Electric Train(er)

Paying less tax

One of the parts of my business skills workshops that people enjoy the most is a simple exercise called 'match the expense to the tax return'.

OK - so it's not exactly a catchy title for a game, but it's more fun than it sounds.

This financial year the tax people (HMRC) have changed a few of the guidelines for small businesses, and even some quite hardened freelances are apparently unaware of the changes.

The good news is that there is a £50K allowance for small businesses to cover capital equipment this year. That's different from previous years, where you've only been able to put 50% of the cost of a capital item down against tax.

That makes this rather a good year to buy kit, presuming you have any cash at all what with the credit crisis.

In fact that's such good news I hereby predict that the rules will change again within a year or so. Let's see.

HMRC have also clarified some of the allowances if you use your home for part of your business. Everyone knows about heating and lighting (percentage of), but there are some extras.

Read the updated guidance here - and make sure you bring it up with your accountant!

Top tip 2 - We all hate filing

One of the reason people hate filing so much is that they'd rather be doing something more exciting.  Unfortunately if you run your own business and have an office at home you can't avoid it.

The trick is to make the filing so easy that you can't put it off. Don't use filing cabinets for the stuff you need to deal with every day. A filing system that relies on unlocking filing cabinets is doomed to fail; all you will do is put the stuff in a pile on any clear surface - and leave it there.

So have a little shelf within arm's reach and keep things like invoices, receipts and current project files nice and handy.

Another good tip is to touch any piece of paper only once. Never put it in an 'in tray' to deal with later. Just put it straight away in the place that it belongs. If you're not sure where it belongs it probably needs to go in the shredder.

Any more filing tips? I'd love to hear them.

Top tip 1 - The unwanted visitor

One of the thing I love about the small business training is meeting so many people with great stories to tell.

I'll be repeating many of them here, and passing on some great tips for smoothing out the bumps of self-employment.

Here's one which was passed on by someone who'd started her new business at home after working for many years at the BBC.

She was re-adjusting nicely to being self-employed, but one thing was getting to her; her friends would see her car in the drive and assumed that she was always in for coffee.

Being a well-brought up kind of person, she found it impossible to tell her friends to get lost. They'd be in the kitchen boiling a kettle before she had a chance to explain that she was in the middle of some work. So how to diffuse the situation?

She decided to leave a file full of old papers next to the front door. Whenever the doorbell rang she'd come to the door, pick up the file and cradle it in a business-like fashion in her left arm. When she opened the door the friend would see the file and say "Oh, sorry. I see you're working now. I just wanted a coffee and a chat. So when would you like to meet?"

She reports that it works every time. She doesn't see her friends any less, but she sees them at a time convenient to her. Briliant.

Got any other tips for home working? I'd love to hear from you.