If you have tax questions, we have answers
As a contractor, you may find yourself asking the questions:
- Should you register for flat-rate VAT?
- Do you fully comply with IR35?
- Do you claim the £3,000 Employers National Insurance Allowance?
- How do you know which items are considered eligible expenses?
- Do you pay yourself a minimal salary?
In addition, there are a number of different taxes that you should be aware of:
- Corporation tax: these tax rates vary on the sum of profits and can range between 0% and 30%. Corporate tax is payable nine months after your year-end.
- Employer’s National Insurance contributions: this is a company related cost that is calculated as 13.8% of your gross salary and is paid monthly.
- Employee’s National Insurance contributions: you have to pay this tax if you earn more than £162 a week. The rate at which you are taxed amounts to 12% of your salary above £162 up to £892 per week, after this the tax rate drops to 2%.
- VAT: this is a standard rate of 20% VAT that you will add to your invoices to your clients. This VAT money is then collected by your company on behalf of HMRC and is accounted to them on a quarterly basis. When making the payment to HMRC, you can make claims for company purchases by deducting these costs from the overall VAT.
- Income tax: this tax is paid monthly and is deducted from your entire income as a whole.
- Capital gains tax: this is only applicable when you decide to close your company and make a capital distribution to yourself as a shareholder.
Each contractor is unique, so tax advice should be personalised and not one-size-fits-all. In essence, the goal is to minimise taxes so you have more money to invest in your business.
At Tax Agility, we specialise in providing contractors with end-to-end accounting services and personalised tax advice; from initial set up of your company to calculating your split of salary earnings and dividends to ensure tax efficiency – we focus on your specific circumstances in order to minimise your tax contributions. Call us today to arrange a complimentary, no obligation meeting.
At Tax Agility, we understand that as a contractor, completing various tax returns and meeting deadlines can be a stressful and daunting prospect. We have a specialist team of experienced accountants for contractors and tax advisors who can construct a strategic tax plan to suit your individual circumstances; making sure that you receive the right assistance, whether standard or specialist tax advice is required, every time.
Contractor Tax Services:
- Preparation and submission of all quarterly and annual Tax and VAT returns in conjunction with the Government’s new Making Tax Digital legislation via a digital cloud accounting platform.
- Strategic quarterly reviews to decide the most tax effective structure for your business in order to minimise tax liabilities and maximise your take-home pay.
- Advice regarding VAT, NI, employee and director benefit legislation.
- Management of your monthly payroll and all correspondence and paperwork from HMRC and Companies House.
- Unlimited guidance and support from a named individual in the team that is dedicated to supporting you and your business.
We manage all of your returns and general company administration through a choice of Packages to suit your needs. All our services are comprehensive and will save you time and money and our fees are fixed so you will only pay what has been agreed in advance – there are no hidden charges or unexpected bills at the end of the year. We can also prepare your personal tax return and submit your self-assessment tax return as part of our personal tax preparation services.
Important dates and deadlines
As a contractor, you are obliged to meet a few deadlines set by HMRC and this is something that our specialist contractor accountants can help. Please see the Important dates and deadlines for contractors page for more information.
We offer a first consultation for free to allow us to understand your circumstances and provide you with the best possible tax advice to maximise your take-home pay.
Call us now, regarding your taxation requirements, on 020 8108 0090 or complete the enquiry form and we will call you back.
Useful pages for contractors:
- Accountants for contractors
- The benefits of contracting
- Contractor companies explained
- Setting up a limited company
- Limited company management
- Choosing the right contractor accountant
- Setting-up and ongoing accounting packages for contractors
- Tax advice for contractors
- Important dates and deadlines for contractors
- IR35 explained