Any freelancer or solopreneur requires a comprehensive plan to achieve their financial goals, including accurate record keeping, increased profitability, and tax compliance. You, too, will profit from hiring an accounting firm to help organize your finances, regardless of the scale of your start-up. If you want to increase your work chances in the future, you must make sure that you build the foundation with strong bookkeeping and accounting support.
When you’re a solopreneur or a freelancer, you’re a one-man show. You’re responsible for not only providing excellent service but also for less exciting company activities such as accounting. However, it would be best if you did not wait until the tax game to begin keeping track of your finances.
Bookkeeping typically includes several programs aimed at ensuring that all financial transactions are registered. Sales, invoices, purchases, payroll, payments, profits, and other resources are examples of these services.
If you’re a freelancer in the UAE and want to avoid the pain of last-minute accounting mistakes that can hurt your company, you should be aware of the challenges and how to solve them ahead of time.
With recent changes to UAE taxation laws affecting freelancers and solo entrepreneurs, hiring an accounting firm’s aid and expertise might be more important than ever!
Freelancers who earn more than Dh375,000 per year are required to apply for VAT. VAT registration is optional for those making between Dh187,500 and Dh375,000, and those earning less than Dh187,500 cannot register under current laws.
Some freelancers and solo entrepreneurs may choose to avoid VAT registration’s hassle and burden, such as filing quarterly returns and paying VAT on time. There is, however, an excellent reason to do so: UAE businesses are increasingly preferring VAT-registered freelancers over those who aren’t, with certain companies opting not to work with unregistered freelancers at all.
Employing a solopreneur who is under-reporting their profits puts the employing business at risk of colluding with freelancers evading their tax obligations, which can sound like a bitter pill to take for lower-income freelancers.
Any taxable entity in the UAE is required by UAE VAT laws to keep complete and accurate records of all products and services supplied, imported, and exported. All transactions, credit notes, adjustments, and taxes payable and recoverable must be registered, and records must be held for a period of five years.
Fines of AED 10,000 for the first offense and AED 50,000 for each subsequent offense may be imposed for failing to keep or maintain proper tax records. Many company owners would like to avoid this situation.
Financial tracking and preparation are vital for long-term sustainability if you intend to build a profitable company in the future. One of the most common errors freelancers make is failing to keep track of their finances. Delaying bookkeeping each month, missing tax payments, ignoring cash flow problems, manual calculations vulnerable to human error, and hiring an inexperienced accountant to manage your finances are just a few examples of common blunders.
Now, just like any other issue, bookkeeping headaches for freelancers can be solved in a variety of ways! A development that could help freelancers get around these issues: those earning less than Dh187,500 can team up with other freelancers to reach the minimum threshold requirement.
Freelancers may form a group and register under a single license, allowing their profits to be deemed collectively for VAT purposes. They each also retain their individual profit centers inside the company. Freelancers could be restricted to working for companies that do not require their contractors to be VAT licensed.
Finally, hiring a Dubai accounting company to manage the paperwork associated with VAT registration would include a bunch of new additional benefits. The majority of the small companies are more competitive with the assistance of an accountant or financial advisor, which is the secret to their expansion.
A Certified Public Accountant adds value to a client’s business by providing expert financial advice that ensures the company stays profitable, liquid, and solvent. An accounting or audit company may also help freelancers set up processes and procedures to automate financial and non-financial data capture, ensuring that they meet record-keeping requirements. This creates positive momentum in the workflow, reducing undue tension.
Using a qualified accounting firm’s services in the UAE will help you avoid these pitfalls and keep your company on track to profitability and enforcement.
Dubai-based accounting firm providing high-quality financial services, enabling its clients to gain a clear strategic and competitive advantage while also adhering to professional business ethics will do your work. A variety of specialist services in accounting, auditing, and management consulting will help you take the company to the next wealth management stage.
Tanvi Fal Dessai
Tanvi | Narrated by: Sara
Tanvi Fal Dessai
Tanvi Fal Dessai