What every Limited Company contractor should know about the Personal Savings Allowance

Personal Savings Allowance

 

6 April 2016 was a big day for Limited Company contractors, with many new changes affecting their everyday professional lives. One of these changes was the introduction of a new Personal Savings Allowance (PSA) which will see around 95% of taxpayers no longer having to pay any tax whatsoever on their savings income, such as interest.

 

So what does this mean for Limited Company contractors? In this blog, our Director of Operations, Laura Hepworth, explores how you’re affected, what you need to know and how to make the most from the new PSA.

 

Back to basics – what is the PSA?

The PSA was introduced by the Government to reduce the amount of tax paid on people’s personal savings income. In short it means that any savings earned in building societies, banks, NS&I products company bonds and credit unions won’t be taxed up to a certain limit.

 

This is, however, decided upon depending on whether you are a basic, higher or additional rate taxpayer.

 

Basic rate taxpayers that earn up to £43,000 per year (20%), are able to earn up to a maximum of £1,000 of savings income before any tax is due. Higher rate taxpayers that earn up to £150,000 per year (40%), are able to earn up to £500 of savings income. Unfortunately if you are an additional rate taxpayer, then the allowance it not available to you.

 

How does the PSA work?

For basic rate taxpayers, banks and building societies used to deduct income tax from the interest earned on accounts (not including ISAs) at a flat rate of 20%. Higher rate taxpayers would see the additional 20% collected through their PAYE code, or when submitting a self assessment tax return. Additional rate taxpayers would have to inform HMRC of how much savings income they’d accumulated through a self assessment tax return, where they’d then pay the additional 25%.

 

Now it’s a much simpler system. Banks and building societies no longer take the flat rate income tax (20%) from the interest earned and instead they pay you gross and report interest details directly to HMRC.

 

More trust has been bestowed upon PAYE codes, as HMRC believes this new method will allow people’s tax codes to be identified by the amount of savings income they have earnt in previous years.

 

Whilst this is good news for those who’s tax code will be adjusted to now include tax free savings, for others who do not receive an income but do generate a savings income, will be expected to submit a tax return.

 

What happens when you exceed your PSA?

Your PAYE tax code will automatically be adjusted and HMRC will deduct any owed tax from your take home pay.

 

Should you exceed your PSA limit, you don’t have to wait until HMRC adjusts your code, you can notify them whenever.

 

Does the PSA have an effect on the £5,000 dividend allowance or existing ISAs?

Good news! As the dividend allowance is separate, it’s not affected. Existing ISAs are tax-free and are therefore also not affected.

 

What happens when you have a joint account?

Should you have a joint account, then both of you will receive a PSA. If one of you is a basic rate taxpayer and the other a higher rate taxpayer, then as a duo you will receive a PSA of £1,000 and £500 respectively.

 

How are multiple accounts affected?

HMRC will cross-reference all of the information they gather from each of the banks or building societies you hold accounts with, to understand your tax code and the amount of tax due.

 

How do monthly cashback / reward schemes affect PSAs?

The PSA includes savings income and interest, but it’s worth understanding that not all banks and building societies are considered as ‘savings income’. For example, if you receive a monthly monetary reward (such as a cash bonus for using a specific banking provider) then this is classed as ‘annual payments’ and are therefore not covered by PSA. So in HMRC’s eyes this means that annual payments are subject to tax.

 

If you’re not a taxpayer, you’re able to claim back the tax by using an R40 form and returning it back to HMRC.

 

How is the interest paid on PPI and other compensation payments treated?

Tax is still required to be taken from any compensation interest paid, as it’s not considered to be part of PSA. Whilst this is the case, you may still be able to claim back the tax by completing an R40 and returning it to HMRC.

 

Final thoughts

PSAs can sometimes be confusing, that’s why it’s always useful to have an unlimited source of expert advice at your fingertips. As an Intouch Accounting client, your Personal Accountant is on hand to guide you through the sometimes confusing world of contracting, to ensure you get the best and the most from your career.

