I am close to completing AAt level 2. I have no job experience relative to bookkeeping so nobody will employ me. I want to go it alone as a self employed bookkeeper because I have the knowledge but I don't know where to start! If I managed to create some interest in my local area and a potential client arranged to meet me what would I say to ensure that I presented myself professionally?
1) Which services can I provide and which services will I need to hand to a financial accountant?
2) If I am working for a very small business or a sole trader they would not be able to give me sustainable work for 40 hours per week. How often am I to visit my client(s) and what is the going rate to charge for services such as maintaining sales/purchase ledgers reconciling bank statements etc?
3) Presumably I need to talk my clients into purchasing Sage so that I can computerise their records
4) I do not know any accountants. How do I approach them and will they charge me for assisting my clients? How often would small businesses make payments to HMRC and is that something I could do or is that an accountants job?
5) I will need to keep my full-time job while building a practice. What do I do about declaring any bookkeeping earnings?
6) Do I need a website? Do you have any recommended web designers?
7) What else do I need to do?
Please give as much detailed advice as you can. Imagine that I work for you and you are talking me through everything. Do not worry about condescending to me, I will appreciate any assistance. I am excited about the next few months and I know that once I am up and running I will look back and wonder why I was so nervous.
An AAT student member can set up in practice so long as AAT is not mention, and abide by AAT's Code of Professional Ethics which includes that one must only carry out work to their competence. Other than that, there is no restriction to what service you may offer other than those that are restricted by law. AAT does not supervise student for Money Laundering Regulations purpose, so you'd have to register with HMRC. AAT (and common sense) strongly advise you to take out professional indemnity insurance. You would be required to notify the Information Commissioner's Office as a data controller. Since you will be doing self employed work, you would also need to register with HMRC as self employed, and pay Class 2 and Class 4 national insurance contributions on top of any Class 1 NIC you would be paying through PAYE as an employee. A personal tax return will need to be filed annually with HMRC for the purpose of income tax & Class 4 NIC. If you have the knowledge and wants to act as agent for a client with HMRC, you would need to register as such. Whether you need a website is up to you as a business decision.
I'll leave the specific questions to those that are or has actually been self employed to answer. :)
Good advise, but - you can get exemption from paying class 2 NIC if your income from being self employed will be under about £5k (I think). Have a look on HMRC for more info.
Your client doesn't need to purchase Sage, there is nothing saying you have to computerise the records, my Dad has been an Accountant for 35 years and he has never used Sage/Quickbooks or any other software, he uses excel and before that he used paper and a pen :)
As for approaching Accountants, really the only way is to write/email/call them, and consider attending some networking events in your area, search for your local chamber of commerce, and register on twitter and follow some local firms.
As said, you'll need to register as self employed with HMRC, it's really easy online and your get confirmation in about 2 weeks.
You don't need a website particularly, but I would recommend twitter/facebook and perhaps a blog, you can create a good website using wordpress.com.
What you charge is up to you, have a look at competitors in your area, do a bit of research as to what they are charging and price your services accordingly.
Oh, and according to HMRC website, AAT does supervise for MLR, so it may be worth asking them.
Ed, AAT does certainly supervise for MLR, but only for its full members who (are required to) register as in practice. They do not supervise their students.
I'm not sure what services AAT allow you to carry out, but my advice would be to not take any work on that your not confident with, regardless of whether you're qualified to deliver it.
Personally, most of my clients are small businesses, photographers, retailers, tradesmen etc. I tend to find I spend 2-3 hours a month on each sometimes less, sometimes (if they are going through a change like registering for VAT etc) I spend a bit longer with them. I generally physically see them at least once every month or two. I charge a fixed fee for all my work, if you are trying to get a going rate why not call a few bookkeepers. It's a bit cheeky, but pretend you're a plumber or something looking for their services.
Regarding point 3, I would avoid 'talking your clients into' purchasing any software unless it's the best for their needs. Personally I have a number of packages I purchased and will use for my clients depending on their needs, although more an more of my clients are having their accounts done on VT Transaction+ now because its a reasonable cost and suits their needs.
I don't work at all with any accountants any longer. Regarding payments to HMRC it really depends whether they are VAT registered, have employees etc.
If you keep your job you need to register as self employed too and complete a tax return. The biggest confusion with this, in my opinion, is that people think they will be taxed twice on employment income, this is not the case.
Whether or not you need a website is a matter of opinion, I think you do. But I also think it needs to offer something rather than just telling people how wonderful you are.
Ed, AAT does certainly supervise for MLR, but only for its full members who (are required to) register as in practice. They do not supervise their students.
