Contractor networking for introverts

Sharing, talking and mingling drains you of energy.

Most of the time you’d rather just focus on your work.

You’re a private person, so sharing feels awkward.

If the above describes you then you may be a bit of an introvert, which isn’t necessarily a bad thing. It’s common for introversion and shyness to get confused, when actually they’re completely separate. Broadly speaking those of us with introverted tendencies are inclined to feel drained from being around people for long periods of time, especially large crowds. Whereas shyness is the fear of negative judgement. Extroverts on the other hand, gain energy from socialising – their energy is sapped when they spend too much time alone.

This makes promoting yourself quite difficult for those with introverted characteristics – but you’ve decided that contracting is the life for you – so unless your skills are so niche and in demand that you’re highly sought after, it’s something you’re going to have to do. To put yourself out there, you’ll need to sell your skills to agencies and clients in phone conversations and interviews, network with those in similar fields and generally big yourself up! So how can you do all this without it being too overwhelming? Here’s a few ways to get over the hurdles of self-promotion:

 

1. Remember that many feel the same way as you do
Just because some people appear confident on the outside, it doesn’t mean they’re not a wreck on the inside. Maybe they’re just better at hiding it than you are, or they may have gone one step further and practiced managing their anxiety. Next time you’re in a situation you feel uncomfortable with, breath deeply and consciously take it in your stride. Nothing bad is going to happen – after all, thousands of nervous contractors and freelancers deal with it successfully every day.

2. Bond with others
Rather than viewing people as competitors, see them as a potential support network. If you look at it from this angle it may help to ease the difficulty of socialising. Building good relationships with people may create new work and contracts, as well as offer welcome support and advice, or even forge friendships by seeing you as an ally. It’s a natural human trait to want to connect and share, so don’t miss out by declining too many opportunities.

3. Use social media
There’s a certain amount of anonymity to be had from communicating online, plus you have the freedom to choose when and where to do it, so this form of communication is ideal for fitting around your requirements. Connecting, chatting and posting your opinions on a platform such as LinkedIn (the main one for businesses), means you can secure and build up valuable contacts without even leaving the house.

4. Attend networking events
Social media can be a brilliant tool for self-promotion, but it’s still quite impersonal. Nothing can replace a real-life, friendly smile and one of the best places to find those is at networking events. The thought of a crowded room might make some people shudder, but a way to overcome this is instead of focusing on the quantity of people you meet or conversations you have, find one or two people that you can devote your focus and attention to and enjoy those meaningful connections. Then give yourself plenty of alone-time afterwards to recharge.

5. Boost your self-motivation
You might think it’s all well and good doing all the above, but how do you get motivated in the first place?
•Keep a positive attitude – You can never fully control your circumstances, but you can certainly choose your attitude towards them.
•See the good in bad – When encountering obstacles, you want to be in the habit of finding what works in order to get over them.

 

Being more of an introvert just means you have the same talents and skills as everyone else, but just find promoting them a tricky area to master. Do what you’re capable of, keep the momentum going, and if you’re genuinely interested in other people and their needs and stay true to yourself and your work, then you’ve pretty much nailed it.

 

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.

 

What insurance do you need as a contractor?

When starting up as a contractor, taking out appropriate insurance should be one of the top things on your to-do list.

 

Why do you need it?

Rather than being just another cost to factor in, insurance can help you secure that first contract, as most clients and agencies will insist that you’re sufficiently insured before investing in your services.

There are other benefits in seeking protection from insurance, beyond the obvious peace of mind that it brings: it provides you with cover should you be accused of causing property or reputational damage. Insurance also acts as a key IR35 status indicator, signifying to HMRC that you’re genuinely self-employed and not a ‘disguised employee’.

To put it plainly, having appropriate protection in place makes business sense and gives you credibility. The question is, what business insurance do you need?

The answer will vary depending on your area of business. But there are three types of insurance that nearly all contractors will require:

 

1. Professional Indemnity

It goes without saying that you want to do a great job for your clients, for reasons of professional pride and repeat business, but sometimes errors or omissions can occur which can cause a relationship to go sour.

Being accused of professional negligence is just about every contractor’s worst nightmare, but when you have Professional Indemnity insurance, you don’t live in fear of an accusation by a client that your work has cost them money. It provides cover for legal defence costs and if damages are awarded against you.

