With the credit crunch still raw in people’s memories and its shadow still hanging over interest rates and household budgets, more people than ever before are earning money in their spare time. This might involve taking on extra work of the same kind you do in your day job, but on a freelance basis. Alternatively, it might be something completely different like a small online selling operation. For many people, this raises one particular question. Is it worth tracking down a cheap accounting service to handle the financial aspects of this side business, or is it not worth it for a bit of small-time secondary work?
The Legal Position
One important thing to remember is that any work you do outside of employment counts as a business in the eyes of the law. It doesn’t matter whether you are just running a small-time operation in your free time for some extra pocket money. If you are working alongside a full time job, tax and national insurance will almost certainly be due on your earnings. Even if it weren’t, HMRC would not be able to know this if the figures were not reported. As such, it may well be worth seeking out cheap accounting services as a cost-effective way to ensure your business is compliant and nothing is wrongly declared. At the very least, if you are in doubt about your ability to properly fill out a personal tax return you may wish to seek professional help.
Type of Business
Some people believe that the status of the legal status of their second income stream is affected by the type of work done. A common example of this is eBay selling. Some people do not believe they need an eBay accountant or that their activity counts as a business because eBay is commonly used for personal activities such as selling unwanted possessions. This is true if you are just selling items you no longer need in order to turn them into cash. However, if you are using eBay as a platform for profitable trading, whether by selling brand new items or buying up a steady stream of second hand objects expressly to sell them for a profit, this qualifies as a business. As such, you may want to seek out cheap accounting services to ensure your accounts are handled properly, perhaps from a specialist eBay accountant.
The final factor to consider is the final amount of profit you are making. If you make very little, even cheap accounting services might seriously eat into your profits. At the very least, you might want to seek out eBay accountants or other providers of cheap accounting services to complete your tax return and ensure that everything is compliant. When your income is sufficient, however, further accounting services can be a worthwhile investment. They will ensure your operations are tax-efficient and will free up time to focus on maximising income.