Accounting for self-employed IT contractors

What Taxmo does for IT contractors

Income and expenses in one place

Record what you earn and spend in categories, and see your profit and what to set aside for tax as you go. On every plan.

Time tracking

Track billable hours with a timer and turn them into an invoice. On Pro.

Invoices and quotes

Send quotes and invoices from the same records, and see which invoices are still unpaid. A few a month on Free, without a cap on Starter and Pro.

VAT returns, once you are registered

Taxmo works out the nine boxes from your approved entries, shows where each figure comes from and files the return to HMRC over Making Tax Digital. On Starter and Pro.

Connect your bank

Connect your bank read-only or upload a CSV statement. Each transaction waits for your approval before it counts. On Starter and Pro.

Receipt scanning

Photograph a receipt or forward it on WhatsApp, and Taxmo reads it into an expense for you to check. On Starter and Pro.

Capital allowances

Keep a register of the assets you claim capital allowances on, with the annual investment allowance and writing down allowances worked out for each. On Pro.

Expenses IT contractors commonly claim

Computers and equipment

Equipment you keep, for example computers or printers, is an allowable expense on the cash basis or claimed through capital allowances on traditional accounting. Source: https://www.gov.uk/expenses-if-youre-self-employed/office-property

Software and subscriptions

Computer software your business uses for less than two years, and trade or professional journals and memberships related to your work. Source: https://www.gov.uk/expenses-if-youre-self-employed/office-property

Working from home

The business part of running costs if you work from home, or a flat monthly rate under simplified expenses if you work enough hours there. The flat rate does not include phone or internet, which you claim separately. Source: https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home

Phone and internet

The business share of phone, mobile and internet bills. Only the business part of a mixed-use bill counts. Source: https://www.gov.uk/expenses-if-youre-self-employed/office-property

Training

Courses that keep you up to date with technology used in your industry, or develop skills related to changes in it. Training to move into an unrelated area is not allowable. Source: https://www.gov.uk/expenses-if-youre-self-employed/training-courses

Business insurance

Any insurance policy for the business, for example public liability insurance. Source: https://www.gov.uk/expenses-if-youre-self-employed/legal-financial

Rules worth knowing

Off-payroll working (IR35)

If you work through your own limited company, the off-payroll working rules can apply where you would have been an employee if you worked for the client directly. In most cases the client decides your status. Your company decides only when the client is a small business outside the public sector. Source: https://www.gov.uk/guidance/understanding-off-payroll-working-ir35

Checking your status as a sole trader

Whether a contract is self-employment depends on the working arrangement. HMRC's Check employment status for tax tool gives HMRC's view from your answers. Source: https://www.gov.uk/guidance/check-employment-status-for-tax

Common questions