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...]
Some of the money you spend on your limited company is tax deductible - it can be exempt from being taxed.
Everyone's the same when it comes to expenses. The same tax rules apply whether you are running your own limited company or using the services of a contractor umbrella company. There aren't any special arrangements available.
If you're outside IR35 and contracting through your own limited company means you're likely to have more costs, therefore you're likely to be able claim more expenses. The system is meant to be equal and fair.
As a general rule of thumb, remember that claiming an expense is not a way to make a profit. The benefit of expenses is purely to ensure you are not out of pocket on actual business matters.
HMRC are very hot on all expenses claims and in particular have a keen eye on the contracting market. Simply play fair and you'll stay out of trouble.
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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.