Blogging is not only a fun, part-time activity; it can also be a way to make a healthy amount of extra cash on the side. It could even become a full-time, profitable business and launch you into the world of professional bloggers.
When you start a blog for fun, maybe as a family diary or to share a hobby or something you’re passionate about, you don’t really think of it as a business. But here’s the thing: as soon as you make just one sale, or even show the intention to make a sale by offering goods or services, you’re in business and need to start keeping business accounts.
The areas where bloggers make money include offers of sponsored posts, revenue from affiliate sales, doing reviews or receiving invitations to professional events. Blogging as a business brings some legal requirements along with it, so here are some things you need to be aware of:
Registering as Self Employed
This applies even if you have a day job. You register as self-employed through the HMRC website, and they make this quite straightforward. At the same time, you’ll register for Class 2 National Insurance, receive your Unique Taxpayer Reference (UTR) and set up passwords and codes so you can access your online account.
It’s important to keep all these records safe, as you’ll need them to log in and submit your tax return when the time comes. If it’s the first time you’re registering as self-employed, you’ll receive a letter in the post with an activation code that you’ll need the first time you log in to your account. You can also register by post, but online is quicker.
From now on you are registered for self-assessment, so you need to keep accurate and up-to-date books in order to fill in your tax return.
Keep it as simple as possible. You don’t, for instance, need complicated and extensive software designed for large companies with big payrolls etc. You just need an efficient way of recording your own business income and expense.
You could use a spreadsheet, a notebook or online accounting services. You could also hire a bookkeeper to run things for you on a daily, weekly or monthly basis. Bookkeepers are flexible in the amount of time you can hire them for, and have the big advantage of understanding what accountants need. You will be sure your books meet all the legal requirements, and are always up to date.
At the end of the tax year, you’ll need to file a tax return, and if accounting is new to you, it can seem daunting not least because it’s a legal document with penalties if you get it wrong. An accountant can save more than he or she costs, as well as taking on the responsibility of properly calculating your tax bill and your allowances against tax.
Bank Accounts and Receipts
Always have a separate bank account for business purposes. When your blog takes off and transactions become more frequent, a dedicated bank account makes your financial affairs much more transparent. Wading through pages of personal transactions to find business ones in your personal account wastes time.
Also, if you use professional services, do you really want to share your personal spending habits with them? Keep your business accounts professional with a business bank account. They’re usually free at least for the first year.
Hold onto every single receipt you get for business expenses. Even small spends mount up over a year. Start a new folder each month to keep receipts in, or scan them and make digital copies if you’re striving for a more paperless office. HMRC will accept many forms of digital file, but always check as there are some legal documents you need in their original paper form.
It can seem a lot when you’re just starting out, but by taking things step by step it all soon falls into place. Whether you do it all yourself or hire professional bookkeeping help is a personal choice. But when your blog grows into more than an occasional hobby, bookkeeping tasks are no longer a choice, they’re a legal requirement.
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