If you read our previous entry on the Freelancer Accounting (http://www.freelanceraccounting.com) blog, then you’ll know that many freelancers become so largely by accident, rather than design. You’ll also be aware, however, of the great earnings that many freelancers can command, while we have also previously covered many of the knotty tax responsibilities with which our accountants in London can assist. For many freelancers, though, just surviving is tough enough.
It is at the start of your freelance career, in particular, that you are especially vulnerable. For those that don’t have any jobs, contacts or clients to begin with, it can feel like an uphill struggle to constantly chase up those opportunities. Indeed, you may wonder whether you’re ever likely to get on a stable financial footing. At worst, you can find yourself trawling for odd freelance jobs on sites that seem to be aimed more at students than long-time professionals.
Try, try and try again
However, it is that word, ‘professional’ that sums up the attitude that you must take in the early months of your freelance career, with ‘persistent’ and ‘patient’ being others. The most successful clients of our small business accountants got to where they are today by taking chances and being more than merely ‘eager’. They had business cards designed and websites developed and generally made the most of every opportunity, making sure that each and every job was done to as high a standard as possible so as to attract recommendations and repeat business.
But of course, even the most altruistic freelancer still needs to eat, which is why many of them take on other part-time work to begin with, so they have a certain degree of financial security for those lean weeks and months when work seems thin on the ground. You’ll also need to ensure that in all of your eagerness to price your services competitively, you don’t find yourself working full-time hours for part-time pay. Be open to the range of jobs that you are willing to do, and view those inevitable mistakes as mere learning experiences.
Look to our highly-rated specialist expertise
A freelancer’s tax matters can be especially daunting, even more so if you’re new to taking care of them yourself after years of employment under PAYE. Things like your self assessment tax return suddenly become deceptively easy to forget about, and subjects like IR35 and limited company formation can confuse even some seasoned freelancers. That’s why it’s such a good idea to seek out a PCG accountant who can guide you on matters like the business expenses that can be claimed against tax.
Give Freelancer Accounting (http://www.freelanceraccounting.com) a call now for more information about our specialist accountancy services for new freelancers. We charge a competitive fixed fee so that you can budget well in advance.
Did you know that November 21st was National Freelancers Day? If you did know, then you may be currently employed, but curious about what the freelance ‘lifestyle’ has to offer, prompting you to visit this site. Certainly, Freelancer Accounting (http://www.freelanceraccounting.com) is committed to providing the highest quality accountancy services for this section of the UK workforce, but our experience also puts us in a good position to provide advice on what it takes to succeed when self-employed.
You might have presumed that freelancers are all a bunch of jetsetters with salaries far exceeding that of the rest of the population. On that front, perhaps your presumptions aren’t too inaccurate. After all, a recent study revealed that the average freelancer salary is more than twice that of the average British worker, with those in fields like banking, engineering and IT doing especially well. However, freelancing also frequently involves long hours with no holidays, with 40% of freelancers working more than 41 hours a week – and 15%, more than 51 hours a week. There’s no holiday pay, after all.
Indeed, there are other statistics around that tell a story of some perhaps being forced into freelancing, such as the record number of part-time workers in the UK and the 80% increase in the number of freelancers across Europe. Indeed, 1 in 4 of the UK’s 4.2 million freelancers – 14% of the nation’s workforce – admitted to being forced into self-employment having been made redundant. Given the increasing trend for cash-strapped companies to outsource services, it seems that accountants for contractors will be in demand for some time yet!
In truth, freelancers ideally need to have certain characteristics to succeed, with some people simply preferring the comfortable structure that being employed provides. Many of those who make use of our accountants for freelancers find it difficult to say “no” to work as it comes in, not least given the uncertainty of how much work will be available from one week to the next. Those in self-employment are lonelier and need to be ‘self-starters’, proactively seeking out contacts and constantly waking up to work each day, unprompted, and that’s not a transition that some people easily make – even if the rewards are potentially great.
Another potentially complex area to which freelancers need to pay attention is, of course, their own accounting. To be a freelancer at all, you’ll need to be self-confident in your work, so that’s rarely such a big problem… but if you’re one of the many freelancers or contractors who admit to being “terrible with numbers”, you’ve got a potential issue. That’s why Freelancer Accounting (http://www.freelanceraccounting.com) is here to guide you through the various intricacies of freelance accounting and relieve stress, providing you with a well-qualified PCG accountant so that you can spend more time doing what you do best!
Here at Freelancer Accounting (http://www.freelanceraccounting.com), we take pride in supplying specialist contractor accountants who can remove a considerable amount of the stress from the task of keeping your financial and tax affairs in order, and as any seasoned contractor will tell you, there are definitely certain things that can catch you out from your very first day contracting, which makes our extensive range of services especially invaluable.
With one of our accountants for contractors by your side, you’ll find it easier to face up to your long list of obligations, with one of the main ones that you will have to consider – not only as you begin contracting for the first time, but also every time you are presented with a contract – being IR35. Contractors are continually complaining about the difficulty of understanding IR35, but we’ll help you to familiarise yourself with its requirements and construct contracts that stand up to an IR35 inspector’s scrutiny.
It will also be necessary for you to invoice your agent on a weekly or monthly basis, providing an approved timesheet. This will need to be forwarded to them within their prescribed deadline to ensure that there are no delays in payment. You will also need an effective method for recording all of the company transactions, namely payments, invoices and expenses – and again, our small business accountants can advise you on the most suitable arrangement.
Payroll is another aspect to which you will need to pay plenty of attention as a contractor, as in your capacity as a company director, you will normally take a salary from the company irrespective of whether you are working under IR35. The preparation of payslips will need to be arranged and necessary taxes will need to be paid in good time. Once the tax year comes to an end, an employers annual return (form P35) will need to be filed, in addition to forms P14, P60 and P11D if any expenses or benefits in kind have been taken by you from the company during the year.
Those contractors that work outside the scope of IR35 will take most of their income from the business by way of dividends, with board minutes and dividend counterfoils needing to be prepared as each one is taken. You’ll also need advice from a contractor accountancy firm like us on a sensible amount of dividends to withdraw, as they should not exceed the company’s profits after corporation tax. And of course, accounts will also need to be submitted by your company to the Inspector of Taxes and Companies House each year.
Here at Freelancer Accounting (http://www.freelanceraccounting.com), we can assist with these and the various other related tasks that will confront you as a contractor, such as completing and forwarding your company annual return to Companies House and personal tax and VAT returns. Contact our accountants in London now to learn more about our various well-priced packages.