Little Earner » Saving Money

Work From Home? Run a Small Business? Welcome to the Tax Nightmare

Dan — Wed, 16 Nov 2011 10:15:30 +0000

Here’s one of the more practical posts that I’ve decided to do, but it’s about important as it can get. This is because if you get your tax returns wrong, then you can be in serious trouble and facing either fines or imprisonment – sometimes even both.

And it gets worse, the HMRC have recently announced a tax avoidance clampdown, focussing particularly on small businesses and the self-employed. This means that the tax return forms you supply as a work-from-homer will be scrutinised even more, which makes it even more important for you to keep accurate records of what you buy and sell.This, however, will not only help you assess your tax liabilities, it will also help you see what makes a profit and what makes a loss.

So, here are some handy tips to help you avoid a telling off from the tax man:

Make a profit-loss spreadsheet. Record how much you put into the business and how much you get back. Make sure that you break it down into individual revenue streams so that it makes it easier for you to see what makes the profit and what makes the loss. Save the spreadsheet monthly or weekly and then start a fresh one. This helps you to compare spend/revenue over a set period of time and can help you to make even more money!

E.g. of profit/loss sheet:

Money Spent: Sales: Revenue: Profit:

Campaign 1 £25 8 £50 £25

There are ways to make a more complex spread sheet, so check out some useful guides on Microsoft Excel or Apple Numbers to see how to input sums, etc. so you can make it easier to take statistics.

Keep your receipts and print off receipts! Sounds simple, but everything spent on the business MUST have a receipt and it must be filed, otherwise you won’t be able to claim it as a tax-free business expense. Whenever you pay for an advertising campaign or buy a product to sell, print off the invoice and file it, otherwise all the revenue generated from that sale will be treated as profit by the taxman! You only pay tax on profits, so this is so important to do. Just to illustrate the difference this can make: if you spend £1,000 on a campaign/product and then make £2000 from the sale of that product or that campaign and you haven’t kept the receipt or invoice, then you’ll pay tax on the £2,000. If you have filed the receipt, then you should only pay tax on £1,000 of that revenue.
Another simple one: fill out your tax returns on time! Not filling in your tax returns on time can incur needless penalties and fines. If you’re uncomfortable with filling in your own returns, then it’s worth seeing about hiring an accountant. Providing you keep accurate records an accountant shouldn’t be too expensive.

Hopefully that helps!

Cheers,

Dan Little

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Christmas: Turkey Shoot or All Time Low?

Dan — Mon, 14 Nov 2011 11:12:40 +0000

The Turkey Shoot: an unbelievably easy task, with the odds overwhelmingly in favour of the person doing the (metaphorical) shooting. At Christmas, the vast majority of people equate the festive season with over-indulgence and inflated profits. They therefore become a little more reckless with spend in the hope that the returns will be huge.

Be careful, though, because it seems that this isn’t always the case. First, not all products sell well at christmas; if your business is online and selling services or products like make money programs, you’re more likely to see a dip in sales than a rise. This is because people spend more money on presents and consumables at this time of year, so the money otherwise spent on themselves will be spent on toys, food and drink.

Secondly, and perhaps more importantly, small businesses often experience cash-flow troubles over christmas time. This is because recent surveys suggest that the Christmas period sees more financial stafff taking holidays, which means that invoices and bills are less likely to be paid. This has a domino effect across a variety of businesses: if someone fails to pay you, you may not have the money to cover your own costs. This can mean big trouble for you, as you may have to resort to costly alternatives; such as credit and debt.

It is, therefore, imperative that you begin preparing for the Christmas period now by ensuring there are enough funds in your account to cover any invoice deficits. If this means taking a small personal paycut for the season, then so be it, because it will help you save money in the long-term. Also, make sure that you receive some sort of advance for services you’re going to render. This is difficult for affiliate marketers to do, but other work-from-homers can achieve this. So, where possible, require part-payment over the Christmas period before you start work.

That said, stay positive about the real prospect of huge profits over the festive season if you can really nail the right products! Do some research and take advantage of the consumerism! We all know that Christmas can be a bona-fide turkey shoot, so take advantage of all the Christmas spirit and make some proper dough!

Sincerely,

Dan Little

Loans and Your Business: Don’t Bite Off More Than You can Chew.

Dan — Thu, 10 Nov 2011 10:11:12 +0000

You’ve probably heard the recent news of Italy’s debt cost hitting a record high of 7%. This means that Italy has to spend a total of 7% of its GDP (That’s the value of all goods and services produced within a country, which can be thought of as the income of a country) just to keep up with the interest payments on its debt. This is incredibly hard to do when you have an entire country to keep on top of. You’d think that someone, somewhere would have put the brakes on debt acquisition by saying: ‘hold ona a momenta, we besta holda our horses!’ (My best attempt at writing in an Italian accent).

But the truth is that without debt many countries can’t finance expansion, and without expansion they can’t grow – an axiomatic truth if there ever was one. But when expansion doesn’t go quite as planned, the country is left with a debt that it can’t repay. Poor governance and even poorer financial planning cause economies to crumble, but the lessons learned from such poor conduct don’t only apply to countries. Individuals should avoid the same mistakes, though admittedly on a smaller scale.

