A contractor?s guide to starting 2022 right
We can’t believe we’re saying this already, but we’re only days away from 2022. 2021 seems to have shot by in the blink of an eye (possibly because our brains are still hovering somewhere around March 2020) but we’re hopeful (cautiously optimistic) that 2022 will be a great year, with life returning to something a bit closer to normal.
For contractors, this means picking up more regular work and being able to plan ahead a bit more. But what can you do to make sure 2022 gets off to the right start? We’ve got some items for your to to-do list to get cracking on when you return to work after the Christmas break.
Get ready for the self-assessment deadline
The final self-assessment deadline for the 2020/21 tax year is 31st January 2022. Really, we hope you submitted it ages ago and are getting ready to pay anything owed (the first payment deadline of 2022 is also 31st January) but if you haven’t submitted it yet then the absolute first thing on your January to-do list should be to get it completed and away to HMRC. You’ll need your accounts for 2020/21, and details of your income and expenditure, but you’ll also need details of any taxable COVID support you received, such as any SEISS grants, as you will be asked about these. Be sure to get it submitted online before 31st January or else there’s a fine in it for you.
Oh, and maybe consider getting your 2021/22 tax return ready to go before 2022 ends…
Review your contractor rates
The new year is a great time to review your contractor rates. It may be that you want to increase them at the start of April, in line with the new tax year, but January is the perfect time to review them and make decisions so that you can start notifying clients. The steps you should take to make changes to your rates are:
– Do your research – Check the industry average for your role, and make adjustments based on your location, experience and level of demand.
– Test the waters – Before you roll out your new rates to existing clients, test reactions to them by pitching them to potential new clients.
– Notify existing clients – Give existing clients plenty of notice of your rate changes. If you’re planning on changing then in April, mid-February to early March would be a good time to let them know.
To help you further, we have a blog all about reviewing your rates packed with helpful tips and other considerations.
Review your savings
Perhaps you’re saving for something specific in 2022, or maybe your rainy day fund took a hit during the pandemic and you want to top it back up. It’s always worth reviewing your savings goals at the start of the year and make a plan as to how much you’d like to put away each month to achieve them. There are, of course, ways you can maximise your savings, regardless of how much you’re aiming for:
Use separate accounts – One for mortgage, bills, groceries etc., one for short-term savings, one for emergencies, and one for long-term savings. This is so you’re not dipping into your long-term savings when you fancy a weekend away or your boiler breaks down.
Set a savings budget – Decide on the amount you want to put into each account each month and then put it away before your other outgoings leave your bank.
Minimise expenditure – This may sound easier said than done, but it can be very simple. For instance, cut down on takeaways, make the most of sign-up and refer-a-friend offers, and give yourself a 24-hour cooling-off period before making any non-essential purchase.
You can find more information on maximising your savings on our blog.
Update your marketing
One important job for the start of the new year is updating your marketing materials, such as your website and social media platforms. Perhaps your photos could be updated, maybe you have some new skills or qualifications you should mention, or maybe there are a few broken links to fix or remove. A worthwhile task is to take time to read through all of your copy and make tweaks where necessary. For instance, if all of your copy says you have almost a decade of experience in your field, but 2022 marks your 10-year anniversary, then update your copy to say you have a decade of experience. Small changes like that can make all the difference.
Sort out your business insurance
Take some time to check your business insurances in January and see if any of it is coming up due for renewal so you can start looking around for the best deal. At the very least you need professional indemnity cover, public liability insurance and employers’ liability insurance, although it’s also worth having directors’ and officers’ liability cover and occupational personal accident cover. That way you’re giving yourself comprehensive protection against financial risks that could affect you.
If you don’t like shopping around for lots of individual products, you could always check out Kingsbridge’s contractor insurance package. It includes all of the above insurance products in one handy suite, saving you time and effort while giving you complete peace of mind – which is exactly how you want to enter 2022.