Contracting 101: Why staying on top of your taxes will help your reputation
There are countless benefits to being a contractor – you get to set your own hours, you can take vacation when you choose, you can charge the rates that you think you are worth, and you are your own boss. You never have to worry about being laid off or fired, but you do have to ensure that your clients are happy, both during and after the transaction.
This is why, as a contractor or freelancer, you are only as good as your word. Your future in your industry depends on your reputation and reviews, and so it is imperative that you follow general best practices when it comes to contracting in the United Kingdom.
Remember – as a freelancer or contactor, you must make sure that you are always accounting for the tax that you must pay at the end of the year (not to mention setting aside money for retirement and/ or quiet periods in your work year). Neglecting to do this can result in some pretty dire consequences:
- Huge fines or interest rates for late payment
- A poor reputation in your industry – gossip spreads between clients and other contractors!
- As a worst case scenario, even jail time
- An end to your career
Don’t risk losing the value of your word – and losing your career. If you are unsure about whether you are doing your bookkeeping in an efficient way and correctly calculating the taxes you need to pay (or don’t need to pay!), you don’t need to feel embarrassed. After all, you are the expert in your field – sometimes you need to hire someone who is an expert in their field: a bookkeeper. Once you hire a professional bookkeeper you can relax in the knowledge that your taxes are taken care of – and so is your reputation