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...]
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Congratulations, you have the confidence and capability to fly solo. It take's determination and a good, diverse skillset to make a good contractor, you have what it takes... don't you? No one ever told you you would have to run your own company as well. Running your own company may seem like a nightmare but actually its the most rewarding way of contracting both financailly and in terms of self satisfaction. Information Resource for Contractors, Consultants and Freelancers - Contracting Through Your Own Limited Company
If you've decided to be a contractor and to trade through your own limited company, you will have a few tasks to complete prior to the start of your contract assignment. There will be a few forms to complete and and some tasks to get out of the way.
One of the most important things will be to appoint a specialist contractor limited company accountant. Unless you have a personal recommendation or experience it can be difficult to know how good they are from simply a search on the web.
In the first instance you need to set-up a limited company. You will also need a business bank account and insurance(s). Your limited company accountant will be able to help you with all this, as well as various other bits of obligatory administration and HMRC forms.
On a day-to-day basis you may find yourself spending money to keep your limited company going. If this is the case, you can claim this as an expense, and claim it back through your limited company. Here's a list of the things you can claim as expenses.
Unlike an employee who is on a salary, you will pay yourself a mixture of salary and dividends. The precise ratio between the two will depend on your specific circumstances. Your accountant will be able to advise you on the combination best suited to you.
Not only will you pay tax, but so will your limited company. Corporation Tax (CT) is one of the tax liabilities you will face. It's best to be prepared so as not to face any unexpected bills.
IR35 is legislation brought out by HMRC to stop contractors acting like 'disguised employees'. Whether you are caught by IR35 or not will affect how much tax you will end up paying. This guide will help you figure out whether you are in or out of IR35.
One of the key insurances you will have to consider is Professional Indemnity. This will cover you in the event your client takes a dislike to your work and decides to take you to court for negligence. It's really important and a 'must have' for contractors.
The good news is that Tempo Accounting do the hard work for you including setting up your limited company, providing an online tax and payroll system that blows the competition away, providing take home pay that far outstrips that provided by an umbrella company.
Tempo put you in charge of your money and guide you to ensure you get the best return on your earnings. Umbrella Companies have to pay PAYE and National Insurance, even if the figures and manipulated. With a Tempo accounting solution, you are guaranteed to be working within HMRC limited company legislation (so no umbrella company compliance concerns).
Tempo will always outperform the Umbrella market in terms of take home pay, Umbrella companies may claim they can provide high take home rates, tempo actually deliver. Call 02031 372 946 or click here to request a quote and call back to discuss your options.
More good news? Tempo also provide an umbrella company solution. Whilst they know that a limited company is your best option, they provide both solutions for great flexibility.
Go Umbrella and, if you later decide you want to Go Limited, Tempo will transfer you over at no extra cost. At last, a company that understands what contractors and freelancers need.
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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.