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...]
Having a pension isn't just about saving for your future, its about paying less tax and national insurance right now. In a Nutshell -Less Tax Better Future
Pensions may make your eyes glaze over and send you into a trance, but think again and have another coffee - it's important.
Not only does a good pension look after your future, but it will also reduce your tax bill today. Pensions are one of the few real tax reducing breaks limited company contractors can take advantage of.
Take advantage of the tax laws that are in place right now. Some contractors, depending on where you sit within other employment legislation, can benefit by a whopping 48% in tax relief - so take a look at pensions with this in mind.
Not only are pension contributions outside the scope of employers and employees national insurance contributions, but for every £100 invested into your pension the taxman will contribute £48 meaning you only have to pay £52!
Because you are a contractor, rather than a full-time employee, your income doesn't always come in regular twelve monthly instalments. You need a pension provider that can be flexible with your earnings.
You need a pension scheme that allows you to increase or decrease your monthly premiums in line with your contract assignments. You may also want the ability to put a hold on monthly premiums or stop them completely. Oh, and you don't want to pay a set-up charge!
Avoid any pension company that doesn't have a solid trading history. Pension companies can come and go; this would cause you a real headache, to say the least. You want a reliable company looking after your future.
Not much in life can be 100% guaranteed, and the 2008 collapse of the economies of the developed nations testifies to that. But what you can do is to narrow your search down to those institutions which have the resources to weather even the most turbulent times.
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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.