If you work as a self-employed painter and decorator, you will be familiar with the hassle of managing your finances and accounts. This blog reveals some of our top accounting tips and what to look for when choosing an accountant for your business.
If you are starting out
Starting as a freelance painter or decorator is a great way of using your skills to make a living whilst remaining flexible with your hours. Being able to choose when and what projects you work on has many benefits, but it also comes with the stress of managing your own finances.
When starting, consider the pros and cons of being self-employed compared to working for or with someone else. HMRC will require you to register as self-employed if you previously worked in an employed position, which can be done online or over the phone.
One of our most important accounting for decorators and painters tips is to keep tabs on everything you have bought or spent, whether this is equipment or a website and marketing. This is especially crucial to remember just as you are starting out. It will prove critical later on when you may need to prove your outgoings, create a tax return at the end of the year, or claim on expenses.
Consider your costs
We would always recommend sole traders set up a new business account that is separate from your personal account. This means that all of the transactions you need to keep a record of for submitting your self-assessment tax return are in one place and not confused with anything else that is not related to your business.
Ensuring a steady flow of customers and business is a pressure that many self-employed painters and decorators feel. To make sure that your services are being seen and used, you may want to consider investing a chunk of your income into advertising and marketing, including the creation of a website. An accountant can advise you on how much to invest in this.
Tax advice for painters and decorators
As a self-employed painter and decorator, you will be responsible for submitting a yearly tax return. This means that you will have to be especially organised when recording your expenses and income as it will determine how much tax you owe. Fines are issued for those who fail to submit by the deadline of January the 31st or fail to pay what they owe. To prevent the potentially costly consequences of this, it is always best to seek advice from an accountant.
When you are self-employed, you must pay income tax, class 2 national insurance, and class 4 national insurance. The easiest way to work to reduce your tax bill is by claiming expenses. Some tax-deductible expenses that painters and decorators can claim include protective equipment, mileage, training, and tools. However, there are also plenty of things that you can’t claim for. Make sure that you check what you and cannot claim with an accountant.
Stay on top of your bookkeeping
Staying on top of your bookkeeping is crucial to a successful business. It can even help to reduce your tax bill. Make sure to keep all invoices and receipts of expenses that you want to claim. Without this, you may not be able to get any money back or a reduced tax bill.
Make sure that you have reliable accounting software that makes it easier for you to record your expenses and do your bookkeeping. If you are finding that you are spending more time trying to work out how to input your data into the software than you are working, it may be time to consider moving accounting software. At Steele Financial we work with Xero and our clients love it! It is intuitive and easy to use and even has an app where you can live upload your receipts.
Save time on financial admin with Steele Financial
Even if you are good with finances, most self-employed workers will find that paying for an accountant is crucial for maintaining a successful business. Not only does it take the stress away of potentially making a mistake with the numbers, but it leaves you with more time to do what you love and add more customers to your books.
If your business starts to grow and you need to hire staff, take on different types of projects, and invest in equipment to keep up with this expansion, an accountant can help. With our expert knowledge, the team at Steele Financial can assess your options, including whether it would be beneficial to become a Limited company.
At Steele Financial our highly experienced accountants for painters and decorators are ready to help you and your business. Get in touch.