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All the best,
The SK Accountants team
Thank you for getting in touch. A member from our friendly team will aim to get back to you shortly.
All the best,
The SK Accountants team
Thank you for getting in touch. A member from our friendly team will aim to get back to you shortly.
All the best,
The SK Accountants team
Starting a freelance career marks a significant transition from traditional employment but it’s a decision that many are nervous to make.
Freelancing, while offering greater flexibility and autonomy, comes with its own set of challenges, decisions, and an increased responsibility for your finances.
The first decision you need to make is whether to become a sole trader or set up a limited company.
In the first part of this series, we will help you understand how becoming a sole trader could affect your tax obligations, legal liabilities, and administrative duties, to help inform your decision.
Keep an eye out for our next blog, which will explore the option of setting up a limited company if being a sole trader is not the right path for you.
Pros of becoming a sole trader:
Cons of becoming a sole trader:
Tax considerations
Navigating taxation effectively is a critical aspect of freelancing.
As a sole trader, you’ll complete a Self-Assessment tax return annually, paying Income Tax and National Insurance on your profits.
If your profits exceed £85,000 you will need to register for VAT.
You can register for VAT before the threshold to reclaim VAT for business expenses.
Keeping records and accounting
As a freelancer, you must track all business transactions and commit to firm and robust accounting practices.
Often, it is advisable to consult with an accountant to ensure that your business finances are in order.
Keep an eye out for our next blog, which will explore the option of setting up a limited company if being a sole trader is not the right path for you.
If you would like to speak to one of our experts regarding becoming a sole trader, please get in touch today.
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