 

2. Public Liability

If your line of work dictates that you have to work in someone else’s premises or out in the field, then you’ll need Public Liability insurance. It provides protection in the event of an accident while supplying services; for example, injuring a passer-by or breaking a valuable piece of equipment.

The protection will cover the cost of any potential lawsuits, replacements, legal fees, medical bills and compensation resulting from an accident. Failure to take out Public Liability can lead to you having to pay compensation out of your own pocket.

 

3. Employers’ Liability

If your company employs anyone other than yourself, you’ll need Employers’ Liability insurance. In fact, if you employ more than one employee, it’s a legal requirement to take out cover. Employers’ Liability insurance protects you against the cost of compensation as a result of employee injury or illness.

While a claim against you might be unlikely, especially if you have a close relationship with your employee(s), many agencies and clients will only consider your company if you’re sufficiently covered.

 

Where can you buy the right insurance?

The amount of cover required depends on your individual circumstances – the degree of risk can vary considerably depending on what it is that you offer and how it’s offered. But, it can be difficult to ascertain just how much cover you might need. Some insurers make contractors’ lives easier by offering packages that come with comprehensive cover as standard.

Specialist contractor insurance provider Kingsbridge combine Public Indemnity, Public Liability and Employers’ Liability cover into one single policy. This policy also comes with Occupational Personal Accident cover as standard, plus Directors’ and Officers’ Liability insurance.

 

To find out more about Kingbridge, click here.

 

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.

 

What you need to know about IR35

Familiarising yourself with numerous legislation is just one of the many tasks involved in setting up your own business. But for contractors, specifically, there’s a crucial piece of legislation to get to grips with: IR35.

 

What is IR35?

IR35 is a type of tax legislation put in place to prevent contractors from limiting their tax liabilities by supplying services through a Limited Company, despite carrying out the same work as the company’s employees. In short, it’s designed to stop false self-employment.

 

Does it affect all contractors?

HMRC defines ‘disguised employees’ as contractors who are treated and act like any other member of staff working for a company. IR35 law aims to stop disguised employees trading under an intermediary, which would entitle them to greater tax benefits.

It may seem simple on paper, but in actual fact, many contractors have found it difficult determining whether or not the legislation applies to them. Trading as a Limited Company and working ‘outside’ of IR35 can result in higher take-home pay than an Umbrella agreement, but you need to be certain about your position or you could face financial penalties.

Another thing to bear in mind is that the legislation applies to each individual contract. This means that you might be outside of IR35 for one contract, but within its scope for another. And that’s why it’s important to conduct thorough contract review processes, in order to clarify if any part of your work falls inside the legislation.

 

What penalties could I face?

Contractors found to have been ‘careless’ can be fined 30% of unpaid tax. This climbs to 70% of unpaid tax if the contractor was aware they were inside of the legislation but deliberately did not make the payment; and 100% of unpaid tax if they also tried to conceal their actions.

 

Whose responsibility is to determine IR35 status?

Big changes were introduced from April 2017, which saw the responsibility of determining IR35 status move from the contractor to the client. But this is only where the contract is with a public sector body. The government are currently also debating rolling it out to cover the Private Sector, although this is likely to take some time, if it happens at all.

Some evidence suggests that this has had a negative impact on the industry, causing firms to insist their contractors trade under an Umbrella agreement to relieve the burden of payroll and other administrative duties.

 

Pairing up with a professional

If you’re considering setting up as a contractor, the experts at Intouch Accounting can help you to navigate the minefield that is IR35. We’ll make sure you understand your rights and risks under IR35 and other laws, and will review your contracts for compliance. To find out more about our service, get in touch 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.

 

 

 

 

 

 

Spring Statement 2018

Today saw the Chancellor Philip Hammond deliver his first ever Spring Statement and we’re pleased to say that the future is looking positive for contractors. The Chancellor was upbeat about the recovery of the UK economy and spoke of continued investment in public services and large infrastructure projects. The announcement of a consultation on extending tax relief on training funded by the self-employed plus a review of late payments made to small businesses both also bode well for the future.

We had our ears open for news of the IR35 private sector consultation that was announced in the Autumn Statement last year, and although it wasn’t mentioned in the announcement itself, further information published following the Chancellor’s speech has confirmed that a consultation will be published in the coming months.

