Finance side of business

[Esh]

Hello again!

I'm going to register as self-employed soon-ish and am aware that I'll need to fill out an annual self assessment form for tax...I'm still slightly confused though, about how much I should put away for tax? I'd need to take a bit of money from any income to pay general day-to-day costs/bills, so can I take this from money earned? Or, how much in % terms would I need to put aside out of my earnings? Also, I know I'll need to pay national insurance (£2.30pwk or something similar I think?). Sorry if this makes no sense what so ever, I'm still trying to get my head around it a little bit! :icon_dunno:

One more question!...is any kind of insurance essential, like professional indemnity, or do I need not bother with all that?

Thanks in advacne!

[djb]

Well you can work out your profits, deduct your expenses and cost of sales (print costs for jobs etc.) from that and take 28% off whatever’s left, stick it in a high interest account and keep it for the tax man. This should cover your tax and Class 4 NI (I think it’s class 4, class 2 being the stuff you pay weekly, class 4 being the stuff which is dependent on the amount of profit you make).*

*This may be wrong, but hopefully not as it’s what I’m doing!

As for insurance, I don’t have it but that’s because I don’t really know whether I should. I’ll wait for someone else to comment and take their advice too.

[Corrosive]

As for insurance, I don’t have it but that’s because I don’t really know whether I should. I’ll wait for someone else to comment and take their advice too.

As far as I am aware you don't have to have business insurance. If the risk of a high payout claim against you is high then get it. Figure out how much a bad mistake on your part could cost and then get a quote.

If you employ others you need employers liability insurance or operate in public spaces then you should get public liability.

Best to get advice form a reputable broker and see what they recommend but listen to what they say as they may try and over insure you. Just get what you need.

[Simply_Business]

Hello Esh, Djb and Corrosive,

I work for a business insurance broker and thought I would give you some guidance on where you stand regarding public liability and professional indemnity insurance.

Bearing in mind the kind of work you do - graphic design is a very low public liability risk (insurance is all based on risk) Public liability basically protects you if you cause any physical damage during the course of your work. Potentially (but very unlikely) you visit a clients site for a meeting - put your bag down and someone trips over it and breaks their leg and tries to sue you.

Professional indemnity insurance with Simply Business covers you for "errors, omissions and neglect with regards to advice, designs or plans that you put forward that lead to a financial loss or injury on your clients part" This is the main kind of cover that is provided to graphic designers and website designers.

As per Corrosives post it's always good to consider the value of the contracts you are working on and what a worst case scenario would cost you and your business. Use this as a rough guideline of the levels of cover that you have - not about whether you have the cover at all because it only takes one freak occurrence for a substantial claim to land at your door. You will also find more and more clients asking for at least basic levels of business insurance to be in place as part of the basis of being offered the contract.

If you have any queries or questions regarding business insurance please feel free to contact me via Online customer support

Kind Regards

Tim

[Dave L]

I organise my business insurance through Simply Business - all the cover I'm ever likely to need and more (and dead easy to set up) for about £180.00 p.a.