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Tax Planning for Marketers: Financial Planning Tips

Written by Rajiv Singh

As a digital marketer, present days are busy with client meetings and project enhancement. Given the covid pandemic situation, most of the businesses in the UK have shifted to digital marketing and this has eventually resulted in high demand for digital marketers. However, with an increase in income there is also added responsibility of handling finances – tax planning, return filing, claiming deductions, etc. Here are few tax planning tips that will help digital marketers.

#1 – Be familiar with deductions from Income

Digital marketers can claim numerous deductions from their total income. An ideal option would be to hire an accountant for a digital marketer, who would help you locate these deductions from your current expense. Some of the most common ones are:

#2 – Invoice Management

Invoice management is one of the most under-rated accounting practices. The rule of thumb for book-keeping is that the moment you are incurring any expenses for a client project or raising an invoice, should document it in an organized manner. You could use market available cloud-based bookkeeping software that provides access via any device and that will enable you to keep a track of all your expenses and revenue flow from time to time for a given client or project. When it comes to claiming deductions, it is easier to report to the Tax authority or you would just need to furnish all the invoices to your accountant/tax advisor and various avenues for deduction and tax credits planning could be discovered.

#3 –Records for taxation

Like invoices, tax records are also essential to document, perhaps one of the most important documents as it creates a pool of taxes paid by a digital marketer. Maintaining these records is essential from year to year as the tax authorities may want to see your returns at any given point in time. Additionally, keeping complete tax records helps your accountant understand your current tax liabilities and missed returns if any.

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#4 – Bank Statements

In this digital era, we can access our bank accounts easily via app or website. As a digital marketer, make it a habit to download your statements every month and match the same with your accounts. If you face any challenge in reconciliation, then ask your accountant to assist you. Bank statements serve as a pool of financial information with respect to a business/ profession. The balances play an important role in determining your tax liability.

#5 – International Payments

Digital Marketers have the flexibility to work from any corner of the world. This means there can be international clients as well. A separate record needs to be maintained for income generated from international clients. Currently, if you are in UK and non-domiciled then you don’t pay taxes on income generated from foreign, provided it is less than £2,000 in a tax year, AND the income has NOT been transferred into a UK bank account. When the income gets transferred into the UK bank account, it falls under the general income tax band for the individual. For other countries’ residents, different local tax laws apply, I would suggest sending us an inquiry or contact your local accountant/tax advisor to answer specific queries.

The current era is dedicated to professionals. Just like digital marketers, accountants are also professionals who serve clients with tax planning, accounts auditing, return filing, and many other accounting-related services.

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