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...]
In a nutshell, its Form-filling you'll like to do!
This is one form you'll enjoy being completed, because it's all about cash going from the limited company to your personal bank account.
My Limited Company LtdBurlington Business ParkHurlinghamYorkSW1A 1AA
The Board of Directors of MY LIMITED COMPANY met at BURLINGTON BUSINESS PARK, HURLINGHAM, YORK, SW1A 1AA on 1 MAY 2013 and declared an interim dividend of £10,000 per Ordinary Share in respect the financial year ended 1 APRIL 2013 payable to shareholders registered at the close of business on 1 MAY 2013.
EDWARD SCISSORS (Shareholder Name)15 Cutting WayBoscombeDevonDD3 4ST
No. of ORDINARY SHARES: 1
DIVIDEND PAYMENT: £10,000
TAX CREDIT: Dividend income at or below the £150,000 higher rate tax limit 32.5%
Limited Company Director
When your limited company makes a profit you access the money by way of a dividend(s) paid to the shareholder(s). The dividend must be recorded in the company's board meeting minutes and presented in the form of a dividend voucher for each shareholder.
A shareholder(s) must keep the dividend voucher for future self-assessment reasons. This document is legal evidence that a dividend has been paid to the named shareholder.
Your contractor accountant will draw up the dividend voucher for you. The accountant will also write a minute that advises a dividend has been paid to the shareholder(s).
The board minute will be brief and factually record that a dividend of X for each ordinary share for the given period was paid on a specified date.
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If you are or plan to be a freelance contractor, you must get to grips with IR35. Ignore IR35 and it could cost you thousands!
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.