ACCOTAX - Accountants & Tax Consultants
Welcome to ACCOTAX, a firm of Chartered Accountants in London. The firm was established in 2009 and has helped thousands of businesses and individuals...See More
ACCOTAX - Accountants & Tax Consultants
Welcome to ACCOTAX, a firm of Chartered Accountants in London. The firm was established in 2009 and has helped thousands of businesses and individuals...See More
Frequently asked questions
What should I look for when choosing an accountant for my freelance business?
When selecting an accountant, look for recognised qualifications from bodies such as ACCA, ICAEW, or AAT. These ensure the accountant has undergone rigorous training and adheres to professional standards. Also consider their experience with freelancers specifically, as they will be familiar with the tax rules that apply to your situation. It is wise to check if they offer services that match your needs, such as Self Assessment preparation or VAT handling. Finally, arrange a consultation to see if you feel comfortable working with them, as a good working relationship is essential for effective financial management.
How can a freelance accountant help me with HMRC deadlines?
A freelance accountant will maintain a calendar of all relevant HMRC deadlines, including those for Self Assessment tax returns and payments on account. They will prepare and submit your returns well in advance, giving you ample time to review the figures. If you are VAT-registered, they will ensure your VAT returns are filed correctly and on time. In the event of a query or investigation from HMRC, they can represent you and handle all correspondence, reducing your stress and ensuring that your rights are protected throughout the process.
What is the difference between a sole trader and a limited company for freelancers?
As a sole trader, you are personally responsible for your business debts, and you pay Income Tax on your profits via Self Assessment. A limited company is a separate legal entity, meaning your personal liability is limited to your shareholding. You would typically pay yourself a salary and dividends, and the company pays Corporation Tax on its profits. Each structure has different administrative and tax implications. An accountant can explain the pros and cons of each based on your income, expenditure, and long-term goals, helping you make an informed decision.
Can an accountant help me claim all the expenses I am entitled to as a freelancer?
Yes, an accountant will systematically review your business activities to identify every allowable expense you can claim. This includes costs such as office supplies, travel, professional subscriptions, and a portion of your home utility bills if you work from home. They will ensure that your claims are accurate and fully compliant with HMRC rules, minimising the risk of an investigation. By keeping meticulous records and understanding the nuances of freelance expenses, they can help you reduce your tax bill legally and effectively, potentially saving you a significant amount of money.
How often should I meet with my accountant?
The frequency of meetings depends on the complexity of your finances and your personal preference. Many freelancers meet with their accountant quarterly to review their financial position, plan for tax payments, and discuss any changes in their business. Others may only meet once a year to prepare their tax return. However, regular contact is beneficial, especially if you are experiencing growth or considering a change in your business structure. Your accountant can provide ongoing advice and help you make proactive decisions rather than reacting to issues after they arise.
What records do I need to keep for my accountant to prepare my tax return?
You should keep a record of all income received and all expenses incurred, including receipts, invoices, and bank statements. If you have a vehicle used for business, keep a log of your business mileage. For home office expenses, maintain records of your utility bills and the dates you worked from home. Also, keep records of any personal income, such as interest from savings. Your accountant will need these details to accurately complete your Self Assessment tax return. Using accounting software can simplify this process, and your accountant can recommend a suitable system.
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