Entrepreneur Simon Dolan is the voice of the single-person company, having started SJD Accountancy aged 23 from his bedroom.
SJD is now the UK’s fastest growing and largest accountancy firm for the self-employed market, providing accountancy services to over 10,000 clients.
An unbelievable amount of money is thrown away every year by home workers, simply because they’re not running their finances efficiently. Below, Simon has outlined the top five most common errors that at best cost you and your business money, and at worst can cause your company to crash and burn.
- Go limited – If you’re using an umbrella company, switching to working through your own limited company could save you tax and give you a higher take-home amount from your contract.
- Separate bank accounts – don’t leave your business current bank account with a huge balance. Instead, move it over to a high interest savings account. There are still a few banks who are interested in providing savers with good rates of return, albeit lower than in ‘the boom years’, but every little helps.
- Know your targets – if you need to advertise due to not having a shop front, consider very carefully where you advertise and how much money it costs to reach each one of your prospects.
- Pensions – Speak to an IFA/pensions advisor about setting up a pension from your company. This way the company gets tax relief and it uses up some of the remaining funds in the company account in a tax efficient way.
- Do you have tax planning in place? Would it be better to leave money in your company this year and take a lower salary? Managing your own accounts may save a little but you may also miss valuable tax saving ideas.