Manage your finance and taxes like a pro when you go freelance

You can master your finances and deal with your tax on time like a pro. There are so many solutions and things to keep in mind when it comes to finances and saving money for your tax.

But we and our partner Coconut got you covered.

Last week, we invited our dear friend Coconut, experts in freelancing to host with us a more-than-useful webinar on how to master the art of saving money for your tax and keeping track of your expenses when you work for yourself.

Have a read of the key learnings from the event and the best advice from the team at Coconut.

Keep on top of your finances

James, Lead Accountant at Coconut, couldn't repeat that enough: when you work for yourself, you need to keep track of your finances.

Which finances?

  • Your income. How much do you earn monthly/weekly as a freelancer ?
  • Your expenses. How much do you spend for your business?

As James explains, business expenses can be: transport, phone bills, lunch, training (we'll talk about this later on) etc.

Anything you need to pay/buy to run your business is considered a business expense.

  • Your savings. How much to put aside every month or week?

James's tip 💡Put aside at least 20% of your income every month (or 5% weekly if you prefer) to make sure you can pay your taxes at the end of the tax year.

One of the biggest challenges you could face when being freelance is not saving enough and not keeping track of your profit and expenses. So, don't wait up!

Get a tool that helps you to do all of this

If you're not a spreadsheet master and would prefer to use a tool to keep track of your finances, there are many tools available on the market.

These tools are called "bookkeeping" or "tax" applications. They help sole-traders and/or limited companies to keep on top of their finances.

You can either use Coconut (and get the 3 first months free if you're a freelance using Brigad) or have a look online at the best solutions available for you and your business.

You can deduct expenses from tax

Yes you read correctly. You can deduct your business expenses when you're filling your self-assessment and thus lower the tax your pay.

You can deduct any expenses we mentioned above. How?

Coconut has gathered all the expenses you can claim and made a nice guide around it.

Training

One question we do get very often is: can I deduct training and courses from my tax. Yes you can.

Training tends to fall into two categories, each one being subject to different tax rules:

  • Training courses to update and improve existing professional skills and expertise;
  • Training courses that business owners and staff attend to learn new skills.

If you are self employed, any training you do that keeps your existing skills and expertise up to date would be a tax allowable expense.

So for example, if you're a commis chef and would like to train to become a chef de partie or need to update your certifications, you'll be able to claim that back.

How to claim your tax deduction

You can claim tax relief when you fill in your self assessment tax return. You’ll need to include it within the self employment section of your return as a business expense.

As with any other business expense, always make sure you keep your receipt as evidence of your claim.

Want to know more?

You can ask the specific questions you have to James, Coconut's Lead Accountant at james@getcoconut.com

More info about Coconut and how they can help:

As a member of the Brigad community, you can have access to three months free at Coconut. Have a look for more info 👇

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