Philip Hammond’s written statement announced: “In the coming months the Government will publish: Off-payroll working – a consultation on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reform. The Government will work with businesses and individuals to mitigate the potential administrative burdens of any future changes.”

We would now urge the Government to take time to consider the right approach based on input from across the industry and will of course keeping close to any future announcements.

The IR35 saga has been rumbling on for so long that you may have lost track of the backstory. So, if you want a quick potted history of IR35, what’s happened, why it matters and what might happen next, then read on…

What is IR35?
IR35 is the tax legislation which determines whether an individual is truly self employed, or working as a ‘disguised employee’ in permanent employment in order to take advantage of certain tax relief schemes which permanent employees cannot. If you are ‘inside’ IR35 you are considered a permanent employee and will therefore be taxed as such. If you are considered to be ‘outside’ IR35, you are considered self employed. IR35 applies to all business sectors and specialisms and your status can vary from contract to contract, depending on the nature of the work and details of the contract.

Until April 2017, the contractor was responsible for determining whether their contract was inside or outside of IR35, according to the rules set out by HMRC.

IR35 in the Public Sector
From April 6th 2017, legislative reforms meant that the burden and responsibility of determining IR35 status for Public Sector Contracting was now with the client, not the contractor. This legislative move was perceived by some commentators as HMRC ‘testing the water’ in advance of potentially rolling out the reforms to the Private Sector.

However, the implications of the Public Sector reforms have been more wide-reaching than anticipated, with Public Sector entities like the NHS blanket-applying IR35 across all contracts for fear of getting it wrong and incurring fines. Not wanting the associated administrative burden of payroll management, they also insisted on their contractors using umbrella companies. This double whammy of having the Employer’s National Insurance costs passed down to the worker (and not borne by the Engager) plus the cashflow disadvantage of being taxed at source and still having to pay the umbrella fee left contractors substantially out of pocket. Many decided to work elsewhere, return to permanent employment, or work only in the Private Sector in future if their skills were transferrable.

IR35 in the Private Sector?
Following speculation that the IR35 reforms might be rolled out into the Private Sector imminently, contractors were relieved by the announcement in the November 2017 budget that a full review and consultation would be carried out before any decisions being made. We’ll be watching closely for the results of this consultation which may be published in the coming weeks or months.

If you have any questions relating to IR35 or want to find out more about our Contractor Accounting service, call us now on 01202 375 562.

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 get your Limited Company name just right

So you’ve decided to form your own Limited Company, congratulations! While it’s a fantastically exciting time for new employment adventures, there are a few things you’ll need to get in order before you can trade through your company, and one of them is your company name. How do you go about doing it, what’s required, and how do you check if it’s even available?

This blog looks at all the factors to consider when choosing the name to ensure that it complies with the rules set by Companies House.

 

Limited or Ltd – which one to choose?

The first thing to note is that all private Limited Companies in the UK must have either ‘Limited’ or ‘Ltd’ at the end of their name.

Beware: If you register with ‘Limited’ you can use ‘Ltd’, but if you register with ‘Ltd’ you can’t use ‘Limited’. Make sure you choose the right option.

 

What’s the right name for you and your company?

The perfect company name lets prospective clients know what you do and that you mean business. Here are a few things to consider:

  • What industry are you in, and can your company name reflect this? If you’re an IT contractor for example, portray what you do straight away to your prospective clients
  • How creative do you want to be? Would you prefer to appear serious, or stand out from the crowd with your uniqueness? Made-up words or acronyms can give an individual feel
  • Will your personal name feature in the company name? As in ‘Joe Bloggs IT Contracting Limited’ for instance
  • How will your company name sit alongside your personal marketing strategy (if you have one)?
  • Will your name reflect you as an individual, or your company?

 

Deciding what your personal and/or company image is will probably be the most difficult part of creating a name. Write a list and get an idea for what feels right to you.

Another tip would be to look at your direct competitors’ names – what do you like/dislike about them, and how will you stand out against them to your prospective client base?

 

What’s generally allowed?

As long as the name is unique there’s a wide range of choice available. Some people choose random words or phrases as they’re not intending to use the company name as a brand to trade on. If this is the case for you then you’ll probably be less concerned about what the name sounds like, which gives you even greater choice.

