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Becoming a freelance accountant: How to do it

10th Dec 2021
Brought to you by

Myriad Associates helps businesses maximise tax reliefs.

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Standing out from the competition

“In 2020 there are now almost 2.2 million freelancers in the UK, up a small one percent from 2019. Of these over 1.9 million state that freelancing is their main job with a further 239,000 people doing freelancing as a side hustle alongside other employment.” - Ipse

The gig economy is thriving. Faster broadband, flexible working and a desire to be your own boss are driving many of us to take the plunge and go self-employed.

Freelancing certainly lends itself to some industries more than others. Creative and media work and the arts all feature heavily. But a growing number of UK accountants are also ditching the 9-5 and throwing themselves headlong into freelance life.

This article is aimed at people who are already qualified employed accountants. So if this is you, and it’s time to make the dream a reality, read on.

First, register as self-employed or set up a limited company

We won’t go into detail as it’s a bit “granny and eggs”. We thought we’d mention it though.

Many freelancers start off as sole traders. Some stay that way, while others later set up a limited company. That’s up to you, but as you’ll no doubt be aware, they come with different tax liabilities.

Either way, all self-employed individuals must register with HMRC. You will then be provided with your unique tax reference. For a quick refresher, see the Working for Yourself section.

Open a business bank account

You don’t legally have to have a business bank account but it’s strongly recommended you do. Why? Firstly, because personal bank accounts aren’t designed for business use so doing so could mean you’re in breach of your bank’s terms and conditions. This would be a telling off at best, and a CIFAS marker at worst, which for accountants could well be game over.

Secondly, business bank accounts separate your finances allowing you to keep track of cash flow and expenses. Not sure which ones are any good? Which offers some handy comparisons.

Notify the Information Commissioner’s Office (ICO)

Just as when you were employed, your job will involve holding your client’s sensitive financial data. This means you must register with the Information Commissioner’s Office (ICO).

Register with an approved Supervisory Body

Again you may well be familiar with this, but whether employed or self-employed it still applies to anyone providing accounting services. It’s a legal requirement, designed to help prevent money laundering and involves registering with HMRC under the Money Laundering Regulations.

Go niche

Many people set themselves up as a freelance general accountant covering all common tax/accounting needs. This is fine of course, but specialising in something a little more niche can really set you apart.

Perhaps you’ve got wider experience in a certain industry, or with smaller companies/start-ups rather than larger ones? Why not offer R&D Tax Credit claims too? More on this later.

Choose the right software

Once you’re all set up, you’ll need the right accounting software. Most of them offer some kind of free trial so you can find one that best suits you.

At Myriad Associates we often suggest clients use Xero as it’s well recognised and supported, and also integrates with Tax Cloud. As most of them are these days, it’s also cloud-based which is great for secure, accessible data storage and sharing on the go.

Purchase business insurance

Even the most diligent of us can make a mistake occasionally, and legal action is sadly all too common.

Buying business insurance that’s specially designed for self-employed accountants is a must-have, simply for your own peace of mind and protection. This may include contents and equipment insurance, professional indemnity insurance and cyber insurance to name just three.

Offer a bundle

Consider the kinds of related services previous clients have asked for when you were working for a practice. Then put together some service packages with attractive discount prices. Many freelance accountants offer three packages: one of essential services like tax returns, one of additional services and one that offers a full suite of services.

A great way to do this (and find new clients) is to join freelancing websites like Upwork and PeoplePerHour.

Get good at marketing yourself

As early as possible, you need to be established as someone who is knowledgeable, approachable and trustworthy. This means building your brand and promoting your services.

There are loads of ways to do this, and it doesn’t have to cost the earth either. A good place to start is by getting your social media presence sorted. Sharpen up your LinkedIn, Facebook and Twitter accounts to advertise your skills and begin to build networks. Make a website too (if you don’t fancy doing this yourself there are plenty of freelance web designers out there who will do it for you - again, hit PeoplePerHour or Upwork). Just make sure the website’s SEO is up to scratch, to include key terms like “freelance accountant for hire”.

Don’t forget to ask any previous clients for testimonials regarding your services too. These can be proudly displayed on your website and social media as a way to reassure potential new clients of your competence. Advertise your qualifications too.

Diversify your services!

One service that will really help you stand out is to offer R&D Tax Credit claims. But I wouldn’t know where to start, we hear you say. Well panic not! The Myriad Associates team will help.

When it comes to freelancing, you need to fight your corner. Accountancy is an incredibly competitive sector and getting clients through the proverbial ‘door’ is crucial. However, by offering as broad a range of high quality services as possible, you’re more likely to attract interest.

R&D Tax Credits represent a generous government tax rebate scheme where UK companies engaging in innovative projects can claim up to 33% of their qualifying R&D expenditure back. As long as investment was made in solving a specific technical or scientific uncertainty where the outcome was unclear, then R&D Tax Credits could follow. See our R&D Tax Credits page.

The great news is that thanks to Myriad’s two partnership programmes, we can work with you in helping your clients claim. Not only that but we’ll support and guide you along the way, effectively meaning you’ve got a whole R&D tax department at your fingertips without actually employing anyone!

Read more about why accountants should work with a leading UK R&D tax consultancy like us. Then when you’re ready, call our friendly team on 0207 118 6045.