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...]
You are here: Home | Guides | Limited Guides | Quick Guide to Contractor Limited Company Corporation Tax
A contractor has to pay tax and a contractor limited company has to pay tax - hopefully.
A director of a limited company has a duty in law to make as much money as possible for the company's shareholders. A business making a profit has to pay Corporation Tax (CT600), a contractor limited company falls under this tax regime.
Your limited company tax year is independent of the calendar year. Though both are 12 months, the limited company tax year doesn't have to start on 1st January.
Small limited companies pay less tax than large limited companies. Corporation Tax has to be paid nine months after the end of the limited company's year-end date.
If your contractor limited company has a year-end of June, then the tax is due by the end of April the next year. It's possible to pay bonuses, pay into a pension fund and make other payments to reduce your Corporation Tax.
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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.