record cash and cheques seperatly in the same book.
Petty cash and millage.
I also carry over to keep an on going total of cleaned banked petty cash and millage.
This realy helps as you do not have to add it all up when the time comes.
My petty cash reciepts go into a monthly envelope.At the end of the month i write the amount and month on the front and then file.
At the end of the tax year all info goes into a file with that year on so easy to get to if needed.
Hope this helps
Reah
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Hey
I also record all tips.
Some will knock this but in my buisiness every penny is accounted for.
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Thanks for all your advise.
You have worried me even more now?
I don't want to get into trouble with the tax man! I just want to make an honest living.
Because I started and the begining of the month I have kept all the cash that I took in, in a box and kept all my receipts together for fuel and equipment.
I have all my customers addresses in microsoft excell and there I record the date when I did them and when they paid me.
Because I haven't paid anything in this month when should I pay it in? Can I pay in monthly?
I think i'm in a mess now and my heart is pounding. I dont have any one that can help me out! I'm only 20 years old.
What can I do?
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Hey
There realy is no reason to worry.
Just register then as you said you have all receipts do your banking as soon as you can.Then you can go on from there.
Again there is no reason to worry.
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Iain
the first thing you can do is stop worrying.
Have you opened a business bank account?
theres a very good manual accounting book called SIMPLEX D. Most stationers sell them. In it, every section is listed for you.
You write in your daily takings, your expenses, etc.
It even has sections for you to log when you've banked, and your own personal wages. Go have a look. Sometimes, the old fashioned way is worth trying, before trying the more complex computerised stuff. Good luck
If all else fails, I think you could go to an evening class.
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Thanks guys but I cant stop worrying.
I dont have a business account. I was told my a friend of the family just to use my personal account for now and switch to a business account after the first year is out of the way.
The only reason I didn't open a business account was that this was a last minute venture. When you go to open a business account you need to show a business plan and stuff like that. I just knocked on doors and started imediatley.
Your all probably laughing at me righ now and saying what a fool.
If I just pay in all my earnings for the next 12 months and keep all my receipts and pay a book keeper at the end to sort it out? Would this do?
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Hey
I do my tax return online.
When you first start it is probaly best to get some one to do your books but over time you will learn.
I do all my own accounts and do not have to pay some one else.
As said it is a good idea to get on a course there is allways a course to go on by the inland rev.
Give them a call they will point you in the right direction.
Do not be afraid to ask anything on this forum we are all here to help.
Reah
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Iain...I agree totally with the personal account. As long as your customers make the cheques out to you..........no probs. Just dont tell your bank what your doing.
I'm certainly not laughing at you. At 20yrs of age, you have alot of bottle going it alone. That is impressive!!
Good luck.
Try evening classes or speak to a local window cleaner or self employed person, and ask for help. People can be nice. Also, go have a look at a simplex D book. If it looks like you understand it.....go for it. It costs about £14.
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http://www.eurostationers.com/SIMPLEX_D.htm
http://cgi.ebay.co.uk/BOOKKEEPING-ACCOUNTS-EXCEL-SPREADSHEET-SIMPLEX-D_W0QQitemZ7249869524QQihZ015QQcategoryZ3781QQrdZ1QQcmdZViewItem
Computerised
http://cgi.ebay.co.uk/SIMPLEX-D-ACCOUNT-BOOK_W0QQitemZ260001073868QQihZ016QQcategoryZ121791QQrdZ1QQcmdZViewItem
Actual book
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Hey
busy
If you are registerd as a buisness why would you not tell your bank that the money you are earning is going into that account.
Why keep it quite.
I certainly would not advertise that fact on line. The last thing you want is the tax man on your back.
Abbey are a great bank to deal with Free banking no queing up you can deposit in the whole in the wall no charges.
Be honest in all your buisness dealings.
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Thanks guys for input!
Thanks busy for that links.
Would I be best going for one of the books for my first year or the computer accounting programmes?
Personaly I think the book would be easy for me to start with?
