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Working out tax & NI as a freelancer

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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.

Comments

  • 00ec25
    00ec25 Posts: 9,123 Forumite
    1,000 Posts Combo Breaker
    edited 14 July 2019 at 9:52PM
    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
  • I am a sole trader - sorry for the lack of clarification
  • Pennywise
    Pennywise Posts: 13,468 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    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.
  • I'll take a look at Freeagent - sounds like it'd be really handy. Thanks so much.
  • strongboes
    strongboes Posts: 107 Forumite
    Part of the Furniture 10 Posts
    Id suggest Taxo'd, brilliant new software which auto files your tax return, scans receipts etc. https://taxodapp.com/
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