Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.
Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.
Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.
The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]
As a contractor you want to earn as much money as possible. Why else would you give up the security of working as a full-time employee of a company?
If you trade through your own limited company you can reduce your income tax and National Insurance contributions.
But not every contractor has the luxury of being able to do this. HMRC are very hot on the taxes temporary workers pay. You will only be able to benefit from trading through your own limited company if you pass the IR35 test.
If you can answer 'Yes' to these questions you should investigate setting up your own limited company.
All is not lost if you are caught by IR35. You can still be a contractor and you can still earn more money than a permanent employee.
You should investigate registering with an umbrella company. An umbrella company is simply a ready-made limited company used by contractors who are caught by IR35.
You can see if you fall Inside or Outside of IR35 using the IR35 Status Calculator
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It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.
Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].
Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.