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Self-employed Courier Drivers: How Accountants can help
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The current Covid-19 pandemic has boosted online sales in the UK even further, with eCommerce sales growing by a massive 168% during the crisis, according to statistics published by Internet Retailing. The main increases have been sales of electronic items, home furnishings, DIY goods and sportswear.
With Black Friday approaching on 27th November, followed by Cyber Monday on 30th November, polls show 73% of people plan to shop online this year. The Black Friday weekend in 2019 saw UK consumers spend a total of £8.57 billion, so courier drivers can expect to be exceptionally busy during and after the 2020 event.
All things considered, choosing to be a self-employed courier driver as a career option offers a wealth of benefits, including the prime one: independence. It's also a sector where it's cheap to run your business and also relatively easy, as you don't need to worry about buying in stock.
You get to keep all your profits and there's a continual need for delivery drivers. You're free to choose the clients you want to work for - how hard you work will determine how many clients and how much money you'll get.
However, being a self-employed courier driver also has its challenges - mainly the responsibility of being in charge of paying tax and keeping your financial records up-to-date. This can seem daunting to the beginner and many courier drivers choose to employ the services of a professional accountant to take the strain.
An accountant will prepare your annual financial records for HMRC. A demanding job in itself, you must use and keep hold of the evidence of your earnings including receipts, invoices, bank statements and more.
Collecting the evidence and keeping track of your finances is crucial as a self-employed courier driver as HMRC can investigate your accounts. Should they choose to do so, a professional accountant will do all this for you, as well as providing bookkeeping and company accounting services.
How can an accountant help?
An accountant will make sure your businesses as a self-employed courier driver adheres to the law, including the requirements of the government's latest Making Tax Digital initiative. Companies will have to keep their business records digitally and submit their quarterly electronic accounts (known as MTD returns) in the same way.
In order to help your courier business operate smoothly, the accountant can also provide general tax advice, while keeping your records up to date each month, so you can make informed decisions, as a business owner, depending on your finances at any given time.
Can an accountant save you money?
The benefits of having an accountant are obvious but some self-employed people think it may be expensive to hire their services, opting for DIY accounting instead. You may find this is a false economy, as failing to fulfil your obligations to HMRC can lead to a hefty fine.
You’ll get a penalty if you miss the deadline for submitting your tax returns, or paying your bill. If your tax return is up to three months late, the penalty will be £100. The later it is, the bigger the fine. You will also receive a £100 penalty for late payment of your bill and this will continue to rise if you keep failing to pay.
You will be charged interest on late payments, so if you keep missing deadlines because you're too busy to do the paperwork, or because you don't understand what you're doing and keep putting it off, you'll soon find yourself owing HMRC a lot of money.
Don't fall foul of the tax office if you're trying to get your self-employed courier driver business up-and-running - contact DL Accounts to find out more about our professional accounting services and our tailored specialised solution for courier drivers. We can help you on your road to success!