- Accountant for Self Employed
The year 2020 has been rough for citizens around the globe. Given the fact that COVID-19 has disrupted all business activities, irrespective of its size, people are now keen to ensure that their tax liability is kept at minimum. The situation demands assistance from an accountant for self-employed/ small businesses. Here are 5 ways that an accountant can be your saviour too!
1. Understanding your permissible deduction limits and simplified expenses
As a self-employed person there are certain standard deductions and capital allowances that HRMC allows before making the income taxable. Expenses such as office phone bill, fuel, etc., are eligible for deduction from the business profit, before making it taxable. Your accountant will help you sort out the aforesaid deductions and reduce your total tax liability.
2. Work from Home
Are you aware of the fact that HRMC has allowed deductions to self-employed people who work from their home? Proportion for business expenses such as landline bill, water, electricity, council tax, insurance and mortgage interest qualify for deduction. Accountant for self-employed can categorically elaborate a specific percentage or flat rate simplified expenses deduction under each business particular head. For people who run their business from their own home, they can claim deduction under ‘Use of Home’.
3. Family members are an asset
When it comes to small business/ self-employment, having someone from the family as a partner is a calculated step towards tax savings. As per the current list of deductions, £12,500 is allowed as Personal Allowance, therefore considered as tax free. The same benefit is available to each and every family member. Diversification of income under various family members after making them co-owners or partners can help you reduce the overall tax liability.
4. Efficient drawings from the business
As a business owner, there are various modes of withdrawing profits from a business. Some prefer to take it a part of profit, whereas some are happy to withdraw a fixed amount every month in form of drawings. There are also other options such as dividends and payment of interest on capital. Speaking to your accountant will help you understand the areas that will give you the maximum tax deduction relief.
5. Keep your information organized
As a business owner, make sure all your information is well organized and tracked from day one. This will help you track all your incomes and expenses of the business over a given period of time. When your accountant will start computing your tax liability for a given period, it will be easier for him to explore various avenues of tax savings.
Thus, we find that an accountant for self-employed has become an essential resource for every small business these days. It helps the business to concentrate on its growth and efficiently manage the available resources.