 

Speak to our team today about the tailored, specialist advice and guidance we can offer you, to help you achieve your Limited Company contracting goals.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Brexit: tax implications for contractors

Tax implications for contractors

Seven weeks after the EU Referendum vote and there has been little clarity on what will happen, when and by whom! In fact, until Article 50 is triggered, sparking the start of exit negotiations, we’re likely to remain in a haze of uncertainty at least until the Autumn. Our own political parties need to get their houses back in order before they can start divorce proceedings.

 

But a lot of people, understandably, are not keen on playing the waiting game and want at least some idea of what the future holds, now. Here we take a look at what Brexit is likely to mean for contractors and their taxes in the short-, medium- and longer-term. Before we get started, it’s important to stress that even once Article 50 is triggered it’ll be at least another two years until changes come into effect, following what will undoubtedly be complicated negotiations between UK and EU officials. Until that time, existing arrangements will remain in play.

 

In the short-term

Many in the accounting world expected progress to kick start on the Making Tax Digital consultations following a remain outcome. It now seems likely this will slip far down the priority list, unlikely to reemerge at least until a new Cabinet is in place. Any delay in progressing this already unpopular proposal will be music to many contractors’ ears.

 

With the Finance bill 2016 already behind schedule, further delays seem inevitable meaning a delay in the Finance Act due to be passed in October, while the Government sorts itself out.

 

There are already 40 pieces of tax legislation which have been already delayed during the Referendum so these will now be reactivated with a view to most coming into force later this year and early next.

 

One thing we can be pretty certain on, is that an emergency Budget will be held before the year is out.

 

In the medium-term

If the emergency Budget follows the blueprint which Osborne forecast when he was Chancellor during the Referendum campaign, then we can expect £15bn of tax rises and £15bn of spending cuts. If this does happen, we’re likely to see rises in income tax and National Insurance, with the campaign forecast suggesting a 2 pence rise in the basic rate of income tax; a 3 pence rise in the higher rate and a 5% inheritance tax rate to 45p.

 

As an incentive to companies to stay in the UK, it is expected that the rate of corporation tax will probably not increase.

 

There are two key guiding principles relating to the application of taxes within the UK:

1. Direct taxes are imposed by UK law but in accordance with EU law.

2. VAT is imposed and operated in accordance with EU law.

 

So for the next two years nothing can change relating to VAT without complying with the existing EU arrangements.

 

In the long-term

During the transition period (which is likely to continue to late 2018), VAT – like all the other tax and regulation tied to European law – won’t change. Despite the Leave campaign’s promise to cut VAT rates on domestic fuel, this is unlikely to happen in reality as it generates £115bn a year for the UK government. We may even see VAT rates increasing as it is easy to implement the change and is a more straightforward way to boost the government’s coffers.

 

Once fully out of the EU, sales going in and out of the UK will be treated as imports and exports and so subject to different VAT treatments to now, where they are considered as intra-EU movements. VAT on expenses incurred in other EU countries will probably be more difficult to recover.

 

For UK businesses selling digital services in the EU, VAT MOSS will continue to apply but on a non-EU basis, meaning the operation of VAT-MOSS is likely to become more complicated.

 

Since the decision was made to exit it has come to light that the UK and EU have disagreed on several occasions over the scope and operation of UK taxes including patent box, changes to the taxation of controlled foreign companies, differential rates of insurance premium tax and capital duty.

 

Once out of the EU, the powers in London, Edinburgh and Belfast will dictate tax rates and structures according to the UK’s needs and subject to whatever settlement is made with Europe. It is also anticipated that more tax incentives will be introduced to encourage investment in the UK as we break away from needing to seek EU approval on issues concerning R&D credits, the patent box, and executive investment schemes.

