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• # 118862
• Thu 02 Jul 2020 04:21 PM

Hi,

I have recently received my practice licence and potentially have my first client who seems very keen for me to start.  I'm feeling quite nervous and wondered if someone could reassure me and advise on a couple of questions?

He has only started after the 6th April this year so it's pretty much from scratch.  He asked how much he should be putting by for his tax return?  Can anybody advise on this as he says he doesnt really know how much he will make in the year as its busy in summer but quiet in winter.  He obviously has his personal allowance and his first return won't actually be due till Jan 2022.  Should he wait till the end of the year once he knows how much and then put by although thats only 10 months to pay and i wasn't sure if he might be asked to make a payment on account for the following year straight away?  Or is there a common way to do it monthy such as a percentage of his net profits each month?

He will be giving me receipts etc at the end of the month but he doesnt have a business bank account yet.  He doesnt invoice customers unless they specifically ask as he usually quotes for the job by text.  What records do i need to know the price of his sales?  He will give me receipts so i know his expenses but how will i know his sales?  I've never had a bag of receipts experience to know what to do.

Any help would be much appreciated.

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• # 118868
• Fri 03 Jul 2020 11:09 AM

Hi Tracey,

Congratulations on securing your first client.  It is a nerve-wracking time but exciting too!  

He could put 20% of his sales receipts away as that will help to cover his tax bill and, depending if he has Class 4 NI to pay, he could have a surplus when his personal allowance is taken into account. It's a good habit to get into from the start so I would encourage him to put something away. 

Definitely advise him to open a business bank account, it's much easier for you both to track income and expenses that way. If he's not VAT registered then invoices aren't essential but again they make it easier to track income and are useful for ensuring his customers have all paid. Could you offer to raise the invoices from his quotes as an extra service? 

I hope that helps a little and good luck with your new practice.

Jackie 

• Jackie F

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• # 118869
• Fri 03 Jul 2020 11:48 AM

Jackie F said:

“

Hi Tracey,

Congratulations on securing your first client.  It is a nerve-wracking time but exciting too!  

He could put 20% of his sales receipts away as that will help to cover his tax bill and, depending if he has Class 4 NI to pay, he could have a surplus when his personal allowance is taken into account. It's a good habit to get into from the start so I would encourage him to put something away. 

Definitely advise him to open a business bank account, it's much easier for you both to track income and expenses that way. If he's not VAT registered then invoices aren't essential but again they make it easier to track income and are useful for ensuring his customers have all paid. Could you offer to raise the invoices from his quotes as an extra service? 

I hope that helps a little and good luck with your new practice.

Jackie 

”

 Hi Jackie

Thank you very much for taking the time to reply and for your kind reassurance and advice.  This has helped lots and i will definately advise him to start putting something away and to open a business bank account.  He metioned both to me so hopefully he will be easy to encourage to actually do it.

Thanks 

Tracy 

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• # 118870
• Fri 03 Jul 2020 03:38 PM

Hi Tracy

If he is quoting by text, then you might want him to take a look at something like Quickbooks Self Employed - it will allow him to quote from his phone add the money when it is received and send invoices if someone wants one.  Plus it will link to his business account. He or you can code all the transactions immediately from his bank to the relevant lines on the tax return, so that when the year end comes your job will be much easier.

I am sure there is other software that will do the same (as I know there are those on here who will groan to see me recommending Quickbooks), but I do think this works well for the small sole trader.

Congratulations on getting your first client , and best of luck in your new venture.

Sylvia

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• # 118876
• Mon 06 Jul 2020 04:12 PM

Another42 said:

“

Hi Tracy

If he is quoting by text, then you might want him to take a look at something like Quickbooks Self Employed - it will allow him to quote from his phone add the money when it is received and send invoices if someone wants one.  Plus it will link to his business account. He or you can code all the transactions immediately from his bank to the relevant lines on the tax return, so that when the year end comes your job will be much easier.

I am sure there is other software that will do the same (as I know there are those on here who will groan to see me recommending Quickbooks), but I do think this works well for the small sole trader.

Congratulations on getting your first client , and best of luck in your new venture.

Sylvia

”

 Hi Sylvia,

Thank you very much for this, i will definately take a look 

Tracy

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