Small businesses and work-from-homers (or WOFROHS) are just as likely to make the same mistakes that countries make when it comes to getting in debt. They invest unwisely in unnecessary luxuries, rather than in things that are conducive to growth. They also fail to properly account for spend of the loan, and don’t think about the consequences of taking out a loan thoroughly before doing so. People often fail to then properly take control of spiralling debt, lacking the discipline to resist overspending.

Some even take out a loan to pay off a loan, something which is never, ever a good idea. All it does is compound the problem and increase interest. What you should do, if you find yourself in debt, is impose strict restrictions on your spend, cut your salary and get yourself out of the debt.

This is, of course, easier said than done. But then getting out of debt is never easy, and it only gets harder the deeper you get. Working for yourself can be as easy as you make it, so don’t make it hard for yourself and keep on top of your debt.

Key to keeping on top of your debt is knowing when to take out a loan. This is because loans can be incredibly useful if you’re dead certain that expansion is going to bring high profits to your business. Even if it’s not dead certain, it might still be worth the risk, but that’s for you to decide upon a thorough examination of all the relevant facts. These relevant facts include, but are not limited to:

1) Ability to pay off loan if plan doesn’t work

2) Likelihood of expansion working

3) The costs of expansion

4) The projected profits from expansion

5) Current profits

6) Projected profits without expansion.

If you analyse these facts before you take out the loan, you may find out that your projected profits without the loan may be higher than with the loan. You may also find that the interest on the loan means that you only make a marginal profit from expansion. If that’s the case, it is also worth thinking long-term, to a time when you’ve paid off the loan and you no longer have to pay interest.

In conclusion, a loan can either be a great boost to your business or the concrete around your feet as you’re trying to swim. It’s up to you to determine whether it’s an aid or a detriment!

Hope this article helps. Once again, if you have any debt stories or helpful advice for others please sign up to Little Earner and leave comments below!

Sincerely,

Dan Little

How To Earn Money Without Spending Money

Dan — Wed, 10 Sep 2008 13:13:04 +0000

One of the problems people often face when they want to learn how to earn money is that they feel they need to spend money to get it. For example, some will say you must purchase a report packed with information on how you can earn money. Games, surveys, work from home jobs and a number of other information pieces are out there, all providing you with the same information: how to earn money from home.

The good news is that you do not have to pay to get this information. You can learn how to earn money from free information, research and from others who are already doing what you are. Here are some ways to learn how to earn money without having to pay to do so.

Earn money from games, surveys and pay per click websites by simply signing up with the companies. You should not have to pay to do surveys, either. Rather, you just need to sign up with as many companies as possible and you will get invitations to opportunities.
Earn money by playing games from home. Like any game, you will need to have some skill and luck to win. Yet, one of the best bets about these games is that you just need to keep playing to increase your chances. The more you play, the more you increase your opportunities to make money.
Earn money by joining programs like pay per click websites, where all you need to do is click on links to earn a small commission. It takes time to build up a large amount of money, but you can do it!

You can earn money. Games and other methods are available to most people. The only important steps you need to make are finding the companies to work with, signing up with them and then answering their emails or following the tasks they provide you. That is all it takes for success.

Earn Extra Money From Home: Avoiding Scams

Dan — Tue, 26 Aug 2008 14:42:44 +0000

To earn extra money from the comfort of your home, you will need to know what opportunities are available and which are likely to be scams. Unfortunately, the web is full of opportunities to earn money, home based businesses and other opportunities that are simply not likely to make you any money at all. That is not to say that everything you come across will be like this. The fact is, most businesses and work at home opportunities can work, and work well.

In order to earn extra money, learn how to spot some of the scams that will keep you from making money.

To earn money, home based businesses may require that you spend some money to get started. This is not a job, but a business and is acceptable. Before you spend money, though, be sure you know the history of the company and its success rate.
Do some research to find out about the business or opportunity from others that have done it in the past? What worked and what did not work for them?
Earn extra money for your needs by avoiding business opportunities that are simply overdone. Some opportunities are so prolific online that finding interested individuals are difficult. Ask representatives and company officials to tell you more about the current success of the company.

Scams are out there, but through some basic research you will learn if any earn money from home business is authentic. It is wise to avoid those companies or ads that promise you will make large amounts of money, especially if they promise this will happen your first week. Any business will take time to grow and flourish. Scams can often be spotted as being opportunities that seem just too good to be true. If they sound like something you will enjoy, and something you would invest in, they are more than likely genuine opportunities.

Making money by finding it!

Dan — Thu, 30 Aug 2007 15:19:04 +0000

This might seem like a really silly idea for some people who are quite proud… however, picking up money you find at the side of the road or on pavements really adds up.

I often find the odd few pennies in the gym changing room or at the side of the road. I’ve only recently started doing this, and you can see my progress on My Earnings page. I know some people have found £20 ($40) just lying in the road too.

As they say, if you look after the pennies, the pounds look after you!

Saving Money on Amazon

Dan — Wed, 07 Mar 2007 13:09:27 +0000

One of the best ways to make money is to save it in the first place! Here are some create tips for saving money on Amazon.com:

Don’t assume everything is eligible for free over £15 delivery. Some items are shipped by 3rd party sellers.
Remember you pay VAT on the delivery charge. The price quoted is ex. VAT.
Get free delivery even for just under £15.
If the price drops claim the cash back.