Accountant for virtual assistants

Virtual assistance is a service trade. Your profit is the total of retainers, hourly work and project fees, less the costs of delivering them, and it is taxed through Self Assessment as self-employment.

Deductible costs are modest but real: scheduling and project management software, password managers, cloud storage and backups, accounting software, ICO registration, laptop and headset at the business proportion, professional indemnity insurance and the business share of home running costs.

Recharged client costs deserve a clear policy. If you buy a tool or run ads for a client on your card, show the cost as an expense and the recovery as income. Silent pass-throughs make your accounts look wrong and complicate VAT.

Sole trader profits carry Income Tax and Class 4 National Insurance. Retainers make income steadier than most freelance trades, which means a regular monthly tax reserve works well — usually a set percentage moved to a separate account on payday.

Employment status is the most common risk for VAs, because long retainers with one main client can start to resemble a job. Keeping several clients, controlling your own hours and retaining a right of substitution all support genuine self-employment.

VAT is often overlooked because profits are moderate, yet recharges and multiple retainers can push gross turnover past the threshold. We monitor the rolling 12-month figure so registration is a planned step, not a late discovery.

As a VA business grows into a small team, we look at subcontractor agreements, whether anyone has become an employee, and whether a limited company gives you a better structure for paying yourself and keeping working capital.

Source: Income Tax rates and allowances (gov.uk) · Self Assessment (gov.uk)