Running your own limited company provides you with a great amount of freedom. With this freedom comes more responsibility for your finances and as a contractor, there’s a lot to consider.
But with some careful organisation and planning, managing your finances will be easy. Read ClearSky’s top tips for making your money go further and preparing for the future.
Open a business bank account
This is a compulsory step when you become a limited company director. Having a separate business account will help you to budget and be more aware of what’s going in and out of your account. Your separate account can also help to more effectively manage your income and dividends.
If you’re unsure where to turn for the best bank account, ClearSky have partnered with Cater Allen, who specialise in business banking for contractors. You can find more information here.
Be aware of what’s going in and out
If you’re not aware of your income and outgoings, could find yourself being stung with unexpected costs. Get into the habit of keeping your receipts and invoices in good order so you can track what’s going out.
To help you budget based on your income, you can also use our interactive online calculator to find out what you could earn each month.
If you’re deemed outside of IR35, there are a number of expenses you can claim back, providing they are ‘wholly and exclusively’ for your business. Claiming tax relief on the cost of running your business can help to make your money go further.
You can view a full a full rundown of the expenses you can claim here.
Start saving money for the future
As a contractor, your irregular income can make saving for the future difficult but making regular savings will be paramount for your future. You should try to put aside a small amount each month into a savings account. Making savings will also allow you to take time off when necessary.
Help from ClearSky
Managing your money as a contractor is not always straightforward. Your dedicated accountant can help you to manage your money, giving you more time to focus on the things that matter.
For further advice and support on becoming a limited company director, you can get in touch with ClearSky. Just call us on 0800 464 0379 to speak to a member of the team.