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Reah...........window cleaning is alot of cash. I think banks make vast amounts of money off the backs of people who can least afford it.
In my opnion (and I agreed with Iain on this point), he should open a personal account, which is free, using his own name. The cheques he receives are made out to him personally. WHY pay charges? I have been self employed for over 20 yrs....and have always had a personal account for my 1 business. The taxman sees ALL my personal bank account statements. I definitely did not say to hide anything from the taxman.
Now, back to the subject thread........Iain, book would probably be easier for first year. Do everything in pencil until you know its right.....its easy to alter mistakes then.
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Hey
Each to his own methods if it works for you great and well done.
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Thanks busy will go for book! ;)
Personaly I wish I didn't have to do all this tax malarki. But I have to :'(
Anyone who is starting up on there own should be tax exempt for the first year.
The gov should try to encourage people starting out but they are doing the opposite!!!
Iain
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Hey
I totaly agree it is hardly encouraging is it.
It can be a real scare.
I ran a national high street store for over twenty years one of the big three.
On a quite week we made over one million.
That was a real head ache.
Have been window cleaning for two years now and have not looked back even have some one doing two days a week now.
It will be the best move you ever made.
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Iain,
It appears you are not too familiar with your tax liability and record keeping.
My advice to you is this.
Go to an accountant, find a book keeper or one man band and sit down with him. He/her will be able to tell you what you need to do and then at the end of the year he/she will be able to submit your books without fear of you making a mistake.
The fee for this shouldn't be more than £150 per year.
This way you can keep the books how they want then kept and you can focus on building your business.
Don't panic, its really not all that.
In a years time you will be a lot better off understanding how it works and if you want you can go it alone with the books etc.....
Best wishes,
Trev
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Hi Iain
Have you registered your business with the tax office yet.
If not do not worry they give you 90 days i think.
The tax office do free course's for anyone starting out in business and they will show you how to do your accounts.
And what you can and can't claim for.
I went on a couple of these course's and thought they were great.
Also business link do some free course's aswell so might be worth you checking these out and maybe do a couple so you will then at least have a better understanding.
Paul
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Started on the 1st of june.
Sent the forms off last week to register the business!
Will the tax send me a book on how to keep books or do I phsyically have to go on a course?
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You have to go on there course and then they will give you some books to work from.
Although i think when i registed my business they sent me a little blue book thing through but to be honest i can't remember what it was.
Paul
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Hey
When you register they usualy send other info regarding courses etc.
If you phone them they can give you some info.
Do not be afraid to phone they are very helpfull when you do.
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Iain.
For the moment - until you set things up better - all you need to do is keep a record (handwritten if you have to) of each transaction and a daily total. Also, keep all business (or partly business related) receipts.
Tip number 2. Get an accountant.
Tip number 3. Get an accountant.
Tip number 4. Get an accountant.
You don't have to legally but I have found it invaluable. Shop around. If you keep it simple for an accountant, you needn't pay more than £250 a year and may get it for far less. Most accountants should take you on for a small deposit and you probably won't need to pay again until they produce your accounts.
I keep all my records on a spreadsheet and database (Microsoft Works). If you don't want to pay out for MSOffice, you can get a free download called Openoffice at
http://www.openoffice.org/
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Thanks guys
Could someone please be kind enough to email me a rough example of how to record incoming money and expenses. iain1358@hotmail.co.uk
P.S. I don't work every day as I only have a handfull of customers. I would be best to record on a weekly basis?
Cheers
Iain
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Ian,
INCOME
Get a 2006 Day to a page A5 Diary.
Each day you work, note the houses you cleaned and the amounts and who paid you.
Add up the amounts and write that at the top of the page.
(This method can also assists you in keeping track of who you have cleaned, when they're due again and who owes you money.)
That's your income aka turn-over.
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EXPENDITURE
Get an A4 ring binder.
For any item you pay for, for the maintenance of your business, keep the receipt.
If it's not A4 already, staple it to an A4 sheet of paper and put it into the ring-binder in date order.
Keep a running total of what your spending.
