Freelancing is exciting, but when it comes to taxes, it can get complicated quickly. Filing your self-assessment tax return can feel overwhelming, especially when your income isn’t steady and you have various bills to manage. Hiring an expert self assessment accountant can save you time, help you avoid mistakes, and ensure you meet all your tax obligations. In this article, we’ll outline seven reasons why you should consider hiring an accountant for your self-assessment tax return.
Reason 1. Expertise in Complex Tax Regulations
You probably have more than one source of income as a freelancer. It might be hard to know how to disclose all of your revenue appropriately, including client payments, side jobs and passive income. An expert accountant knows the latest tax laws and ensures that all your income is filled properly, helping you avoid any costly mistakes
Reason 3. Maximising Allowable Expenses
Freelancers must keep track of their income and expenses, but it’s easy to miss important receipts or forget about certain deductions. An accountant can help organize your finances, track expenses, and make sure your records are complete and accurate. This also lowers the chance of making mistakes when you file your return.
Reason 4. Navigating Tax Reliefs and Allowances
Freelancers in the UK can benefit from various tax reliefs and allowances, but understanding which ones apply to your situation can be challenging. An expert accountant can help identify the reliefs you’re eligible for, ensuring you don’t miss out on valuable tax savings.
Key Tax Reliefs and Allowances for Freelancers:
Trading Allowance
If your total income from self-employment or casual work is £1,000 or less in a tax year, you don’t need to pay tax on it. This is ideal for small side gigs or hobby-related income.
Simplified Expenses
If you work from home or use your car for business, simplified expenses offer flat rates to calculate these deductions, making it easier to claim for business-related costs.
Allowable Business Expenses
You can deduct certain business expenses before paying tax. These include:
- Office costs (e.g., stationery, phone bills)
- Travel costs (e.g., fuel, parking, train or bus fares)
- Clothing expenses (e.g., uniforms)
- Staff costs (e.g., salaries, subcontractor costs)
- Materials
- Financial costs (e.g., insurance, bank charges)
- Costs of business premises (e.g., heating, lighting, business rates)
- Advertising or marketing costs
- Training courses related to your business
Pension Contributions
Freelancers can contribute to pensions and receive tax relief on those contributions. This can reduce your taxable income while also saving for your future. An expert accountant can guide you through these options, ensuring you get the most out of your eligible reliefs and allowances.
Reason 5. Avoiding Penalties and Interest
As a freelancer, missing tax deadlines or making mistakes on your self-assessment return can result in costly penalties and interest. For example, if you’re late filing, you’ll face an automatic £100 penalty, which increases over time. After six months, additional charges of 5% of the tax owed can apply. An accountant ensures everything is filed correctly and on time, helping you avoid unnecessary costs.
Reason 6. Efficient Tax Planning and Forecasting
Freelancers often face unpredictable income, making it difficult to plan for taxes effectively. Without a clear strategy, you might end up owing more than you anticipated at the end of the year. An expert accountant can help you by:
- Forecast tax liabilities based on projected income.
- Identify eligible deductions and reliefs.
- Manage cash flow effectively to meet tax obligations.
With the help of an accountant, you can keep track of your income and taxes easily, avoiding any last-minute surprises during tax season.
Reason 7. Providing Peace of Mind
An expert accountant reduces your stress by managing your self-assessment tax returns, making sure everything is compliant, and giving you advice. This support lets you focus on your work, knowing your finances are in good hands.
Hiring an expert self-assessment tax return accountant offers many benefits for freelancers. They help you get the most out of your tax deductions, avoid penalties, and file your taxes on time and properly. Don’t let tax season cause unnecessary stress. Book a free consultation with our expert accountants today and take control of your freelance tax responsibilities.
