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...]
Part of being a contractor running your own limited company is to consider the future, and think about "It'll never happen to me."
If you have an accident or become ill and you cannot work, you won't be paid by your client - to be blunt. You have no grace period; you can't show up with a doctor's note after a couple of weeks and expect the client to be sympathetic.
You get paid when you work, no work no pay. This is the exact opposite of a permanent full-time member of staff who has the luxury of a sick pay safety net. They could be off work for months on end and still get paid.
Taking out insurance in the event of becoming so sick you cannot work for an extended period of time needs serious consideration. Don't play ostrich and ignore the question.
Yes, it will cost money but reducing your outgoings by not taking out pre-emptive insurance may well be a false economy. Paying a monthly premium today may well safeguard your standard of living tomorrow.
The monthly premium for permanent health insurance can be paid by you as an individual or by your limited company. As always there's a choice to be made, consider both the short and long-term.
Either your limited company can pay the monthly premiums, which would be tax deductible, or you as an individual can pay the premiums from your own pocket.
If you place a bet at the Bookies you can choose whether or not to pay tax at the time of placing the bet. If you do pay the tax and your horse comes in - the winnings are tax free. If you don't pay tax at the time of placing the bet, and your horse wins - you have to pay tax on the winnings.
The same principal applies to your insurance premiums. Pay the monthly premiums from your own pocket and should you call on the insurance because you fall ill - then you don't have to pay further tax on any pay-out.Pay the monthly premiums from your limited company and any insurance pay-outs will be taxed.
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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.