Whilst there are plenty of positive reasons why people decide to become a contractor such as a better work-life balance, more control over their career and to boost their earnings. The downside to being self-employed is that it can be very time consuming to manage and keep track of your finances and pay the relevant taxes. Many contractors choose to use contractor accountants to minimise the amount of administration they have to do, giving them more time to focus on their contract work.
Up to date on the latest industry legislation
Dedicated contractor accountants are extremely knowledgeable and experienced in giving expert advice on legislation and tax planning. A contractor accountant will be well-informed about the latest industry legislation and any changes that are likely to be coming. Therefore, you don’t have to worry about missing a deadline or falling foul of industry regulation which could incur a fine or penalty.
Specific Tax Legislation
A dedicated contractor accountant will understand how a contractor’s business should be run and the best way to structure the capital of a limited company in a legally tax-efficient way. They can offer tailored proactive tax planning and advice which is specific to your business and your circumstances. They will also be able to correctly advise you which expenses can be reimbursed.
The rules can often be quite complex regarding tax legislation, especially when it applies to contractors. IR35 legislation determines whether a contractor is a ‘disguised employee’ – somebody who is essentially an employee but still enjoys the tax benefits of contract work. Whether you are inside or outside of IR35, Churchill Knight can help you with your payroll.
Contractor accountants usually operate on a fixed fee basis with no extra charges. You will get unlimited proactive advice and assistance regarding tax, company finance and cash flow, depending on the level of service you choose. Having a single fixed fee payment for accountancy each month is beneficial to the management of business expenses and outgoings – to predict and manage your cash flow for the year. Additionally, regardless of what work the accountant is doing for you whether they are filing end-of-year returns or simple business accounting, the amount you pay for the service will not fluctuate dependant of the volume of work that is being done.
Every hour you spend doing your finances is an hour you could be spending doing contract work. Unless you have a lot of spare time on your hands, you will find that managing your finances will cut into the time you could spend on projects or doing the things you love.
As a contractor, your working hours may differ significantly each day depending on your current contract. You will find that keeping track of your finances and filing everything correctly can be extremely time-consuming. A contractor accountant will save you a lot of time as they will take care of all your invoicing, payroll and bookkeeping needs, leaving more time for you to focus on contracting and doing what you enjoy.
Contractor accountants have worked with many contractors like yourself and understand that being on hand to answer any queries instantly is important to contractors. Most contractor accounts will assign contractors to their own account manager who knows the business and is able to answer queries as quickly as possible.
When choosing a contractor accountant what should you look for?
Standard accountancy packages should include the following:
- Processing payroll
- Access to a dedicated accountant
- Assistance with all HMRC correspondence
- Assistance with quarterly VAT returns
- Bookkeeping support
- Completing annual company accounts
- VAT returns
- Corporation Tax returns
- Registration for PAYE, VAT and Corporation tax
However, there are packages available that include more or less support dependant on your business’ needs.
Speak to the experts at Churchill Knight
Churchill Knight & Associates has provided specialist accountancy services to over 20,000 contractors and freelancers all over the UK. Therefore, you can rest assured that your business and accountancy needs will be handled professionally and accurately by our team of experts.