Today I am pleased to introduce a guest post which is probably very relevant for a lot of SavvyScot readers. While we have all no-doubt heard various scandals on tax returns in the press, Danbro have some fantastic legitimate tips to share! While tax returns is not something I like to think about very often, unfortunately they have to be done! Enjoy..
DANBRO the award winning firm of accountants for contractors share 10 tax tips for contractors and freelancers:
- Incorporate your business – generally speaking if your turnover is £20,000 or more you may benefit from operating via a limited company.
- Register for VAT – claim back the VAT included in your expenses or consider whether the Flat Rate VAT Scheme would be to your advantage.
- Review your remuneration package – structure this to include a mix of salary and benefits e.g. sacrifice salary in return for employer provided childcare vouchers.
- Consider paying your spouse or partner – any salary should be reasonable to reflect the work they perform.
- Claim all your allowable expenses – ensure you account for all business expenses and claim allowances available to reduce your taxable profit.
- Make use of all tax free benefits – an employee can receive a number perks without attracting tax or national insurance e.g. a mobile phone.
- Pay into a personal pension scheme – obtain tax relief on the contributions you make.
- Retain profits within your business – the level and timing of extracting profit may affect the amount of tax you pay.
- Utilise unused personal allowance and basic rate tax band – divide your income producing assets with your spouse or partner, but be careful of some tax anti avoidance measures.
- Prepare an exit strategy – review your options now and plan accordingly.
DANBRO are a firm of award winning Chartered Management Accountants that provide specialist accountancy services to thousands of contractors and freelancers throughout the UK.
As a firm regulated by the Chartered Institute of Management Accountants (CIMA), DANBRO have become one of the most reputable firms within the industry. They are recognised as a Quality Accountant by the Professional Contractors Group (PCG), they are audited and approved by Professional Passport and are also an affiliate member of The Association of Professional Staffing Companies (APSCo).
Their excellent service levels and unrivalled commitment to their clients and staff saw them being crowned winners of ‘Business of the Year’ and ‘Employer of the Year’ at the 2011 Be Inspired Business Awards (BIBAs) and in 2012 they also won the Red Rose ‘Commitment to Skills’ award.
DANBRO continue to set the benchmark within their industry for management standards. They hold the ISO 9001:2008 status for their excellent quality management systems, were awarded the Investors in People award due to their commitment to their workforce and most recently received the ‘Customer First’ standard for the first-rate service provided to their clients.
- DANBRO provide all accounting solutions under one roof – This ensures contractors always receive the most tax efficient, compliant and hassle free advice tailored to their individual needs.
- DANBRO are preferred suppliers to over 450 recruitment agencies branches.
- The firm has offices in London, Manchester and Blackpool.
For more information:
Head Office: 01253 600140
Email: [email protected]o.uk