This bit's a little more complex, but if you use some common-sense, you won't go too far wrong.
That's your expenditure.
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So income minus expenditure = profit, and it's the profit you pay taxes on after you've used your personal allowance.
If you still really haven't got a clue, you should phone the self-employed part of the tax office and ask for courses and dates. They're run regularly and in many different locations.
I believe they last just one day and should tell you everything you need to know.
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I think the comment by Tosh re the Tax Office courses is very relevant here.
At this stage dont be afraid of the Tax Man, he and the department are there to help you and will guide you, give you leafelts to help and advise of courses you can go on to help you on your way. They will also advise what are allowable amounts of money you can claim as legetimate expenses.
At this time of your business, your financial accounting is important but you have to get this in perspective as you need to be out earning not worrying.
Keep it simple - write down all the monies you take as individual items cross-referencing them with who paid you, and write down all the items you spend money on to be able to go to work and do the job.
Talk to the taxman at this stage - its the best advice you can have
JohnL
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Something I quickly wrote, to get you going until you seek accountant or inland revenue help.
You do not need to log your own wages, as your business profit is taxed.
Hope this rough draft helps a little Iain.
Lizzy
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Something I quickly wrote, to get you going until you seek accountant or inland revenue help.
You do not need to log your own wages, as your business profit is taxed.
Hope this rough draft helps a little Iain.
Lizzy
That's fine Lizzy but a little more detail is required as a minimum. There will need to be a list of individual transactions regarding receiving money from customers. Accountants and/or the IR are not interested in this list normally but it would need to be shown if ever there was a future investigation. Records such as that need to be kept for seven years (6 + the current one). I've still got mine going back to 1991 but I'm a horder. :)
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If you use George can this be used to keep your books?
Thanks Phil
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hopefully George holds all the info otherwise I may be in trouble too ::)
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Something I quickly wrote, to get you going until you seek accountant or inland revenue help.
You do not need to log your own wages, as your business profit is taxed.
Hope this rough draft helps a little Iain.
Lizzy
That's fine Lizzy but a little more detail is required as a minimum. There will need to be a list of individual transactions regarding receiving money from customers. Accountants and/or the IR are not interested in this list normally but it would need to be shown if ever there was a future investigation. Records such as that need to be kept for seven years (6 + the current one). I've still got mine going back to 1991 but I'm a horder. :)
I agree. But surely the accountant will not want to see the breakdown of how each days takings is made up? My accountant doesnt need that info. Iains list of customers, when he cleaned & how much would be acceptable for IR if inspected. Accounts do not need to show that kind of list in such detail.
I scribbled a quick/easy one for Iain, just for him to know a few basics.....until he goes on a course or has help.
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Hey
All the daily money earnt will be in your day book.
The accum money banked minus the amount cleaned from the day book will be the money owed for that week.
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Accountants are not interested in great details, all they need is what you earn and what you spend then they work from those figures.
You will only need detailed information if you are required to prove anything to the IR or if they want to pay you a visit.
I was inspected about ten years ago, when the inspector came he asked for my receipts that made up my expenses, I handed him 2 carrier bags full of receipts and told him they are all in there.
It took him 3 days of sorting out my stuff, when he finished he thanked me for my time and casually mentioned he would not be racing to come back here again to be faced with more carrier bags.
Remember folks, there is NO LEGAL requirement that stipulates HOW you keep your reciepts only that you have them should they ever be required!!
Never seen him since ;o)
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Accountants are not interested in great details, all they need is what you earn and what you spend then they work from those figures.
You will only need detailed information if you are required to prove anything to the IR or if they want to pay you a visit.
I was inspected about ten years ago, when the inspector came he asked for my receipts that made up my expenses, I handed him 2 carrier bags full of receipts and told him they are all in there.
It took him 3 days of sorting out my stuff, when he finished he thanked me for my time and casually mentioned he would not be racing to come back here again to be faced with more carrier bags.
Remember folks, there is NO LEGAL requirement that stipulates HOW you keep your reciepts only that you have them should they ever be required!!