If you intend to incorporate the company name in your marketing strategy then just bear in mind that more often than not the most obvious choices have already been taken, so you may have to get a bit creative with it. Even if you can’t find something that you really like it’s still possible to use a ‘Trading Name’ that fits, as long as this doesn’t infringe on anyone else’s name or trademark. To do this you’ll still need to display your registered company name on all documentation and your website, but you can add something like ‘Stellar Computing Genius is a trading name of Xylo 2013 Ltd’.

If you’re professionally qualified, such as a Chartered Accountant, then you may be able to obtain permission to use this in your company name if you want to, but remember to check that the full company name remains entirely unique.

Here are a few rules and considerations every contractor must abide by:

  • The name can’t be the same (or too similar) to an existing name from the Companies House index of names. With expressed permission from the other name owner you can get around this, but this is based on exceptional circumstances only. To check if it’s already been taken, visit the Companies House website
  • Your company name can’t include a ‘sensitive’ word or expression. It also can’t imply business superiority, a particular status or specific function. For example, you can’t use the word ‘bank’, as this would need to be approved by the Financial Conduct Authority
  • National words such as ‘British’, ‘Great British’, ‘Great Britain’, ‘United Kingdom’ or ‘International’ are strictly controlled. Only Companies House will allow these based on exceptional circumstances
  • The name can’t have nor indicate any connections with the Government or local authorities
  • Be creative – but not rude! Offensive names are not permitted
  • Characters, symbols and punctuation can also be restricted

 

Beware: You may wish to call your company whatever you like, but Companies House has the power to reject any name they feel doesn’t comply with the points above. So save yourself time, effort (and potentially money) and make sure you comply to get it right first time.

 

Can you reserve a company name?

While you might know what name you’d like to use, you may not be quite ready to register your Limited Company. So what do you do? Unfortunately you can’t reserve your company name, but you can set up your Limited Company in a ‘dormant’ state.

Beware: Even though the company is dormant, your legal responsibilities as a Director are still active. Make sure you’re aware of what’s required of you while your company is dormant.

 

Can you change it further down the line?

If you want or need to change your company name you can do so in two ways:

  • Special resolution – if you change the name using a special resolution, you must file a copy of the resolution, a completed NM01 form and the appropriate fee with Companies House
  • Provision in the company’s articles – if you change the company name by means provided for in the company’s articles, you must file a NM04 form and the appropriate fee with Companies House.

 

Beware: Changing your company name through Companies House isn’t the only place you’ll have to do so. If you have social media platforms, stationery, or other mediums which carry your old name, these will all have to be changed, which can get costly. Our advice is make sure you like your name before you register it!

 

As part of Intouch’s monthly fixed fee, company incorporation is included. Our specialist team will make sure you’re eased into Limited Company ownership knowing that the name, information requirements and paperwork are fully compliant and have been appropriately filed with Companies House. Good luck!

 

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.

 

Public bodies urged to use IT freelancers

When is the best time to set up an IT contracting business? This is an almost impossible question to answer, as it largely depends on your individual circumstances. But if you’ve assessed your current situation and decided that you’re ready to become a contractor, then as far as the industry is concerned, 2018 could prove to be a stellar year.

 

Research from TechMarketView, discussed in a Contractor UK article, has urged the public sector to make more use of freelance consultants this year, in a bid to address the persisting digital skills gap. The market analysis firm said that public organisations will have to think of ‘more creative ways’ to gain the skills they need, ‘including the use of public freelance marketplaces.’

 

TechMarketView acknowledged that taxpayer-funded bodies may find it difficult to conduct business efficiently ‘without looking beyond their own four walls.’ This news comes after an IR35 update last year and its ‘off-payroll rules,’ which many believe has dissuaded freelancers from providing their services to the sector.

 

‘Fled in droves’

Mike Gibson, Managing Director at Ethical Consulting, who has been petitioning against IR35, argued the above point to the government’s business department, after it published a strategy on IT provision to its staff, ‘and the people and businesses we serve.’ This strategy is, in Gibson’s words, “[beautifully] written and composed, professionally created and ultimately pointless.

Delivery will be dependent on a veritable army of flexible and temporary resource – who have fled the UK [public sector] in their droves as a result of IR35 changes in April 2017.”

