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4 Quick Tax Tips for the Newly Self-Employed

by Olufisayo
quick tax tips

In some ways, it’s something to celebrate. After all, if you’ve managed to get to a level where your new business is about to pay tax, you’ve reached your first goal of turning a profit.

Of course, as time progresses, tax perceptions change somewhat. Not only is it a considerable dent in your company’s coffers, but it can also be a resource-intensive exercise.

Bearing this in mind, if you are a new business attempting to delve into the tax foray, read on to find four quick tips to help you along your way.

Get used to documenting everything

Sure, you’ve got 101 different plates to spin in the early days. However, even if you don’t take any other advice from today’s article, at the very least, try to organize your affairs.

Every time you spend money, document it and keep the receipt. This might seem like a pain, but it’s much easier than scrambling around trying to find documentation when tax time comes.

Not only that, but we can guarantee that this will save you money. Over a year, you will forget those small expenses, ranging from your first professional indemnity insurance payment right the way down to a taxi fare you took when visiting your first client. Don’t forget that these can all legitimately reduce your tax bill by the year’s end.

Talk to an accountant

While we’re on the subject of expenses, this is a great segue into our second tip. Always, always, always speak to an accountant. We cannot stress this enough.

A certified accountant should always be your first port of call if you want to get your tax affairs in order and avoid any potential complications. They will be able to advise you on which expenses are and are not allowable, and more importantly, they will be able to set up a system to make sure that you don’t run into any problems.

There’s no harm in being proactive

Once you have your tax strategy in place, it’s essential to be proactive rather than reactive. This means that you should always seek ways to minimize your tax bill.

Common methods include making the most of any tax relief available to you and restructuring your business in a more tax-efficient way. For example, if you are a sole trader, you may want to consider changing your business structure to that of a limited company. This can have many advantages, not least because you will only be taxed on your company’s profits rather than your personal income.

Stay up to date with the latest changes

The tax landscape is constantly changing, so it’s important to make sure that you stay updated with the latest developments. This means reading up on any new legislation that may be relevant to your business and keeping an eye on any future changes that the government may be planning to make.

The best way to do this is to sign up for a reputable tax newsletter. This will ensure that you receive timely updates on any changes that could potentially affect your business.

Photo by Kelly Sikkema on Unsplash

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