Overheads.

[Mark Wileman]

Hi guys, I'm just weighing up the pros and cons of going self employed or PAYE. Will be working as a climber owning all my own saws, vehicle and PPE, no big overheads such as chipper/van finance.

 

Firstly I'm making a spreadsheet of my total anticipated overheads, we'll leave actual values out of this as there is too much variation across the country and people don't like talking money sometimes

 

The plan is to tally up all my overheads, take out the weekends, bank holidays and a couple of me time days and work out exactly how much I need to be charging for a day rate.

 

Here is what I have so far:

 

Salary (I've shot low, just enough to scrape by as any profit will be mine anyway:001_rolleyes:)

Personal Liability Insurance

Vehicle Insurance

Arb Association Membership

Equipment Maintenance

Equipment Replacement

LOLLER inspections

CPD

Fuel (hard to work out, averaged on a 30 mile round trip per working day for now)

 

Anything else you guys would add to list?

 

Thanks in advance!

[Mark Wileman]

Also, at what point do a I factor in tax? Just whack 20% on top of what I work out as my daily rate?

[aspenarb]

Accountancy , pension plan and advertising.

 

Bob

[JLA Arborists]

Work out for 45 weeks (225) days. That'll give you a few weeks for holiday and no work or down time (weather / illness)

If you work into that spare 7 weeks or weekends it's a bonus.

[Mick Dempsey]

I admire your thoroughness but I believe you're overthinking it.

 

Do you really want to work for yourself? If the answer is yes then away you go...

[benedmonds]

I admire your thoroughness but I believe you're overthinking it.

 

Do you really want to work for yourself? If the answer is yes then away you go...

 

I disagree, if more folk looked at the realities of what it cost to run a business they might find that actually they are better off as employees. If you worked the hourly rate for many business owners you might find they are not doing great.

 

If however you still decide that you do want to be self employed (there are more then just financial benefits), working out the costs will enable you to price jobs in a realistic manner.

[Mark Wileman]

I admire your thoroughness but I believe you're overthinking it.

 

Do you really want to work for yourself? If the answer is yes then away you go...

 

The main reason for doing this is as BenEdmonds says, this puts a figure in my head that I need to make in order to cover the costs of my personal bills and business stuff.

 

I'm sure that I do want to work for myself, but if I can't make the figures add up compared to my local day rate then it will be a pretty bad financial decision.

 

Tax is the only thing confusing me, most of these overheads will be offset against my tax returns (minus the salary) so there is no need to add VAT to my day rate?

 

A note, this isn't the figure I'll be charging necessarily, just gives me an idea of what will be profit and what will just go back into the business/mortgage!

[Steve Bullman]

If you're vat registered then of course add vat to your day rate, never try and absorb it

 

 

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[Mark Wileman]

I'm not going to be VAT registered, just as SE I'll have a tax bill each year, so really need to keep 20% of everything I make to one side? I'm new to all this so I don't have the history to be able to forsee how much I'll be able to offset against my tax bill each year.

[Steve Bullman]

If you keep 20% aside of your turnover you will have enough to pay your tax and some spare. Remember the first year you will basically get a double tax bill though. You will have to pay your first year in full plus the following year in advance

 

 

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