When is the best time to start being self-employed? 

You've been thinking about becoming self-employed for months, maybe even years. And you finally made up your mind: you're going for it! But when is the best time to start? And does the start date have an impact on your revenue, taxes, or other obligations?

Choosing the start date for your sole proprietorship

For a sole proprietorship, there's no ideal tax-related date to start. With this status, you’re simply a natural person, not a legal entity, so the tax obligations are essentially the same as those of an employee.

If you become self-employed in the middle of the year and were previously an employee, your income as an employee and your income from your self-employed activity will be added together for the calculation of your personal income tax.

Be careful with your social contributions

Before you rush to your business counter, be aware that your social contributions might make you think twice about your start date. If you’re not entitled to an exemption, you’ll have to pay the contributions for the quarter in which you start – even if you register as self-employed on the last day of that quarter. To get the most out of your social charges, it's therefore better to start your sole proprietorship at the beginning of a quarter.

What about being able to deduct expenses?

Expenses you incurred up to three months before starting your business can be deducted from your revenue. This is the case even if you were employed during that period. For example:

You became self-employed on 1 January 2024. Any professional expenses you incurred in October, November, and December 2023 can be deducted from your 2024 revenue.

Is the start date important for VAT deduction?

As a self-employed person who is liable for VAT, you can deduct the VAT amount you pay on professional purchases from the VAT amount you declare and pay to the VAT administration. Your start date isn’t important here. You can still claim VAT in a subsequent quarter. 

For example:

You become self-employed in July 2024 (3rd quarter). In May 2024 (2nd quarter), you bought a computer for your business. You can offset the VAT on that purchase in your VAT declaration for the 3rd quarter of 2024 (July, August, September).

⚠️ Note: To deduct VAT, your VAT number needs to be on the invoice. Invoices issued before you started your business will therefore need to be adjusted later to include your VAT number.

Start date of your business vs the start of your accounting year

The accounting year is the period covered by your business's financial accounts. For a sole proprietorship, the accounting year always coincides with the calendar year, from January to December. So here too, your start date is not important. If you started your business in July 2024, you would have had half an accounting year in 2024 and your next accounting year would have started on 1 January 2025.

In summary?

You can become self-employed at any time without it adversely affecting your taxes, VAT declaration, or deduction of expenses. However, you need to be careful with social contributions, as you pay these for every quarter in which you are active as a self-employed person. Unless you have an exemption, it makes most sense to start your sole proprietorship at the beginning of a quarter.

Ready to start? The first step is to contact a business counter. They’ll help you get registered in the Crossroads Bank for Enterprises.

Author - Valesca Wilms

As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.

Who is Valesca ?