 

At Intouch we will, of course, be keeping a keen eye on developments and advising our clients on how to get the best from their Limited Company. To benefit from unlimited advice whenever you need it, sign up to our all inclusive monthly service and rest assured that we’re here for you, whatever the future holds.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Dividend changes are coming…..be prepared!

Dividend changes are coming

For Limited Company contractors, it’s all change with dividends come April 6. The need to gross up a dividend will be withdrawn, meaning the amount you receive is the amount you will be taxed on. Your dividends will instead be subject to a new dividend tax.

 

But what is this tax and how will it affect you?

In this blog our Director of Accounting and Tax, Janna Beeching takes a deeper look into what’s to come and more importantly, what you can do before April 6 to minimise the impact on you and your business.

 

The new dividend tax

The first £5,000 of dividends will be taxed at a nil rate, and will therefore be tax free. Subsequent dividends will be taxed at 7.5% where they are within the basic rate tax band, 32.5% for those in the higher rate band and 38.1% for those in the additional rate band.

 

The new rules will increase the amount of tax payable above the nil rate compared with 2015/16, but there are opportunities to mitigate this.

 

Dividend paperwork

A dividend can be challenged by HMRC if the proper paperwork is not in place. This could mean that a dividend is treated as salary or loan. The paperwork is very simple and consists of a Director’s Resolution and a dividend voucher. Templates should be easily obtainable from your accountant.

 

Director’s loans (current account)

If you are owed money from your company it may be better to take a repayment from the company rather than dividends that are taxable at higher rates of income tax. But, for 2016/2017, the new dividend tax rules (above) means that you should consider this carefully.

If your loan remains outstanding more than nine months after the end of the company’s accounting period you will incur a tax charge. Taking loans should be carefully managed to avoid unnecessary or unforeseen tax liabilities.

Post 6 April 2016, loans are likely to become more frequently part of your income planning. Talk to your accountant to understand why.

 

So what should you do now to prepare?

Consider dividends before 6 April 2016. Careful planning now to make use of the allowances and basic rate band will maximise the dividends that can be paid before 6 April. This might offer the opportunity to accelerate a dividend before the new tax comes into effect.

 

What all contractors should be doing is looking at how their company is structured and whether or not there are missed opportunities to have different classes of shares or additional shareholders to minimise the tax you pay.

 

Your accountant can discuss these matters with you. Here at Intouch we offer a personal assessment to identify whether opportunities exists for you. We offer services for clients and non-clients so please contact us for more information and a fixed price.

 

For a more comprehensive understanding of what’s to come for dividends, download our free ebrief: Changes to dividends: what do they mean for you?

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

The contractor’s Christmas wishlist

The contractor’s Christmas wishlist

It’s the end of another year and no doubt you’re planning what gifts to buy your loved ones for the big day. But hey, it’s not all about them! You’ve worked hard all year on your contracts, kept your business website up to date and read all of our ebriefs, so why not check out these cool new gadgets for contractors and treat yourself to something rather special. From digital dummies to brainwave reading headbands and gadgets that let you exercise your pet when you’re not even home, there really is something for every contractor.

 

One for the contracting mums and dads Pacif-i

If you’re working from home and you’ve got a little one to look after, then this gadget is for you. Sometimes the urge to keep checking on them can really break up your working day and worrying about their schedule and wellbeing can be detrimental to yours. Imagine if there was a way you could tell how your baby is doing by simply looking at your smartphone…

Those clever people at Blue Maestro have created a dummy that does just that! The Pacif-i can monitor your little one’s temperature, record medication levels and their whereabouts and displays all this information to you on your smartphone. So no more constant check ups getting in the way of your working day, as your smartphone will be able to tell you everything you need to know!

 

If you hate leaving your pets at home when you go to work pet cube

 

Then the Petcube can alleviate your heartache. By downloading the app and setting up the Petcube at home, it allows you to communicate with them and the built-in camera will keep an eye on your furry friends when you’re not around.

