The heart-lifting freedom on offer as a freelancer is feeling matched only by the sheer dread of filling in HMRC’s self-assessment tax form. There’s something so attractive about being your own boss and this is a way of life which will continue to attract people for many generations to come. However, some downsides seem inescapable. While self-starting and motivation will always be tricky for some, there are practically none who enjoy having to calculate their own taxes. Fortunately, umbrella service companies ensure that you can stay out of the rain with your tax revenue and can focus your attention where it belongs; keeping your clients happy. Let’s think about what this really means for a freelancer.
Avoiding the Hassle of Self-Assessment
In many freelance professions, expenses for travel or materials must be paid upfront by the contractor and invoices can really start to stack up if multiple clients are involved. It’s all too easy to let things spiral out of control. When organization inevitably flies out the window like a beautifully made paper aeroplane, you simultaneously receive a letter from the taxman (or tax woman) that you owe money to her majesty the Queen. It’s a painful picture and one that all freelancers are likely to experience to one extent or another at some point in their career.
If you’re feeling the constant weight of this rigmarole on your shoulders you’ll be familiar with the how it bears down and looms at every juncture. The chore of self-assessment gets pushed ever further down your to-do list. We’ve all been there. An umbrella company takes care of everything.
Avoiding the Risks
For the uninitiated, the world of tax calculations can be an intimidating place, even if you enter it with the best of intentions. Mistakes can be made and, for many creative people, trawling through all of the forms, drab information and data can be something of an uphill battle. During this process, the temptation to skim-read what could potentially be mission-critical information is all too tempting. This activity can consequently result in receiving hefty fines. If you make a mistake on your tax return, pay the incorrect amount or try to claim expenses on things which you should not expense then you can get in trouble with the tax office. Again, an umbrella service comes to your aid, allowing you to avoid this pain completely.
Peace of Mind
With the above in mind, the most important collaborative factor on offer with an umbrella service is peace of mind. If you’re signed up with an umbrella service, all that needs doing is to let your client know that all payments will be handled by that company and pass on the relevant contact information. It means that, whether you’re taking on additional work with the extra time freed up or taking advantage of your flexible hours and enjoying yourself, you know that the usually painful nitty-gritty aspects of your tax related endeavors are taken care of. An umbrella service removes the primary downsides of being a freelance contractor and that genuinely is priceless.
About the Author
Jamie Peters is a freelance writer for Focused Umbrella.