Accountants for Freelancers: Do You Need One? Sole Trader Advice
Author: Russell SmithMay 1, 2019
Being self-employed can unlock a level of work satisfaction you never thought possible. Many people thrive with their newfound independence and go on to be massively successful.
But the lives of the self-employed aren’t always plain sailing.
There’s no guaranteed income and no paid sick days. On top of that, you become entirely responsible for managing complicated financial tasks. The maintenance of your business’ money is entirely yours to control. This can be a stressful concept for those without experience.
Going self-employed means you are left to fend for yourself financially. Or are you?
Being a freelancer doesn’t mean you have to cope with the burdens of tax, bookkeeping and other accountancy tasks alone. Accountants for freelancers are available to support your goals and lift some of that weight from your shoulders.
Accountants for Freelancers: What Are They?
Freelancer accountants operate just like any other accountancy expert; they provide financial advice and management to business owners. Except, in this circumstance, they have tailored skills developed to specifically help sole-trader enterprises. This means they specialise in providing services and solutions that match up with both the financial obligations and the goals of a freelance worker.
What does this mean? It means expertise in various aspects specific to freelancing, such as:
- Self-employed tax returns
- Managing expenses and freelance invoices
- Supporting self-employed documentation and HMRC correspondence
- Sole trader VAT payments and registration
- Financial planning and strategy for sole traders
- Assisting with the establishment of your rates and fees
The list is more extensive than that, but this gives you an idea of what accountants for freelancers can offer.
How Much Do Accountants for Freelancers Cost?
This is going to be an important question for many freelancers operating in the UK. The average sole trader in the UK makes around £50,000 per year. While this is a respectable figure and well above the national average, it isn’t enough to hire a dedicated accountancy expert to manage your financial obligations.
Luckily, freelancers don’t need a dedicated accountant.
Accountants for freelancers generally operate on an outsourced basis. They work as a firm, just as we do at RS Accountancy, managing multiple clients over a range of sectors and industries. In practice, this means you don’t have to pay for services you don’t want or need, and packages can be tailored to suit your small business.
The result is that this form of accountancy work drives down costs and makes accountants for freelancers a realistic expenditure, even for the smallest of enterprises.
It’s impossible to know how much you’ll need to pay an accountant until you discuss your needs with them. Why not contact us and grab a free quote from RS Accountancy today, and discover the kind of figures you are looking at?
How Can Accountants for Freelancers Support Your Business?
If you’ve turned down the stability of full-time employment in favour of going it alone, there are a lot of tasks you’ll need to manage if you want to ensure stability and financial security. Our online accountant services can be the support you are looking for and take care of the important accounting elements of freelancing you may feel unprepared for. Let’s take a look through some of the things an accountant could do for you, and find out how you could benefit from some assistance.
Sole Trader Accountants Make the Most of Your Money
Perhaps the biggest concern for those who set out on their own is financial security. Every penny earned becomes far more significant than before, so it’s vital to keep track of money coming in and going out. The government offers special tax allowances for the self-employed, and the right accountant will take advantage of these for you.
Plus, if you work from home, an accountant will help you reclaim some of the costs incurred there. Your utility bills, Council Tax and rent are all expenses that can be partially reclaimed. For example, if your home has five rooms and you work out of one of them, your accountant could help you claim back a fifth of those running costs. Possibilities such as this make hiring an accountant a straightforward decision.
Freelancer Accountants Save You Time
One of the main reasons people go self-employed is to spend more time doing the things they love. In some cases, though, the reality can become quite different. Self-employed tax returns and other complicated forms can become overwhelming for those without financial experience. As a self-employed musician, for example, you wouldn’t want to let admin take over your life and stifle your creativity.
The end of the financial year and the deadline for tax returns are two periods when admin will take priority. Hiring specialist accountants for freelancers will ease the burden, ensuring you can continue to create and thrive all year long.
We Manage Tax Returns for the Self-Employed
Perhaps the most daunting aspect of self-employed life, tax return time is stressful for anyone who works for themselves, and getting it wrong can be costly.
As a sole trader, you’ll have to fill out a self-assessment tax return so HMRC can judge how much tax you need to pay. The deadline for your tax return is 31st January if you file online. If this is your first self-employed tax return, allow for an extra ten days as you need to register first.
Submit your tax returns a day late and you’ll be faced with a £100 fine. If you are judged to have filled in your returns carelessly or deliberately underestimated your tax, you could be fined up to 100% on top of the tax you owe. An accountant will ensure that your forms are filled in carefully and accurately.
One of the perks of being self-employed is being able to deduct company expenses from what gets taxed. So what would a musician’s tax return look like? Well, let’s say you earn £25,000 in your first year as a musician. Great! If you spent £5,000 on work-related travel, instrument repairs and printing flyers for your gigs, you’d only have to pay income tax on £20,000. This is your taxable profit.
Accountants for freelancers will help you identify what is a business expense and what is a personal expense — or what is tax-deductible and what is not.
Sole Trader Accountants Can Actually Help Your Business Grow
An experienced accountant will have helped hundreds of people just like you, from freelance photographers to self-employed shop owners. As a result, they know what it takes to succeed and the mistakes to avoid. While you may think of an accountant simply as a financial advisor, their experience within business also supports an ability to offer advice on development and growth.
At RS Accountancy, for example, we pride ourselves on not only on our skills in money management but also our business growth consultation services. After over more than 10 years of operation, we’ve seen every kind of pitfall you can make and countless success stories, allowing us to build an understanding of what works in your industry, as well as what doesn’t.
Finding the Right Accountant for Your Self-Employed Business
It’s important to note that not every accountant will offer you the same service. Different firms and individuals have different specialisms and tailored services. If you want to see the greatest success and make the most of your investment, it is crucial you go with the right solutions provider for your self-employed business. Finding the right accountant isn’t actually all that difficult; you just have to be prepared to put in the leg work. The easiest way to find the best accountant for you is to discuss your needs with a firm you are considering using.
At RS Accountancy, we specialise in modern small businesses, startups and sole-trader enterprises, however, we don’t work with larger companies or those that take cash-in-hand payments. That means when somebody within our area of expertise comes to us, we are able to easily talk about their accounting needs and offer tailored services, and also tell freelancers when we aren’t right for them.
If when you engage with an accountant or an accountancy firm, you find they try to offer generic services, use jargon, will take on anyone, don’t specialise or don’t have experience in your industry or sector, you know they aren’t the ones for you.
Finding the right self-employed accountancy expert for your sole-trader enterprise means reduced stress and potentially dramatic financial savings. Get in touch with our online accountants today to discuss how we can support your unique needs!
Russell Smith is an award-winning accountant and founder of RS Accountancy. With over a decade of experience running his company, he has worked with countless small businesses just like yours, helping them grow profits and manage their finances. Russell is also a prolific financial writer, having contributed to such publications as The Guardian, The Telegraph and The Daily Mail.