Freelancer accounting in Brighton: limited companies, self-assessment and what you need to know

If you're a freelancer or consultant in Brighton, getting your accounting structure right can save you thousands of pounds a year — and getting it wrong can cost just as much. Here's what you actually need to know.

Sole trader or limited company?

This is the most common question from new freelance clients. As a rough guide, a limited company typically makes financial sense when your annual profit exceeds approximately £30,000–£35,000. Below that, the tax saving may not justify the additional complexity.

Salary and dividend planning

If you operate through a limited company, the most tax-efficient approach is typically to pay yourself a salary at or around the National Insurance threshold (currently £12,570 per year) and take additional income as dividends. Dividends are not subject to National Insurance and are taxed at lower rates than salary income.

This planning needs to be reviewed every year as tax rates and thresholds change — what was optimal last year may not be this year.

Allowable expenses

Whether you're a sole trader or operating through a limited company, you can deduct allowable expenses from your taxable income. These typically include:

• Home office costs (a proportion of your bills)
• Equipment, laptop, and software
• Professional subscriptions and memberships
• Training relevant to your work
• Travel to client sites
• Accountancy fees
• Phone and broadband

Self-assessment for freelancers

If you have any self-employed income, you must register for self-assessment and file a tax return each year by 31 January. Even if you operate through a limited company, you will still need to file a personal self-assessment return as a director.

Making Tax Digital

From April 2026, self-employed individuals with income over £50,000 will be required to keep digital records and submit quarterly updates to HMRC. From April 2027, the threshold drops to £30,000. If you're approaching these thresholds, now is the time to get set up properly.