 

Options available

Gibson said that for the government department to achieve its aim – which is, to ‘make the best use of digital, data and technology (DDat) in our everyday work’ – then either one of two things need to happen:

The first option is for the body to pay 22% more to PSC contractors who possess the necessary skills, to counteract the hike in tax the IR35 reforms result in. Alternatively, it must accept that DDat-related work will be carried out by ‘inside IR35’ consultants willing to take a 22% cut to their wages. But, referring to the latter, Gibson said, “I don’t see the top-drawer [DDaT] people doing that when they don’t need to.”

It will be interesting to see how the next few months pan out and if any proactive steps are taken by the sector to address the continuing IT skills shortage. In the meantime, if you’re thinking of contracting and want to know how IR35 legislation affects you, contact the experts at Intouch Accounting now…

 

Sources:

TechMarketView – Public Sector Predictions 2018 – New Research

ContractorUK – Get IT Freelancers in for 2018, public bodies told

GOV.UK – BEIS digital data and technology (DDat) strategy

 

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 pros and cons of a Limited Company for a contractor

After much deliberation, you’ve decided to go it alone and set up as a contractor. You’ve polished your CV and LinkedIn profile and have started looking for your first contract, but you’re yet to decide on one important factor: your new company’s trading structure.

As a contractor, you can either choose to set up as a Limited Company, a Sole Trader or work under a so-called ‘Umbrella’ agreement. This article examines the main pros and cons of operating as a Limited Company.

Pros: 

Tax-efficient

Registering as a Limited Company tends to be the most tax-efficient way of operating, particularly if your annual income is likely to exceed £40,000. As a director and shareholder in the business, you can opt to take your income in the form of dividends, which will reduce National Insurance costs.

Claimable expenses

Further savings can be made through claiming back certain business expenses, such as home office costs, childcare and mileage.

More control

As the director, you make the decisions and have full control over how your business is run, as well as your personal income and therefore rates of tax. This means no compromising with partners, or relying on third parties to collect payment for your services.

Limited personal liability

With a Limited Company, your personal finances are separate from business assets. So, if something were to go wrong, you’d only lose money from the company.

More professional image

Trading as a Limited Company gives off a more professional image, which can help you to attract and retain clients, particularly larger ones.

 

Cons:

More administration

As director, you have to ensure that your business is compliant with company law and are required to do everything from filing accounts to preparing tax returns and general bookkeeping. It’s down to you to familiarise yourself with the punitive IR35 legislation, too.

Greater responsibility

Acting as director does carry considerable responsibility. Not only will you have to conduct admin tasks on a regular basis, but it’s your duty to ensure that all information is accurate and submitted on time.

Associated costs

There are several costs related to setting up and running a Limited Company, namely those related to administration, filing and accountancy.

 

At Intouch Accounting, our Personal Accountants offer expert advice on the most suitable trading structure for your future business. We’ll manage the company formation on your behalf and relieve you of those time-consuming and often complex administrative duties. As experts in IR35, we’ll tell you everything you need to know about the legislation. Get in touch today to find out more.

 

You may also be interested in:

Venturing into contracting? Download our free guide now

Calculate your take-home pay and find out if Limited is right for you

Contractor Accountants – do you get what you pay for?

 

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.

 

 

Start contracting with confidence in 2018

Starting a long-term career as a contractor or freelancer in 2018 has become more attractive than during any time in the last two years. If you’re looking for independence and have a skill set that matches increasing current demand, then it’s possible to both ‘have your cake and eat it’, in 2018!

 

Clarity of employment status

The turmoil that was predicted from the middle of 2017 regarding changes to IR35 (the legislation that determines your employment status and therefore your potential tax efficiency as a contractor) has not materialised. The possibility of further IR35 change in the private sector has been deferred until the public sector changes can be reviewed and lessons learned.

Meanwhile, day rates are also stabilising as employers who sought to pass the burden of employer’s National Insurance contributions entirely onto workers are experiencing resistance.

HMRC’s employment status tool (CEST: ‘Check Employment Status for Tax’) also helps; it’s not perfect, and it’s still advisable to take professional IR35 advice, but when answered openly the questions provide a pretty accurate answer.

