What Freelancers can do to reduce Tax Bills?
More often than not, for any British freelancer, financial matters are a significant hurdle that poses much more difficulties than one could expect.
Although numbers are relatively straightforward, cash-related matters often prove to be more complicated because of all the nuances that the HMRC upholds. Fortunately, improving your cash balance isn’t as complicated as what most people make it to be, mainly because modern systems have made financial planning even easier!
Seeing that saving as much money as possible is an item that should be on any freelancer’s list, it’s clear that every measure must be taken to achieve such a result. With the right approaches in mind, you can save up to £1500 in taxes without having to stretch yourself thin!
Tax Savings Made Easy: Tips That Every Freelancer Must Consider
If you’ve meant to boost your profits and stick to the idea that freelancing is the lucrative opportunity you thought it to be, then you should start targeting your annual dues before all else. To ensure that you’re spending the least amount of money legally possible on your tax bills, here are a few tips and tricks you should consider and start using:
Tip #1: Construct a tax plan
More often than not, many freelancers find themselves spending much more than they usually do on their taxes because they approach the process without a plan in mind. As opposed to counterproductive measures that rely on aggressive tax schemes and retrospective planning measures, coming up with a concrete plan is a much better route.
You see, a tax plan that irons out all the details beyond dividends and salaries, while considering various opportunities to make claims and reduce redundancies is far more effective than any other measure. If you’re not entirely sure how you can construct a set of actions that will lead to better results, then get in touch with 1to1 Accountants to see how we can help get you started!
Tip #2: Not one to skimp on holidays? You can claim those, too.
At 1to1 Accountants, we’re no strangers to having astounded clients and freelancers that learn about the wonders of intelligently claiming expenses during holidays and school fees.
Although the HMRC may seem excessively strict at times, the reality is that they follow a system that is lenient enough to those who want to save on their tax expenses. Suppose you’re currently running a limited company. In that case, you can use HMRC’s Benefit In Kind system, which allows you to claim various expenses, such as holiday expenses, school fees, and golf lessons!
Tip #3: £78,000 worth of tax allowances are available for use—so don’t miss out!
Speaking of having the HMRC on your side when it comes to saving as much money as possible in your freelance practice’s operations, the available £78,000 in tax allowances yields crucial opportunities you shouldn’t miss out on.
According to the principles of sensible tax planning efforts, it is crucial to stay aware of this large sum of allowances made available to any freelancer. After all, these are bound to be wasted if not used correctly!
Conclusion
If you’re a cost-conscious freelancer who wants to boost profits and keep expenses down, it’s crucial to be well aware of the various opportunities you can use to reduce your tax bills. With the help of the three tips mentioned above that are used by the UK’s best accountancy practices when serving their freelancer clients’ needs, you can see dramatic reductions in your expenses in no time!
Are you looking for an accountancy practice in England to help you reduce your tax bills? At 1to1 Accountants, we specialise in helping freelancers, small businesses, and other types of companies optimise how they handle finances with our accountancy services and bookkeeping expertise. Get in touch with us today to learn more about how we can take your profits to the next level!