 

If they’re misbehaving you can use the app to tell them off (and they’ll hear you) or if you want them to hear your voice you can talk to them directly through your phone. If they look bored or need some mid-day stimulation, then you can control a laser that they chase around. Finally the app can be shared with your friends and family, so they can help out with checking in and keeping your pets happy. A great gift for pet loving contractors.

 

Desk dwellers with bad backs valedo

 

If like us, you spend the majority of your working day sitting at a desk, then you’re bound to think about the health of your back. If pilates and yoga aren’t really your thing, then Valedo have come up with an ingenious way of conditioning your back.

 

By attaching two sensors to your body and downloading the app to your smartphone or tablet, you simply follow a number of therapies that combine therapeutic exercises with motivating games. In these games you’ll be taken through a series of movements designed to strengthen your back and improve posture. It also records your progress and suggests exercises that will improve your overall back health. A must-have gadget for those of us who sit at desks for longer than we should.

 

Watering your plants The Power Flower Parrot

 

If your new contract requires you to go overseas, how do you ensure your plants are still alive when you return?

 

The Power Flower Parrot can do just that! It’s a nifty little gadget that you screw a standard water bottle into, then pop into the soil of your most beloved plant. Once you’ve downloaded the Parrot app and synced it to the plant type, the Parrot gadget alerts you if your plant needs watering, more sunlight, more warmth / cold or soil moisture. It will even allow the water from the bottle to drip into the pot’s soil when your plant needs watering, so you can rest assured that it’s being well taken care of.

 

Hard day contracting? muse

Then it’s time to chill out. If at the end of the day your mind is racing at a million miles an hour, then some meditation could really help. Muse have developed this fantastic headband that uses electroencephalography (EEG), which records electrical activity of the brain. You sync the headband with their app on your smartphone or tablet, then simply plug in your headphones and listen to the music. The headband reads your brainwaves and adjusts the sounds you’re hearing to your current mood, to help sooth and relax you.

 

A lot of professional people swear by it and have said how just three minutes a day can provide them with complete clarity and calm.

Final thoughts

So whilst Christmas is a time for giving, remember to treat yourself to something that will help make your contracting life that little bit easier in 2016. Or if you’re really lucky, someone else will treat you!

 

If you’re currently doing your accounts by yourself, one way you can certainly free up your time in 2016 is by letting a trusted contractor accountant manage your accounts. If you’re considering the move and need to talk to someone about your circumstances, give our team a call on 01202 375 562 or email us at enquiries@intouchaccounting.com

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information.  This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Supervision, direction or control (SDC)

Supervision, direction or control (SDC)

Announcements in the Summer Budget 2015 shook the contracting world, with particular focus on supervision, direction or control (SDC). It’s now key to the proposals used in the consultation to revise Travel and Subsistence and in the discussion document on revisions to IR35. SDC is clearly becoming the key focus for HMRC in its battle against false self employment and will become the three words that every contractor will very soon need to be aware of.

 

How can you get up to speed with SDC?

In our latest ebrief: Supervision, direction or control we investigate:

  • what SDC actually is
  • what HMRC’s view of the world is
  • where, when, what, who and how
  • what happens if you are caught by HMRC

 

By understanding what supervision, direction or control is you’ll be fully prepared for the changes set to come.

SDC will have an effect on all of your future contracts and the way in which you contract, so why not prepare yourself now? Download our guide today.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Thinking of contracting or freelancing? Which trading model is right for you?

Limited, Umbrella or Sole Trader?

Are you thinking about making the move away from permanent employment to set up as a contractor? Sole Trader, an Umbrella or Limited Company? What’s the difference and which is best for you?

Read this blog to get to know your choices, then download our comprehensive guide to help you weigh up:

  • the things you need to consider
  • your options
  • the associated advantages and disadvantages
  • next steps.

Or give us a call on 01202 375 491 to chat through your options.

 

Why bother?

