How To Shape Up Your Earnings Model For The New Tax Year

Google reviews
April 06, 2018

Every freelancer and contractor is out to make as much money as possible; and scrutinising your financial success in previous years can steer you towards higher profits. April is the time of year where one tax season rolls into another, rendering it the perfect month in which to look back over old statements and rethink your earnings model moving forwards.

There are several ways to bring in more money as a freelancer/contractor. In our latest blog, we lay out some of the most effective methods.

Set up a tax savings account

You should already have distinct business and personal accounts that keep your commercial and private income separate from one another. But what about a savings account exclusively for tax?

By channelling 20% of your monthly earnings into a special account via direct debit, you should have no problem paying the taxman come the end of the year. In some instances, you may find you have money left over, which you can either pump back into the business or put towards a holiday.

Regardless, a tax savings account keeps your business financially secure, saves stress at tax submission time and ensures you remain in HMRC’s good graces.

Subscribe to finance software

The better organised your finances are, the less time you’ll waste frowning at spreadsheets and panicking about missing numbers.

That’s why finance software is so beneficial. It doesn’t take long for huge stacks of paper to build up, and standard spreadsheets become head-spinningly confusing after inputting a few months’ worth of figures. The likes of FreeAgent, on the other hand, lets you take charge of your finances. With a speedy, easy-to-use, online system, you can stay on top of finances from anywhere at any time, all year round.

Consider going limited

Do your finances reflect good growth? If so, it could be worth setting up a limited company as part of your new earnings model.

Not only will this reduce your personal liability as a business owner, it’ll also put more money in your pocket. There are lower tax liabilities for limited company directors than sole traders in many instances, so if you’re pulling in bigger profits, it could be time to make the switch.

Adapt your accounts

Rejuvenating your earnings model at the beginning of a new tax year is a smart move, giving you every chance of boosting your business over the course of the next 12 months. However, your accounts need to match your new approach. The best way to make sure everything lines up nicely is by getting an accountant to do it all for you.

Bright Ideas are perfectly placed to offer all the support you could need. Our team of experts can talk through your prospective new earnings model and give you a deeper understanding of your finances, showing you how to keep accounts HMRC-friendly after taking your business to the next level. Get in touch with us today on 0161 669 4221 or to book a FREE consultation.

Business Money


Recent Articles

HMRC app helps with student finance applications

HMRC app helps with student finance applications

An app from HMRC which provides information such as your National Insurance number and tax information has been flagged by the taxman to help students completing their A’ Levels this year and planning to head to university in September. Anyone who is applying for...

Want to avoid fines from HMRC? Here’s how

Want to avoid fines from HMRC? Here’s how

No-one likes to pay more to the taxman than they have to, but if you fall foul of HMRC’s rules, you could find yourself paying a penalty, and interest if things are not sorted out quickly. There are various fines you could face from HMRC if you get things wrong, and...

Why Stamp Duty Land Tax might need to be reformed

Why Stamp Duty Land Tax might need to be reformed

Stamp Duty Land Tax (SDLT) is the bane of property buyers in the UK. It is paid on every property purchase worth more than £250,000, and more people are being forced to pay it each year as the thresholds stay the same while property prices rise. The number of...

Ready to join us?

Whether you’re a contractor, freelancer, or small business, Bright Ideas can help remove the burden of time-consuming and complex finances. We’ll draw on our years of knowledge and experience earned helping sole traders just like you.

When you choose us, you’ll be assigned a dedicated Account Manager who’ll provide one-on-one support that’s customised to your business. Communication is key, so we’ll always answer your questions or requests as soon as we can. In fact, we offer a same-day response guarantee for emails and calls received before 3pm.

Contact us to get started

Give us a call us or send an email today!

Looking to switch accountants?
We make the transition simple.

Does your current accountant give 1-to-1 support? Are they fast and thorough?
Slap-dash services hold businesses back, so try our experts instead.

Move to an accountancy service that goes the extra mile…

Start the conversation

Let’s make your finances Brighter

Call us Monday to Friday 9am - 5pm

0161 669 4221

Request a call back