Get paid faster. Stay organised. Stop chasing invoices.

Withholding tax is the thing nobody warns you about

Corporate clients deduct withholding tax from professional fees before they pay you. Invoice ₦1,000,000 and ₦950,000 arrives. That is not a discount and it is not lost — it is a prepayment against your eventual tax bill — but you only get the credit if you keep the withholding tax credit note the client issues.

Two consequences follow. First, price and plan cash flow on the net, because the gross is not what lands. Second, file every credit note the day it arrives; freelancers who lose them effectively pay the same tax twice, and the amounts across a year are not small.

You also declare the full invoice value as revenue, not the cash received. Declaring the net is the most common error in freelance self-assessment and it reads as under-declaration.

What you can deduct, and what you cannot

The test is whether a cost was incurred wholly, exclusively, necessarily and reasonably to earn the income. In practice, for independent work:

• Deductible: software subscriptions, professional indemnity cover, equipment used for the work, subcontractors you engage, client travel, the working share of data and phone, and training that maintains your existing skills.
• Partly deductible: home office costs and utilities, apportioned honestly by the share of space and time actually used for work.
• Not deductible: ordinary commuting, entertainment, clothing that is not protective, and anything you would have bought anyway.

Rent relief sits separately and is often missed: 20% of your residential rent, capped at ₦500,000, comes off your personal income as an individual — independent of any home office apportionment you claim as a business expense.

Billing foreign clients from Nigeria

Invoicing in dollars, pounds or euros is normal for Nigerian freelancers and it introduces two problems the naira-only version does not have. The exchange rate on the invoice date and the rate on the settlement date will differ, and that difference is a real gain or loss that belongs in your records rather than being quietly absorbed.

Exports of services are zero-rated for VAT, which matters if you ever cross the ₦25,000,000 registration threshold: you would charge 0% on foreign work while still being able to reclaim input VAT on your costs. Below the threshold none of it applies, which is where most freelancers sit and should probably stay.