With the country’s top contractors reportedly earning around three times the average UK wage, why aren’t all permanent staff taking the leap into contracting? One reason may be the confusion surrounding available options. Our following example shows you how the options can affect a professional who is considering leaving permanent employment, and how certain factors can determine what is the right path for him to take.

 

Meet Peter

Peter works in IT and has been a permanent employee for 15 years. A few of his friends have recently told him about the benefits of moving away from permanent employment, and naturally Peter is curious, but unsure of his options. A friend advises him that he needs to establish if he should be a freelancer or contractor and how he will operate: as a Sole Trader; under an Umbrella; or as a Limited Company. These decisions are important, as they will have an effect on how he will pay the relevant tax due to HMRC in the future. What is right for Peter’s friend may not be right for Peter’s personal circumstances so he needs to make sure he is clear on what his options are.

So let’s take a look at each, and which solution will work best for Peter:

Freelancer or contractor?

Freelancer

While researching the marketplace, Peter finds a number of ad hoc jobs which are task-specific, and would not be extended once the work has been completed. For a number of these jobs he could complete them either in the client’s workplace, or from his home office. He could take on as many jobs as he likes from numerous clients, simultaneously, charging an hourly rate.

In this instance Peter would be a freelancer – an option popular among consultants, creatives and journalists.

Contractor

Peter continues researching the market and finds work with a third party employer, whom he will work for exclusively for a fixed period of time. He will be paid a daily rate, and travel to the office each day to work a set number of hours. The contract can end or be extended at any point, and Peter could expect to earn approximately £600 per day.

As Peter will solely be working for this one client for the duration of the contract, he would be considered to be a contractor.

As Peter works in IT, being a contractor is a more viable option for him.

Now Peter has established what type of worker he is, he needs to select the right trading model for his situation.

Sole Trader vs Umbrella vs Limited Company

Peter now needs to decide how he is going to operate: as a Sole Trader; under an Umbrella; or as a Limited Company. These are the three most popular options for for knowledge-based, highly skilled workers earning well above the National Minimum Wage but are dependent on what solution suits an individual best, their daily rate and how they wish to operate:

Sole Trader: is a person who wishes to be the exclusive owner of the business, and is therefore entitled to keep all profits, after tax. A freelancer traditionally would consider themselves to be a Sole Trader, or self-employed. They are also liable for all losses so if the contracting business gets into financial trouble, the Sole Trader is personally liable and their private assets could be at risk. It is unlikely that an agency would take him on this basis and very few clients would allow this model so it is therefore impractical. For this reason being a Sole Trader isn’t the best option for Peter.

Umbrella: is a company which acts, for a fee, as an employer for a contractor who will have an agreed fixed-term contract. Traditionally contractors earning less than £30,000pa or who are new to contracting and are just dipping their toe in the water to see if it is the right option for them, are recommended to consider using an Umbrella company. Intouch do not offer Umbrella services, so we suggest carefully researching compliant companies offering this service and choosing one based on your personal preferences and requirements.

If Peter was earning less than the £30,000pa (on average £125 per day) or didn’t want the added responsibilities which come with running a Limited Company, then an Umbrella company solution would be best for him. He should also consider working under an Umbrella if contracting is just a short-term option for him and he doesn’t anticipate it lasting for more that 6-9 months in total.  But, as Peter is in this for the long-haul and charges a higher daily rate, he is confident he can run his own company.

Limited Company: is for a contractor or freelancer who is earning on average over £30,000pa. This is just a guide and setting up as a Limited Company can also potentially benefit those expecting to earn less than £20,000 in some cases, so if this applies check with a professional contractor accountant to ensure you get the best advice and choose the right option for you.

