BUSINESS
What you need to master
Everybody who is a sole trader must
register as self-employed. That’s unless
they create a limited liability company
which comes with its own additional
regulations that we won’t cover here. The
result of being a sole trader is that you
must complete an annual tax return. You
should typically set-aside 20% of your
earnings for the annual tax bill, or more
to be safe. At the very least you should get
some initial advice from an accountant.
They will usually save you more in tax
savings than their fee, all legally.
If you subcontract for other contractors
in the building trade you need to register
for the Construction Industry Scheme
(CIS). You will normally have 20% CIS
deducted from your invoices. You MUST
keep track of this as it can be offset against
your tax liability at the end of the year.
The same applies to all of your costs. The
paperwork associated with them should be
treated as if it is bank notes – because all
cost invoices will save you on the tax bill.
If you have sales in excess of the annual
VAT threshold, currently £85,000, then
you must register for and charge VAT. You
also must do quarterly VAT returns under
Making Tax Digital (MTD).
Theoretically you should also need to
master the intricacies of GDPR. This is the
regulation about storing other people’s
personal information either on paper or
computer. In practise, though, it is likely
that unless you start doing aggressive
marketing this will not be an issue.
Depending on which trade you operate
in, there are other regulations that you
must follow. The most demanding being
gas and electricity. It is your responsibility
to master and obey these regulations
and some require formal qualifications.
Ignoring them, particularly for gas, can
and does lead to prison terms.
The problem of the nationals
I was recently near Bideford in North
Devon and suffered a flat tyre on the boat
trailer that I was towing. Searching the
internet for “Bideford breakdown”, the
top result is the AA. As it turned out, I
bumped into a local breakdown specialist
and without any waiting, they sorted
the problem out very quickly for £25. If
it wasn’t for my good fortune, I would
have called out a national, and probably
waited several hours plus paid through
the nose.
This illustrates the problem for any local
trade company that get work some from
emergency callouts, like locksmiths. When
people search online, they will often end
up with an expensive and sub-optimal
result.
Taking services from trade-oriented
technology companies may help to tackle
the issue of large rivals using computer
technology to target your prospects and
customers.
Trusted Trader, My Builder,
Rated People and Checkatrade
If you want to grow, there are a number
of companies that purport to help you.
These include Trusted Trader, My Builder,
Rated People and Checkatrade. They may
be particularly useful when you start out.
The problem is that you can’t get business
through them without some existing
reviews, but you can’t get the reviews until
you get some business.
All of them are commercial organisations
and charge for their services. They will
provide you with an online presence
which can help counteract the heavy
advertising of the nationals.
‘There are big advantages,
but there is a price to pay
in effort and responsibility’
In summary
In deciding on whether to take the
plunge to become self-employed, it’s
important to be clear on what you want
to achieve. There are big advantages,
but there is a price to pay in effort and
responsibility too. Many people make a
success of their own business, but there
are also plenty of people who find it
stressful and get their fingers burnt. Key
points are quality of work and charging
enough. All of the best.
Systems
There are now a good selection of apps
and full systems that can help you to run
your business. These, including those
from my company Powered Now, are well
worth investigating as they can save a lot
of time and help guide you down the right
path in terms of invoicing and keeping
records.
About the author
Benjamin Dyer is CEO and co-founder
of Powered Now. Powered Now’s mobile
apps aim to make it easier for installers,
locksmiths and other trades to run their
businesses.
www.powerednow.com
NOV/DEC 2019
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