If you are a self-employed IT Contractor or a freelancer, it is essential to get the right advice and useful tax tips regarding IR35.
Read on to get some essential tips on how to save tax and keep on top of your business.
1) Receipts on Tap
First of all, ensure that your business receipts and accounting records are always in order.
If things are under control and in order, there are less probability to make mistakes by the IT Contractor and avoid getting caught by IR35.
The bank account can be reconciled using an online accounting system to save time on managing paper receipts and expenses.
2) Expenses and Limited Companies
As a contractor or freelancer, you can claim their set of eligible expenses.
Expenses through a limited company draws corporation tax relief at 20%.
Still you need to be aware of the strict rules on expenses.
The first step for any contractor is to maximize their disposable income as legally as possible.
Using a limited company can give you a lot of benefits to claim back a range of different expenses to reduce your tax bill.
Some of the freelancers that we work for do a lot of driving for their work.
So one example is claiming the maximum 45p tax-free allowance for mileage for the first 10,000 miles of travel for business.
3) Beware of The IR35 Trap
Make sure to follow IR35 rules that evaluate contractors and freelancers based on the working arrangements.
The evaluation is done on contract by contract basis and getting caught in IR35 means to defeat the very objective of running the business through a limited company.
Keep the above guidelines and tip in mind to stay at the top of your taxes and run your business with confidence and be on the right side of IR35.
If you would like to speak about tax savings for IT Contractors and freelancers in more detail CLICK HERE to contact us today for a free consultation.
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