A Limited Company ultimately allows a contractor to take the highest rate of take-home pay and be your own boss, but there are a number of considerations and responsibilities which must first be explored, and subsequently be adhered to. Engaging the services of a reputable contractor accountant means that they should guide Peter from the offset so he is fully aware of his responsibilities and obligations. The added benefit is that often the tax savings realised with the advice of a contractor accountant out-weigh the costs as professional fees are tax deductible and, of course, Umbrella companies also charge a fee or percentage for their services (which is often more expensive). If, as expected,  Peter will earn £600 a day as a contractor, and is comfortable with the responsibilities, then he would be better suited to set up his own Limited Company. Using our free take home pay calculator Peter can compare take home pay based on several stated assumptions. He can input his personal contract income and contractor expenses to instantly see the difference being Limited makes.

There are other things to consider, from creating a company name and formation, to setting up a business bank account but working with a specialist contractor accountant such as Intouch Accounting means a lot of that is taken care of as part of our fixed monthly fee.

So once Peter has made his mind up about which solution works best for him and how he will operate, he is ready to make the move!

What’s next for you?

To help you think through your options we have written a new guide for contractors and freelancers: Limited Company, Umbrella, or Sole Trader – which is the right choice for you? available for you to download now.

Or contact us for a no obligation discussion to work through your options.

Intouch can help you

If the prospect of going contracting is still daunting and you are not sure where to go from here, or just need a chat with one of our experts, give us a call on 01202 375491  and we will happily discuss your situation and options with you. We are renowned with our existing clients for our dedicated service and account management, and we’re happy to take your call and assist you on this exciting new venture!

Call 01202 375 491

Email enquiries@intouchaccounting.com

Download our guide

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

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Contractor’s house of horrors

Don’t let the house of horrors spook you!

Forget The Shining, American Psycho or The Exorcist, sometimes the worries that contracting can cause can be far scarier! But fear not, Intouch Accounting are here to help guide you through each and every process, without the sleepless nights, or worrying if the Taxman is hiding under your bed…

 

Let’s take a look at some of the main concerns Limited Company contractors have and see why they’re not so scary after all:

 

IR35

Whether you’re a seasoned contractor or just starting out, IR35 should always be a consideration when starting a new contract. Whilst you should never let it stop you from contracting, it is something you need to understand and have respect for. Our clients don’t need to worry, as our monthly all inclusive service fee of £98 +VAT includes unlimited IR35 contract risk assessments.

 

Don’t let the fear of ‘what if’ stop you from contracting! In our ebrief: IR35 – the proposed changes we outline exactly what IR35 is, how it could affect you and the proposed changes for April 2016.

 

Claiming expenses

Do you worry about claiming for business expenses, for fear of not remaining compliant? Or do you hold back from purchasing equipment that you need for business, in case you can’t claim for it? Your contractor accountant will be able to give you advice on what you can and can’t claim. Intouch clients can ask their Personal Accountant about claiming expenses whenever they wish.

 

The ways in which you can claim for expenses will change in April 2016. Don’t wait until then; download our ebrief to get up to speed now.

 

HMRC Investigations

Probably one of the scariest things a contractor can face is a dreaded letter from HMRC announcing an investigation! You’re bound to feel some apprehension if you do receive one.

 

Intouch clients can stay cool as a cucumber, as professional fee protection service is included within their monthly fee. That means that if HMRC do decide to investigate them, they’re covered for up to £75,000 of accountancy fees per claim and don’t have to worry about the time or money it will cost. They simply forward their letter onto their Personal Accountant and they will do the rest! Wondering what the other benefits of fee protection service are and why you need it? Take a look at our blog.

 

Travel and Subsistence (T&S)

You’re probably going to have to travel to your client’s offices and that costs money. And what about the other possible expenses you’ll incur, like hotel rooms or food? These worries could put you off taking a contract, especially if you think it’s going to cost you an arm and leg.

 

Don’t panic! Whilst T&S can be a complex area to get your head around, your Personal Accountant will be able to guide you on what you can claim and the best way to do so. Like expenses, the way in which you can claim for T&S will change in April 2016. Take a look at our ebrief to get up to speed with the proposals HMRC are suggesting.

