Tax Expert Reveals What You Need To Do To Ace It As A Freelancer

Business Insights

Self-employment has grown dramatically in recent years. The number of self-employed workers was as many as 4.8 million in 2017, according to the Office for National Statistics (ONS). In fact, it’s now predicted that they make up at least 15% of the population.

However, unfortunately, the road is not always clear. Many who turn to freelancing meet challenges along the way - and for some the trying times can lead them back to full time employment. However, according to tax expert Mike Parkes of GoSimpleTax, this is because freelancers are missing out on 5 key points. Which, if they can get right, will pave the way to success in their freelance or self-employed journey.

“Going self-employed is a huge plunge for people” Mike explains, “but the rewards can be huge. It can give you more flexibility, the chance to be your own boss and generate revenue on your terms. However, whilst being self-employed might have multiple benefits - there are also areas to be aware and mindful of too.”

“There are many things you should think about before going freelance if you want to truly make it. They include…

Knowing Your Way Around Expenses

The first thing I would recommend is really knowing your way around expenses. There’s a lot that the self-employed can claim on expenses that they don’t know about, even right down to heating and lighting bills, travel fees and uniform costs. When we quizzed our GoSimpleTax users about how much they’d saved since using our software, we found out that we'd saved people significant amounts of tax - just by providing them simple hints and tips! What I would recommend is really doing research into the claimable expenses you rack up every year, and if in doubt seek the help of a professional, as you could be saving yourself thousands as a freelancer.

Not Ignoring The Rise Of Co-Working Spaces

Co-working spaces and offices, such as WeWork, and their popularity has risen dramatically in recent years. These spaces give freelancers and self-employed people the chance to have their own working space away from home - which is great for work-life separation, but they also have several other benefits too. They give you a chance to network with a wide pool of people, either potential clients or those who could become another arm to your business. They give you a desirable office location which is good for hosting meetings and conferences. And also, they allow you to be flexible with the way you work - which might very well be one of the reasons you decided to freelance in the first place.

Staying On Top Of Your Tax Returns

One of the biggest for me is staying on top of your tax returns. Last year, we did some research that unearthed the fact that some weren’t submitting their self-assessment until seconds before the deadline. Others, after the deadline. When you’re a freelance worker, you can have a lot of things to remember and to keep on top of - but if you don’t give your self-assessment attention, you can risk some hefty fines. What I’d suggest is chipping away at it throughout the year, making sure you’re logging receipts etc. and really keeping it in the back of your mind. That way, when ‘deadline day’ looms - you won’t have a big task ahead of you.

Valuing Networking And Its Power

As a freelancer, knowing people is incredibly important. And one of the best ways to do this is to network, get out there and meet people. I can talk all day long about how important it is to keep on top of your finances and taxes, but I also think it’s well worth mentioning that if you really want to make it in the self-employed space - you need to market yourself. Networking events are a great place to interact with people who you might not normally meet. And also just making yourself known and available for coffees and meetings can open new doors for you as a freelancer and help you expand your clientele.

Keeping Your Personal And Business Finances Separate

And finally, I’d also touch on the importance of managing your separate finances. As a businessperson, I would advise you have separate bank and business accounts. As a sole trader, it’s not a legal necessity. But, it would give you more transparency in your finances as you can keep cleaner records - some business bank accounts even categorise your expenses to make the record keeping easier. Look for providers that offer a mobile app, a free or low-cost monthly account fee, low transaction fees, an overdraft facility and free cash withdrawals.”