Starting Up

Starting as a contractor or freelancer can be both exciting and challenging. Having an accountant from the beginning ensures your finances are well-managed, allowing you to focus on your business. Here are some key tips:

Business structure: Consider if you should operate as a sole trader or start a limited company.  This decision will impact your tax liabilities and responsibilities.

• Sole Trader: Personal and business finances are combined for tax purposes.
• Limited Company: Offers separate legal entity status, potentially more protection, and tax efficiency.

Managed Finances: Setting up a separate business bank account, even as a sole trader, can allow you to clearly differentiate between personal and business transactions, making bookkeeping simpler. Keeping accurate records of all your income and expenses are crucial for both tracking your business performance and preparing for your tax obligations.

Tax Responsibilities: It’s important to understand what taxes you are liable for and when they should be paid.

• Sole Trader: Submit via Self Assessment.
• Limited Company: Pay Corporation Tax on profits. Consider VAT as your business grows.

Professional Support: While managing finances independently is feasible, hiring an accountant who specialises in your sector ensures that your money, taxes, and deductible expenses are accurately and efficiently handled. This provides an extra layer of security and peace of mind.