Why tutors using Sage One don’t find their accounts a grind
The grinds industry in Ireland is estimated to be worth €40m. As well as the traditional private tutoring services, you can now get extra educational support for all subjects and academic levels through online courses.
This means that if you want to develop your career as a tutor there are lots of options open to you, whether you want to get out and about or work from home.
Although you can advertise your services privately you may find you get a better flow of potential students by registering with an organisation such as TutorHub or First Tutors. You may have to pay them a small amount of commission, but this could be outweighed by the fact that you are swapping time spent on marketing for teaching and getting paid.
Private tutors can be a target for audits from the Revenue, who are watching for people who are offering services cash in hand and therefore not paying enough tax. So you need to make doubly sure that your books are accurate and up to date, and that you are paying the right amount to the tax man.
How can online accounts software such as Sage One help you streamline your processes so you can stay compliant with the Revenue, get paid on time, keep on top of expenses and fit everything to your working week?
Staying compliant with the Revenue
Whether you’re promoting yourself privately of using an online portal to find new students, you will be operating as a self-employed professional.
Being self-employed means that you are working for yourself rather than for an employer. You will have greater control over your hours, but of course your income may fluctuate – no more relying on the same sum reaching your account each payday!
You will need to pay tax under the self-assessment system. This means paying Preliminary Tax by 31 October each year to estimate the amount you owe, and making your final tax return no later than 31 October following the end of your tax year.
This annual tax return will include the Universal Social Charge.
Paying your VAT bill. You must register for Value Added Tax (VAT) if your annual turnover exceeds or is likely to exceed the following annual limits: €75,000 in respect of the supply of goods or €37,500 in respect of the supply of services.
Paying your PRSI bill. You will also need to pay Class S PRSI contributions, which entitle you to basic social insurance payments. You will be automatically registered for Class S PRSI when you register as self-employed with the Revenue.
What records do you have to keep?
To report your taxes correctly you need to record:
1) all purchases and sales of goods and services
2) all amounts received and all amounts paid out
How can Sage One help you stay tax compliant?
An online accounting software system like Sage One has lots of benefits for private tutors looking to keep accurate records and submit their tax returns:
1) Connect with the bank to easily download your latest statement and make sure transactions are correct when you reconcile the bank
2) Run off reports easily and quickly
3) Keep all your receipts in one place (don’t forget to keep hard copies of your invoices, receipts and bank statements too).
How do you get paid?
It’s important to get on top of this from the outset. Your clients are going to be students (who may not be very cash rich) and parents (who may be time poor) so it’s important to set expectations from the beginning that you need to be paid on time. This will be crucial to your success as a tutor.
How can Sage One help?
1) Easy integration with Sage Pay will allow you to take payments over the phone and online.
2) Customisable invoices will help you project a professional image, and the ability to generate PDFs which can be sent by email means your clients will always have a copy in their inbox (no lost pieces of paper!)
What expenses do you have as a private tutor?
You will have certain upfront costs as a private tutor, for example petrol and parking fees when visiting students in their homes or need to buy academic textbooks.
Some of these expenses can be claimed back against tax.
How can Sage One help?
Your costs can all be recorded in Sage One under the relevant nominal code. You can also create your own codes if there are items particular to the grinds you offer – for example you might want to separate out costs for different subjects or types of student so you can see which is the more cost effective to pursue.
Working outside the 9 to 5
As a tutor you can expect to work outside usual office hours – Saturday morning lessons are popular, as is support in the evenings when the school or working day is over. This means there is an extra challenge to keeping on top of your accounts.
How can Sage One help?
1) Download the app for iOS or Android so you can keep on top of your accounts when on the move – useful if you have a bit of downtime between tutoring sessions
2) Collaborate with your accountant or bookkeeper by giving them a login so they can access your accounts remotely
3) 24/7 support so even if you’re doing your monthly accounts late at night when the house is quiet, you can get answers from the experts. Easy set-up wizards make it easy to get started too, even if you’re not familiar with online accounting software.
Try Sage One free for 30 days, or skip the trial and save 20%!