Even a freelancer needs an accountant
The fast paced world of a freelancer. Working on different projects each month, picking up new clients, working long hours and late nights to meet deadlines. It’s a common story for any successful freelancer who is determined to work independently and often from the location of their choosing.
A freelancer’s time is often dedicated to working on projects and sourcing new business to help build up their monthly cash flow and bring longevity to their freelance campaigns. All of this activity leaves very little time to keep accurate bookkeeping or to maintain track of bookkeeping.
Do freelancers need to do a Self Assessment?
If you’re freelancing, you’ll almost certainly need to complete a Self Assessment tax return each year to declare your income to HMRC.
A freelancer accountant can handle this for you, making sure your return is accurate, filed on time, and that you’re claiming every allowable expense you’re entitled to.
If you’ve recently gone freelance, getting an accountant involved from the start means things are set up correctly and you won’t have any nasty surprises waiting for you at the end of the tax year.
Sole trader vs. limited company
Most freelancers will begin as sole traders and stay that way, but for some people it’s more practical to operate as a limited company. This might be to take advantage of certain tax benefits, or to protect your personal assets if the type of work you do is high risk.
A freelancer accountant can walk you through the pros and cons of each structure based on your specific situation – and they’ll also advise further down the line if they think it’s best to switch business structures.
Making Tax Digital for freelancers
Making Tax Digital (MTD) for Income Tax requires sole traders and freelancers to keep digital records and submit quarterly updates to HMRC – followed by a final declaration, replacing the traditional Self Assessment tax return.
It currently applies to those with gross income over £50,000, with more freelancers being brought in from April 2027.
A freelancer accountant can manage the whole transition for you – getting your digital records set up, helping you choose the right software, and handling your quarterly submissions so you stay on the right side of HMRC.
You can find out more on our MTD Income Tax Returns page.
So, where do I find an accountant that works with freelancers?
A good place to start is with recommendations. Do you know of any other freelancers who are using an accountant? Check them out and see if they are suitable for you. You will find nearly all reputable freelance accountants will be online based or will have some online capacity when it comes to interaction with your accountant, sending in your records or getting general advice.
This works perfectly for a freelancer who often moves around work locations and having an accountant that is accessible online can really make a difference. Of course by using an online service, this opens up the choices you have to choose from. Find an accountant that is accessible, who has worked with freelancers and ideally knows your industry.
Knowledge can save you money!
Knowing what you can claim for can really help your cause when it comes to your tax returns. You normally get some information on what is claimable when chatting with fellow freelancers, often though, it’s too late or inaccurate.
By having an accountant that deals with freelancers on a daily basis looking after your accounts, you will be made aware about everything you can claim. From working from home costs, to fuel and food expenses. They’ll also ensure you’re claiming any reliefs you’re entitled to.
How much does a freelancer accountant cost?
Fees vary depending on things like your income, how complex your accounts are, and the types of services you need. For example, you might need additional services such as VAT or bookkeeping.
For most freelancers, Self Assessment returns are pretty straightforward, so you’d typically expect to pay somewhere between £200-£500 a year. Fees will likely be higher if you opt to run your business as a limited company because of the extra admin involved.
Many online accountants offer fixed-fee packages which makes budgeting easier – you can compare accounting packages here.