 

Just Starting Out

Considering contracting or have just started out and worried about what’s lurking behind every corner? We appreciate how daunting it can be when you’re new to the contracting game, but by having the right support behind you it can turn from a nightmare into a dream.

 

Why not take a look at the Contractor UK Forum, where you can ask other like-minded contractors questions and get a feel for what it’s like when contracting. If there are other topics you’ve heard of and want to find out more, or simply want access to a whole host of contractor resources, take a look around our website for useful videos and blogs.

 

Don’t let the thought of contracting spook you! Intouch Accounting are here to help you on your journey, by ensuring that you are able to face each challenge confidently and compliantly. Give our team a call on 01202 375 562 to discuss any aspect of contracting and to get you started.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

How to avoid time between contracts

How to avoid time between contracts

As all contractors know, having a steady stream of contracting jobs is essential to keep the flow of money coming in. The length of individual contracts can vary widely and there can be opportunities for extensions, so in some cases a contractor could be with the same client for quite a while. Nonetheless at some point the contract will end and a new contracting role will need to be found.  If you’re keen to work constantly, with back-to-back contracts throughout the year, there are a number of things you can do to ensure that you’re aware of opportunities and are more able to match your availability to roles as they come up.

Let recruiters and contacts know when you’ll be available

It’s quite common when you’re in the middle of a contract to be so focused on the work in hand that you forget to plan ahead. However, if you know that a contract is not likely to be extended, as the end date comes closer it’s helpful to update your CV and online profiles to show when you’ll be next be available. If you have agency and other contacts it’s also worth contacting them as they may not be aware that your current contract is about to end and don’t rely on your current agent alone.   It is unlikely that they will be monitoring the end of the contract they placed you on. Recruiters are focused on current vacancies and candidates who can join immediately and so may not be aware of those whose contract is coming to an end. If you leave things until the very end of your contract you’re more likely to have gaps between jobs as the process of finding your next contract, interviewing and starting could take a week or two, or even longer.

Explore other options with your current client organisation

In larger organisations there may be opportunities in other areas of the business. Different departments within a business may need your skills so it’s worth finding out what’s going on elsewhere in the organisation. You could make contact with other departments either directly, or through your agency, whichever is appropriate. Generally clients like to have contractors who are familiar with their business, so if you’re already working for them it can give you a real head start. Even if this approach doesn’t produce an immediate opportunity, it’s still worth exploring as it may produce something in the future.

Keep an eye on job boards

It’s possible to set up daily or weekly email alerts which list the latest jobs which meet your criteria. This is an easy way to keep up with what’s available and often these roles have slightly longer lead times so you can realistically pursue them while you’re still in your current contract. Agencies often advertise roles in this way, so it can be a good way of connecting with them too which may also open up new prospects.

Maintain relationships with your contacts

Keeping in touch with people you’ve formed good business relationships with is always worth investing time in. Whether you do this via platforms like LinkedIn, through phone calls or face-to-face catch up meetings and networking will depend on your schedule. Do factor this in though as it’s an essential part of your personal marketing. Keeping these contacts up to date with your projects and availability can potentially lead to contracting work and of course is also a good way to keep up purely socially with your peers and clients.

It’s a good idea to schedule some time in your weekly routine to search for potential contracts, update your CV and profiles and keep up with your contacts. This way you’ll be aware of what’s available as well as being visible to potential recruiters. This approach should help keep the contracting work – and the income – rolling in.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Changes to dividends – how will you be affected?

Changes to dividends

Announcements made in the Summer Budget mean that April 2016 will be an important period of change for Limited Company contractors. The current Dividend Tax Credit will be replaced with the new Tax-free Dividend Allowance and the headline rates of dividend tax are also changing. If you currently receive dividend payments or are considering doing so in the future, then you will be affected.

 

How should you prepare for these changes?