This increased level of clarity puts the contractor in the perfect position to grasp the opportunity, and begin to enjoy the freedoms of freelancing – all good reasons to rejoice in 2018!

 

Demand for skills 

Brexit and other Government promises to deliver on infrastructure projects and technology change, are creating huge demand for IT and related skills across the UK.

Employers are still preferring to keep employment costs under their control by engaging flexible workers, under flexible or zero-hour contracts. And anti-avoidance rules are also settling down with engagers being more pragmatic and accommodating (rather than issuing blanket edicts) in order to attract and retain talent.

All good news for the 2018 contractor.

 

Taking the leap into Limited

Are you ready to have your cake and eat it? Embrace the quality of life, freedom and flexibility of being your own boss, as well as increased take home pay?

If so, there are always choices of which trading model you should trade under. As a rule of thumb (only – there are always exceptions), you should consider the following:

Semi or low-skilled workers – If you are semi or low-skilled or provided services at or near the National Minimum Wage, then using a Limited Company is not likely to be the most suitable vehicle for a number of reasons. If you’re in this category and being put under pressure to go limited, you should take independent advice.

If you’re able to choose your preferred solution, then an Umbrella organisation should give you good advice. Beware the shady Umbrellas (pun intended) though – FCSA accreditation is a must. For others with perhaps fewer expenses that can be claimed, the best solution may well be to use a simple payroll bureau, where the fees you pay are lower and the rights you get more comprehensive.

 

Skilled or ‘Knowledge Workers’ – If you’re a ‘Knowledge Worker’ or skilled in a particular trade or profession, then a Limited Company can provide you with the best solution from several perspectives. For individuals who are independent and outside of the supervision, direction or control of the hirer, there will be advantages in your take home pay. You’ll have increased flexibility and commercial credibility, but you’ll have to protect yourself for illness or inability to work (usually through insurances). Ask for assistance from a contractor accounting professional from the beginning and get off to a good start.

 

Contracting advice from experts

If you’re thinking of setting up as a Limited Company contractor, Intouch can offer more than just an accounting service. From set-up and insurance to tax and IR35 advice, your Personal Accountant will be there to help you start your journey with confidence. We know that taking your first step into contracting is a big decision so we’re happy to chat through any questions you have even if you’re not ready to get going just yet.

 

You may also be interested in:

Venturing into contracting? Download our free guide

IR35 FAQs

Intouch current joining offers

 

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.

 

Good news for contractors with children: tax-free childcare has (almost) arrived

Back in 2013 the Government announced a new tax break for working parents, providing help with paying for much needed childcare.

 

In this blog we take a look at what the scheme entails, how you can take advantage of the scheme, and when it becomes available.

 

What is the Tax-Free Childcare Scheme?

Effectively, the scheme allows parents to pay into an online account in the same way as they would pay into a regular bank account. The Government also pays into this account, which is then used to pay for part or all of your child’s care costs.

 

Who can apply for the scheme?

Anyone can apply, as long as:

  • your child is aged 12 and under (or if your child has a disability, 17 and under)
  • you and your partner are in employment, and expected to both earn a minimum of £115 per week (but no more than £100,000 per year)
  • This scheme is also available to self-employed parents, who will not have to earn the same minimum amount as those who are in permanent employment

 

How does it work?

  • For every 80p paid into the account, the Government will pay in 20p
  • There’s a limit of £2,000 per child, per year (£4,000 per child, per year for disabled children) for parents receiving support towards their childcare costs
  • Anyone is able to pay into the scheme, so if you have a generous grandparent, godparent or friend, they too can contribute!
  • The money collected can only be used to pay for childcare that’s provided by a carer who is registered to receive a Tax-Free Childcare payment. Check whether your current childcare provider is registered here
  • You cannot qualify for this scheme if you currently receive childcare vouchers from your employer or if you already receive free or subsidised childcare
  • You will lose the Government’s contribution if you draw the money out rather than using it for childcare

 

When does it become available?

For some parents it will be available from Spring 2017, but others will have to wait until much later in the year as the scheme is being rolled out gradually. Those parents with the youngest children will be first in line to try it out.

 

How can you register your interest?

Register at gov.uk to ensure you’re on the Government’s radar for this scheme. You will receive an email that will let you know when you’re able to start an account.

 

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.