How To Save Money When You’re Self-Employed
Are you self-employed? If so, the government basically treats you as a business. At least, when you file tax, you file it as though you own a business. You don’t pay corporation tax, but there’s a self-assessment that demands to know how much money you made, how much you spent, what expenses you had, and so on. Similarly, you are in charge of deciding how much money you spend to help you do your job. As a result, you are always in a battle between not spending money and spending it.
On the one hand, the less you spend, the more you make. On the other, not spending money can mean you don’t reach your potential. Surely it makes sense to spend a little on marketing to get your name out there and find more customers? Some of your expenses are pretty much unavoidable, and they can put a dent in your profits. The great news is that two savvy tips will help you save money without missing out on crucial business investments. After all, that is how you should view your expenses – they are investments in your job!
Virtual outsourcing solutions
The easiest thing to do is to start outsourcing many of your solutions. Instead of going to an actual accountant and paying them to manage your books, outsource to an online company. If you’re looking for software accountants, MNE Accounting are a company that might suit you. They look after your accounts online via the cloud, meaning you never have to meet in person. It’s all software-based, which saves so much money. As a result, you’ve outsourced a key expense and saved money while still getting a great service that benefits you.
This doesn’t have to be restricted to accountancy services either. Think about what you’re paying for – or what you need to pay for. Can you save money if you looked online and outsourced to a virtual company instead?
List your business expenses
The second tip relates back to something mentioned in the introduction. You noticed a line about paying your tax as a self-employed individual. Well, you have a chance to list all of your business expenses when you file a tax return. This can help you save an absolute fortune by dramatically reducing your tax bill.
You see, your expenses get taken off your taxable income for the specific tax year. Essentially, your income gets added up, then all of your expenses are subtracted from it. Instead of paying tax on, say, £20,000 worth of earnings, your expenses may reduce that down to £18,000. There are substantial savings to be made, and you’ll be amazed at how many things are classified as business expenses.
Being self-employed can often seem like a poisoned chalice. On the one hand, you are your own boss and you can make a lot of money. On the other, you have lots of expenses and you basically run a business on your own. At the very least, this article will show you how to save some cash when you’re self-employed.