Small Business Advice

Women in Business: The importance of managing your money as a freelancer

19 Feb 2019

As a freelancer, navigating the minefield that is managing your finances can be somewhat challenging, particularly when you’re already spinning all of the other plates that come with running your own side hustle, freelance gig or small business.


According to the latest figures, there were 4.8 million freelancers operating in the UK in 2018, among which female entrepreneurs are becoming increasingly represented.


However, if you’re thinking about joining their ranks, we strongly advise you take the time to understand how to stay on top of the financial elements of your new business venture.


In light of this, we are proud to be partnering with She’s On The Money for what we believe will be an incredibly insightful, educational event on managing finance as a freelancer, and will ultimately act as an all-encompassing guide to getting the best out of your freelance endeavour.


She’s On The Money is a network exclusively dedicated to female freelancers, entrepreneurs and all women in business, pooling their experiences together and in turn helping each other to thrive in the business world.


On March 6th at 6.30pm in Rise London, attendees will not only have the pleasure of listening to She’s On The Money founder, Molly Benjamin, but will also be treated to a financial management masterclass from Account’s and Legal’s very own Sylwia Kotarba-Harris.


Sylwia is an advocate of women in business and is fully invested in using her knowledge to support her peers and empower female entrepreneurs to achieve their business ambitions.


Tickets are flying off the shelves, so to avoid disappointment be sure to get your tickets here.

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Managing finance as a female entrepreneur

Start by projecting your minimum income and expenses in order to create a feasible budget for your business.


You can work out your average by adding together your yearly income and expenses, then dividing this figure by 12 to establish your monthly budget.


Or, use the month in which you earned least as a benchmark for income, and the month that you spent the most as an indicator of monthly expenses.


Make sure to include business costs (such as taxes and any licensing fees) you may need to pay in your overall expenses estimate.


When you’re self-employed, you pay income tax on your profits, not your total income.

To work out your profits simply deduct your business expenses from your total income. This is the amount you will pay income tax on.

The amount of income tax you pay on your profits is the same as if you were employed.


Rate

2019/20

2018/19

2017/18

Personal allowance: 0%



£0 to £12,500


£0 to £11,850 you will pay zero income tax on your profits


£0 to £11,500 you will pay zero income tax on your profits

Basic rate: 20%


£12,501-£50,000

£11,851 to £46,350 you will pay 20% tax on your profits

£11,501 to £45,000 you will pay 20% tax on your profits

Higher rate: 40%


£50,001-£150,000

£46,351 to £150,000 you will pay 40% tax on your profits

£45,001 to £150,000 you will pay 40% tax on our profits

Additional rate: 45%


Over £150,000


Over £150,000 you will pay 45% tax on your profits


Over £150,000 you will pay 45% tax on your profits


Remember, the rate is only applied to the profit between the brackets, not your whole profit. So, assuming you take the full standard personal allowance, if your profit is £50,000 in the 2018/19 tax year you will pay:


  • no tax on £11,850

  • 20% tax on £34,499 (difference between £11,851 and £46,350)

  • 40% tax on £3,649 (amount over £46,350)


Need to talk to an expert about managing your money?

As a small business accountant, our team are specialists when it comes to working with freelancers and have a wealth of knowledge to offer clients when they’re trying to get their own business off the ground - there is no question we haven’t faced or task we haven’t helped our clients overcome.


Are you stepping out into the world of freelancing, or have an established freelance gig(s) but need some expert advice or assistance? Get in touch to discuss how we can help, or try our instant quote tool and get a competitive fee in just 5 clicks.

Keir Wright-Whyte

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Managing Director

0207 043 4000

About the author

Originally graduating with a degree in geography from Edinburgh University, Keir claims that he was then tricked into becoming an accountant by one of the UK's top 5 accountancy practices.The deception extended to the usual training in audit and associated activities.

Keir subsequently worked in a number of advisory roles with clients including in the energy trading, pharamaceuticals and financial services sectors.

He loves working at Accounts & Legal because of the variety of work and clients, the excellent team ethos and morale, the importance placed on genuinely helping and being useful for clients and because he believes what he does matters to clients and helps the firm.

  

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