Working out tax & NI as a freelancer

alicefreelance

Hi all!

I'm a 25 y/o relatively new to freelancing. I've paid off all my tax for the 2018/19 tax year but wishing to be more organised for 2019/20.

I know the wise route would be to get an accountant, and I AM considering this. However, I was wondering if anyone could give me any advice on how to estimate my monthly tax, NI and student loan repayments (plan 2) so I can save them each month. I don't want to fall behind and would prefer to set aside the correct money each month.

Any help would be much appreciated - maths isn't my strong point. Thanks in advance.

00ec25

you have not said if you are a Ltd company (employee & shareholder) or a sole trader (aka self employed) so your question cannot be answered

learn the basics
https://www.moneysavingexpert.com/banking/tax-rates/

read how tax works
https://www.moneyadviceservice.org.uk/en/articles/tax-and-national-insurance-when-youre-self-employed

if you are a Ltd Co ask your accountant because the tax position can be radically different and you have a significant opportunity for making a right mess of it

alicefreelance

I am a sole trader - sorry for the lack of clarification

Pennywise

If you are really set against using an accountant, I'd suggest you use freeagent book-keeping software which includes tax/nic calculations as the year progresses based upon your income/expenses as entered by you, and has the functionality to submit your self assessment tax return after each year end. For small/simple sole traders, it's ideal. (No, I don't work for them, I'm just an accountant who uses it for a lot of our clients and find that clients really like it).

If you want to use other book-keeping software, that's fine, as long as you use something and do the book-keeping properly and regularly. If your core data isn't correct and up to date, whatever you use to estimate tax and NIC won't be right either - garbage in, garbage out.

alicefreelance

I'll take a look at Freeagent - sounds like it'd be really handy. Thanks so much.

strongboes

Id suggest Taxo'd, brilliant new software which auto files your tax return, scans receipts etc. https://taxodapp.com/