The Nuts and Bolts of Mechanic Work
05th December 2016
"You know what the problem is? We've got too many damn mechanics," said no one, ever.
When it comes to mechanics, it seems like skilled hands will always find worthwhile work. If you know your way around an engine block, you stand a good chance of self-employment success. Don't expect an easy road, though. Starting a business is always a risk. You've got to go in with both eyes open if you're hoping to avoid the major pitfalls. A good start depends as much on what's in your business plan as what's in your toolbox.
Let's start by looking at you. Like everything else worthwhile, good mechanics aren't born; they're built. It can take years to bulk up your skill set to professional grade, so it's a good idea to start early. That means getting the right qualifications and experience. With a City & Guilds or BTEC certificate under your belt, you've already taken a big step toward a workable career. Apprenticeships are also a great way to learn on the job, and being paid to do it. They generally combine practical work with theoretical training to give you an all-round education. Doing work experience in a garage can also be a decent option. Think of it as a stress-test under real-world conditions.
Assuming you're trained up and ready to kick-start your career, it's time to think like a business owner. You'll need a place to set up shop, and the right tools and equipment. That's going to mean splashing some cash. You might want to consider working for an employer in the trade for a while before striking out on your own. It might be better to do that and save up for a while rather than overload your new business with debt on day one. After all, you're likely to need expensive bits of kit like vehicle lifts, or a van if you're planning on being mobile. Don't forget to budget for important "hidden" stuff like insurance and permits, too. Not everything you need can be found in a well stocked tool chest, and the best diagnostic equipment in the world won't show you how to fix a failing business.
Running a mechanic business often means dealing with people as much as machines. You're going to have to build relationships with customers, suppliers and competitors. Most importantly, you're going to have to get along with the taxman. If you're a Sole Trader, your set-up might be relatively simple. Just keep in mind you've got very little protection for your personal cash if you hit a rough patch. Limited Companies take slightly more money and hassle to get going, but can work out safer and more tax-efficient in the long run. Get comfortable handling your cash flow, and keep your paperwork spotless. HMRC's going to want to know about every penny your business brings in and pays out, so keep good records and know how to use them.
You'll be using the Self Assessment system for your tax returns, so make sure you've registered for it before you start trading. Learn the difference between the "accruals" and "cash" bases of accounting, and work out which is best for you. Know what your legitimate business expense are, and understand how they can bring down your tax bill and keep your cash flow healthy.
If you're not intending to be self employed and are employed as a mechanic working for a company then you may be eligible for a tax refund for any work related travel and other expenses such as paying for tools or clothing and other essential costs of your job. However, far too many people are missing out because they don't know what to claim or how to do it. We can help get that hard earned cash back in your pocket.
Crucially, remember that going your own way doesn't have to mean going it alone. RIFT has been helping people handle their finances since 1999, and we're the UK's leading tax experts. We can sort out your Self Assessment returns, claw back cash from the taxman and do a whole lot more. Call or email to find out more or use our tax calculator to see what you're owed.