Working as an IT Contractor comes with many benefits that you can take advantage of such as flexible working, being your own boss and an increased wage. One thing that is overlooked though is the increased admin that comes with your finances. When making the switch to contracting, people often forget that it isn’t as straightforward as waiting for the money to just enter your bank at the end of the month.
With multiple projects ongoing all at once, IT Contractors can often have several streams of income at the same time, which can often be overwhelming when it comes to tax and your self-assessment at the end of the financial year.
Utilising a specialist contractor accountant with over 20 years’ experience in the IT sector, such as Brookson One can help take the stress out of managing your finances.
Track your expenses
If not fully accounted for, your expenses can be more challenging than first expected, especially if they aren’t incurred on a regular basis.
One of the great benefits of being a contractor is the ability to claim expenses on many things such as travel and company items such as laptops and phones. If you’re running your own Limited Company then you need to make sure they’re recorded in some way so that when it comes to tax, the job is that much easier. If you’re working via an umbrella company, keep them all tracked to send over as an expense claim with your invoice.
Keeping everything organised is vital to keeping your job as a consultant that much easier, you don’t want it to come to the end of the year and you’ve overlooked it.
Take home calculator
A great tool to keep on hand when starting out as an IT Contractor or to start using if you’ve been in the business for a while is a take home salary calculator. With this you can enter your hourly or daily rate and it’ll estimate your weekly or monthly salary allowing you to easily manage your income streams.
This gives you the information you need to plan your finances through the year, safe in the knowledge that tax is accounted for. Just as tracking your expenses helps, estimating your overall monthly income can help you avoid any unwanted stress when paying tax at the end of the financial year. This gives you room to enjoy the advantages of being self-employed to the fullest.