Get an accountant
Every creative freelance should hire an accountant to do their accounts and file their tax returns.
Many freelances refuse to pay an accountant, preferring instead to struggle through their self-assessment form themselves. Well good luck to you, if that’s you.
That’s exactly what the government wants you to do because it knows you will not be deducting all the costs and making use of all the allowances that you could have used. You will be paying more tax than you should have done and Chancellor George Osborne will be delighted.
I’m good a maths. I understand numbers better than most journalists (many of us think of ourselves as wordsmiths first and foremost). I’ve worked on several financial and accountancy magazines and websites. I’ve interviewed chancellors of the Exchequer, accounting standards setters and bigwigs in Her Majesty’s Revenue and Customs. But I pay an accountant to go through my books and put everything in order.
Pay for professionals
Actors hate it when non-Equity extras get used, when the am-dram queens think they’re as good as drama-school trained professionals. Journalists get riled when teachers get the job of covering sports matches or students get to write gig reviews, just because they’ll do it for the free entry ticket rather than charge a proper fee. We’ve all seen the well-meaning amateur make a hopeless hash of a job we could have done to a professional standard.
Well, it’s the same with accountancy. Being good at maths doesn’t make me an accountant.
An accountant will be able to do your accounts faster and more accurately. They will know the tax allowances that benefit you. They will know what expenses you can legitimately offset against your income and those you cannot. And they will know where to find answers to questions much faster than you can.
Knowing the market
If you use an accountant who knows your sector and has other clients in similar lines of business they will know the specific schemes that operate in your sector – film and TV have their own rules, for example – and what others in your field have successfully claimed or unsuccessfully tried to claim.
And there is an additional benefit of using a professional accountant: should the taxman investigate and discover your accountant has got things wrong, you can sue your accountant – those regulated by their professional bodies are required to have professional indemnity insurance to cover just such an error.
Next: How to choose your accountant.