29 Nov 3 accountancy tips for freelancers
If you have just set-up as a freelance worker then there is no doubt it is an exciting time. The ability to work in a career you love and the flexibility it brings is superb, as is the chance to say goodbye to that morning commute! As well as all the fun bits, you also need to remember about keeping your accounts up to date and filing your tax return. This is crucial for any freelancer to avoid fines or inspections from HMRC.
If you are a new freelancer and need some help in this area, here are a few things to consider:
Keep accurate records
One important step for all freelance workers is to keep your financial records up to date. This includes invoices for work done as well as receipts for any expenses you may be claiming back when you file your annual tax return. A top tip is to get in the habit of keeping this regularly updated at the end of each month so you don’t have a big rush tracking down all the relevant paperwork when your tax return is due!
Be open about your earnings
When you work for yourself, it can sometimes be tempting to brush small payments or earnings under the carpet so to speak. Please don’t do this! It is the worst mistake you can make as if HRMC audit you and find out, it will spell big trouble. Anyone can be audited, be it a sole trader or large company, so make sure you are open and honest when you do your accounts.
Keep some money aside for your tax bill
When you are earning money each month as a freelancer but not paying tax every month, it can be easy to forget to set some of your earnings aside to pay your annual tax bill. This is not a great idea though as when you do get your tax bill to pay, you will not have budgeted the money for it over the preceding year. Try to set aside a good amount each month from what you earn so that this will not be an issue when the time comes.
If you would like any further information on how to look after your accounts or would instead like a professional accountancy firm to do it for you, contact SQK Accountancy today! We have many years experience in the field and can make any VAT, tax or accountancy stresses disappear.