In our latest ebrief: Changes to dividends: what do they mean for you we explore:

  • what is a dividend?
  • the new dividend allowance
  • how dividends will be taxed
  • if pensions and ISAs will be affected
  • what your options are when taking dividends before and after April 2016
  • why these changes are happening

 

Knowing what’s just around the corner and how to prepare for it can ensure you’re in the best position come April 2016. Make sure you fully understand how these changes will affect you by downloading our latest ebrief.

 

Make the most of your dividends, be clear on where you stand.

 

When it comes to understanding the changes surrounding dividends, it’s wise to seek guidance and expertise from a contractor accountancy. Call us on 01202 375 562 to speak to one of our advisers now about the unlimited support our clients receive when new HMRC changes are announced and beyond!

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Limited Company contractors! Are you getting what you deserve from your contractor accountant?

Are you getting what you deserve from your contractor accountant?

As a busy contractor you need an accounting service that can seamlessly manage your accounts, whilst keeping an eye open for opportunities for you to get more from your company. Maximising your take home pay is probably one of the main reasons you decided to go Limited, and so the supplier you’ve entrusted to manage your accounts should always be there for you, ensuring that the service you receive is second to none.

Is your current accountant letting you down?

If you recognise any of the following in  your current accountant, it’’s a good idea to shop around:

  • You speak to someone different each time when trying to discuss your accounts
  • You get generic answers that aren’t tailored to your circumstances
  • You’re provided with confusing or misleading information
  • You’re paying a premium rate for a substandard service
  • You get charged for hidden extras
  • Your documents to HMRC or Companies House aren’t provided on time
  • You feel that you’re managing your accountant, rather than them managing your accounts

 

Your trusted contractor accountant should help you free up your time to do what you do best,  not take up more of your time by making you worry about your accounts.

Are all opportunities being explored?

A good accountant should always be helping you maximise the opportunities that are available to you, keeping your best interests at the forefront of everything they do. From HMRC’S upcoming changes in the ways travel and subsistence claims will affect you, to what you can do to ensure your expenses are genuine and compliant, your accountant should not only be managing your day to day accounts but also your future wellbeing.

Intouch’s Accounting’s role for freelancers and contractors

Our role is to make your life easier, by providing you with a personal service that not only includes 24 hour access to time saving technology developed specifically for contractors, but also great advice direct from your dedicated accountant. You can wave goodbye to all the negative experiences you’ve had with your current accountancy, as we can ensure that the direct line to your Personal Accountant is there from the moment you join us. With a wealth of knowledge from an accounting team that has an in-depth history of working with Limited Company contractors from a whole range of industries, you can rest assured knowing that your accounts are in the best possible hands.

What you’ll get from Intouch

For an all-inclusive monthly fixed fee of £98+VAT you’ll get all the help and guidance you need to run your Limited Company smoothly:

  •        Unlimited advice from your Personal Accountant, tailored to your circumstances
  •         A dedicated personal accounting team to ensure consistency in our service to you
  •         24/7 access to our easy-to-use Cloud-based portal, built specifically for contractors
  •         Real-time information so you know where you are at all times
  •         Clear and timely communications to keep you on track throughout the year
  •         As many free IR35 contract risk assessments as you require
  •         No question is too small or too big! Your appointed Intouch team are here to guide you and answer any questions you may have

What’s involved in switching

Changing accountant is easier and quicker than you may think. Once you’ve appointed us, we will notify your current accountant and obtain all of the required handover information, meaning that you won’t have to worry about any difficult conversations or obtaining paperwork.

We do what we can to make the cost of switching over to us as efficient for you as possible. Our switcher fee calculator will determine whether any fees will apply to you. We see the value of our relationship with you in the future and not in the past, and that’s why we can guarantee at least a 25% saving on switcher fees.

Still not sure if Intouch is for you?

We’re confident that when you switch to Intouch it’ll be the last time you appoint a new contractor accountant. If you’re still a little unsure take a look at why our clients have chosen Intouch, or download our free guide to help you decide which accountant is right for you.

Ready to make the move? Call us on 01202  901 186 to speak to a dedicated adviser about switching.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.