Essentials That You Must Do When You Go Self Employed

Contributed Post

One of the main things that can really be a reason to go self-employed is the ease of which you can start up and then be able to run your business. You can work as a sole-trader, which is just another term for being self-employed, and you can even do that alongside having another job with an employer. So you can take the time to work out your self-employment, rather than having to take the leap to see if the business will work or not and be able to pay your bills.

If going self-employed sounds like something that you want to be doing, then you need to know and understand some of the important issues that you do with being self-employed. So here are a few of those things that you will need to know if you decide to go self-employed. It is so important to get it right and keep things legal.

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Employer Insurance

When you are in business, you are required to have insurance in place, by law. Of course, the insurance cover that you will need will depend on the kind of business that you are working in and what you do. If you employ people as part of your self-employment, then you need to have liability insurance as an employer, and your employers will need to be able to see it all. There are different kinds of insurance depending what you do as well. You may need to public liability insurance if you have a shop or restaurant where the public enter, as well as perhaps insuring yourself if you are a sole-trader.

You should also think about the kind of insurance that you choose, such as traditional insurance or captive insurance. The latter is an alternative to self-insurance, where a parent group creates a licensed insurance company to provide coverage for itself. To keep things legal, though, it may be worth speaking to an 831b attorney just because the taxation and insurance law issues related to captive compliance are complex and they are ever evolving.

Accurate and Up To Date Records

To be a success as someone who is self-employed, then right from the start, you need to make sure that you are keeping clear and accurate records of your transactions and accounts. It will make the tax return easier at the end of the financial year, as well as making sure that you know what you owe and are owed. Many small businesses now look to use online accounting packages as that can be a way to make keeping records simple, so it shouldn’t be something that is overwhelming.

Business Bank Account

As a sole trader, your business income will be taxed alongside personal tax, so as a result, it is really important to keep your business records and finances as separate things. So for that reason, it is such a good idea to open a separate business account for all of your business transactions. Then it is all in one place and you know exactly where you are with things.