We all know that it can be tough out there at the moment and that there is plenty of uncertainty around when it comes to the economy. One of the benefits of being a Parasol employee or working on a freelance or contract basis, is that there are a few things you can do to boost your take home pay. And as the saying goes, ‘every little helps.’
Here are our top 5 tips:
Claim for all of your legitimate business expenses
One of the main benefits of being an employee of a company such as Parasol is that you can claim for all of the legitimate business expenses you incur and have them offset against your tax bill. This could be travel and subsistence expenses, hardware and software, professional subscriptions and membership; there’s a whole raft of things you could potentially claim for. We’ve got lots of information on expenses here, and if you are a Parasol employee you can always get in touch with our Employee Support team for advice.
Make sure you are on the right tax code
This sounds like a relatively simple one but you’d be surprised how many people aren’t currently on the correct tax code and are paying more tax than they should as a result. At this time of year it’s quite easy to check whether or not your tax code is correct as most people in the UK should be on tax code 810L unless you have additional income from things such as a buy-to-let property. If not, you need to query this with HMRC.
If your tax code is wrong you need to inform HMRC as soon as possible so that they can correct it. You will need to provide HMRC with your tax reference and National Insurance numbers, both of which you can find on your payslip. There are also some good online tax code calculators you can use such as this one.
Invest in a pension
As well as ensuring you have a decent income and standard of living when you retire, investing in a pension is an excellent way to reduce your tax bill and boost your take home pay. Basic tax payers can earn tax relief at a rate of 32%, and 42% for higher rate tax payers. We’ve got a lot more information on pensions here.
Negotiate your rate
You could be about to embark on your first assignment, or be a seasoned contractor whose current assignment is up for renewal. Either way there are some hints and tips you can take on board to ensure you are getting the best possible rate. For all you newbies out there, there is some really helpful advice here. And for the veterans out there, it’s never too late to learn new tricks so you might want to have a read of this guide to contract renewals.
One of the reasons so many freelancers, contractors and temps choose to work with Parasol Group is because we have both Parasol and our sister company ClearSky Accounting. We offer the only genuine best advice out there for you and your personal circumstances. For some freelancers, contractors and temps, setting up their own limited company can help boost take home pay. Our best advice team will help you understand which is the best trading option for you – just give them a call on 0800 458 0818.