FREELANCING IS GREAT AS IT GIVES A SKILLED PERSON CONTROL OVER THEIR LIFESTYLE, THEY CAN BE FLEXIBLE WITH THEIR WORKING HOURS AND CAN PICK AND CHOOSE THE WORK THEY WANT TO BE INVOLVED WITH.
We can help new freelancers get set up to ensure their new business is present and correct.
Freelancers often choose to start their journey as self-employed, as it’s is the most straight forward business structure. However, they can become a Limited Company from the beginning if they need to…
Organising new found freedom is important
Managing long term freedom and bigger earnings
Freelancers who are better established, or those who start out with a big client contract, often opt to trade through a limited company. When profits exceed £30-£40K, tax operating via a limited company is lower than being a sole trader. Operating as limited company is also advantageous due to the flexibility it offers in relation to erratic freelancing income.
We work with freelancers to help them set up Ltd Companies when the time is right and manage the obligations that come with it to ensure a stress-free end of year report and an optimum tax bill.
WE ARE WORKING TO HELP THOSE OPTING FOR THE FLEXIBILITY OF FREELANCING.
We help freelancers to understand and manage VAT to take advantage of the benefits of being registered.
The VAT threshold is £85,000 and if exceeded within a 12-month period, then VAT registration is required, and a freelancer must begin to charge 20% on their fees. However, it is often worth considering becoming VAT registered before reaching the threshold if clients are VAT registered and do not mind the VAT charge. The bonus is a freelancer can then reclaim any VAT paid on business expenses.
“Since I started working with Cottons London, my business has drastically improved.”
– Sam Campbell, Bleach London
What Freelancers Can and Can’t Claim
A major part of freelancing is travelling to visit clients or different workspaces. The cost of transport, food and drink whilst on the go, and staying over costs if required, can all be claimed.
Most freelancers require a laptop, mobile phone and various softwares to complete their work. These can all be offset against the tax bill.
Freelancers do use their home to complete work remotely, conduct new business development and manage their work loads. When they do, they can claim a percentage of their household bills for using their home as an office.
If you’re worried about your pension as a freelancer, fear not, we will keep you right.
Freelancers who operate via a limited company often make themselves an employee of the company and pay a tax-free salary to reduce company taxes and get a year’s worth of qualifying earnings towards a future state pension.
IR35 – What Freelancers Need to Know
HMRC have no issues with true freelancing, this means…
Note: if you are operating a limited company, meeting the IR35 requirements fall directly on you. If you are self-employed this is the responsibility of the company engaging your services.
SMALL BUSINESS RESOURCES
Tax advice, business guidance and business updates as soon as they happen.