Never seen him since ;o)
He He! same principal worked for me, and I have never seen him since, but still keep them in bags. (Just incase)
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Something I quickly wrote, to get you going until you seek accountant or inland revenue help.
You do not need to log your own wages, as your business profit is taxed.
Hope this rough draft helps a little Iain.
Lizzy
That's fine Lizzy but a little more detail is required as a minimum. There will need to be a list of individual transactions regarding receiving money from customers. Accountants and/or the IR are not interested in this list normally but it would need to be shown if ever there was a future investigation. Records such as that need to be kept for seven years (6 + the current one). I've still got mine going back to 1991 but I'm a horder. :)
I agree. But surely the accountant will not want to see the breakdown of how each days takings is made up? My accountant doesnt need that info. Iains list of customers, when he cleaned & how much would be acceptable for IR if inspected. Accounts do not need to show that kind of list in such detail.
I scribbled a quick/easy one for Iain, just for him to know a few basics.....until he goes on a course or has help.
That's what I wrote Lizzy. The moree detailed list will need to be kept but will only need to be produced if ever there is an enquiry.
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I have my business bank account with Abbey, it was easy to setup and there are no charges involved unless you are bank a huge number of cheques per month. Been using them for nearly two years and had no additional charges at all.
I used an accountant to do my first year of accounts monthly but now only use him to do end of year stuff the rest I can manage on my own.
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Hey
I am with abbey
Great bank also have my reserve account and personal account.
Can not fault them.
It is so helpfull being able to deposit in the hole in the wall 24hrs a day.
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First thing to do is to register with the inland revenue, they will send you a starter pack explaining everything you need to do in simple terms ;D
chris
www.scsf.co.uk
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Why dont you download George www.georgesystems.co.uk this keeps record of all work done money owned colected expenses proft loss etc. aslong as u input every expence keep all the recipts etc you shud be fine then print all your details out it should be all clear. also keep your recipets in order and seprate ie petrol in one say evenliope or what ever u use then say cleaning equipment in another.
just as simple as that really.
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I went to a tax semiar at the local tax explained everything in half a day showed me all the in and outs of self employed and was free. Just ring up and registar
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Hey people!
I have been away for a few days and just got back to see about 20 new posts.
Many thanks! :)
I have downloaded george and backdated all my work a month and now have it all sorted out.
Cheers
Iain
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dont worry mate, all i did was stick every reciept in a plastic folder, they go from april to april then after my 1st year when i got a self assessment(which might as well of been in chinese) gave it all to an accountant with a diary of what id earned & he worked wonders. the more you worry the worse it seems-stick a tenner a week a way from now & youll be sound'
im in my 3rd year now & all correct with above system
also save £2 a week for your stamp
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I have now been going nearly a year and write down daily what i've earned and what i spend but have to say have had good advice from an accountant (customer of mine) who has put me in the right direction
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next year I will be puttinng a third of what I take away in the bank,so at the end of the finanace year, enough tax will be there, enough for self ni stamp and with other costs out should leave me with enough to expand and a day trip somwhere ;D ;D
gaza
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set up a direct debit for your NI contributions.Rather than paying a big tax bill,spend on your business
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Hi again,
Thanks for posts.
I sent my forms (to register) off over 2 weeks ago to the tax & I haven't heard anything back yet?? Is this normal???
I also filled in the direct debit form for my NI contributions and sent it off on the same day.
I keep checking the bank and still no sign of NI being taken out of my account?
Whats wrong with them? Or do the take it out on a monthly basis???
Iain
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Dont worry, they wont forget ;D i think without checking thats its quarterly am i right?
good luck!
chris
www.scsf.co.uk
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Dont forget there are 2 Nat Ins contributions to pay.
One is the standard that I pay with the Inc Tax and is calculated on your turnover and the other is the Self Employed Class 2 Nat Ins which is around £10 a month
JohnL
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Think its the class 2 I will be paying? Well so I was told when I phoned up at first.
Iain