Financial Services for Contractors

Planning your personal finances as a contractor

Contracting offers many opportunities in terms of earnings potential and flexibility but also potential financial pitfalls. You’ll no longer have access to a company employee benefits package and optimising your earnings and savings can be more complex when you’re a contractor. When it comes to mortgages, you won’t necessarily ‘fit’ the lenders’ standard criteria which can make it hard to find a good deal.

It’s important to take specialist advice on how to manage and plan your personal finances as well as those of your business. Once your accountant has advised you on how to take the most tax-efficient blend of salary and dividends out of your company, how do you make the most of your ‘personal’ money? Most contractor accountants will advise you to speak to a financial advisor, but some, like Intouch can offer a specialist service to their contracting clients

Intouch clients get all the financial support they need to overcome the specific challenges facing contractors. That’s because as part of the wider Brookson Group, we offer our clients access to expert financial advice and products that have been designed with the contractor in mind.

 

Specialist contractor financial advice

Brookson Financial have been offering expert advice and support for contractors and self-employed professionals for over 20 years, developing a deep understanding of how independent professionals work and what their financial needs are.

They are a specialist team of Financial Advisers that pride themselves in understanding the unique opportunities and challenges self-employment brings. As an Intouch client, you are able to access this specially designed range of contractor financial advice and services:

  • Competitive, contractor-specific mortgages
  • Pension advice
  • ISAs
  • Retirement Advice & Review
  • Investment & Saving
  • Retirement Forecasting and Planning
  • Illness & Life Cover
  • Business Insurance

Free Financial Health Check

The foundation of sound advice is a clear picture of your personal and corporate position combined with an understanding of your short, medium and long-term objectives. That’s why every Intouch client is entitled to a free Financial Health Check. Following a short phone call, you’ll receive a personalised report covering your current and future financial well-being and highlighting any areas of need.

Join Intouch Accounting, get so much more

Whether you’re looking to switch accountants or just starting out in contracting, with Intouch you get everything you need to run your Limited Company from an accounting and tax point of view for a fixed monthly fee. Your dedicated Contractor Accountant will handle everything for you, helping to maximise your income, while staying on the right side of the tax man. With unlimited IR35 advice and reviews and of cours access to contractor-specific financial services products, you’ll have everything you need for your contracting life.

So get in touch today

 

You might also like:

Contractor advice – mortgages made easy

How to get started as a contractor – infographic

How to switch to intouch – infographic

 

 

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 switch over to Intouch – Infographic

Are you thinking of switching over to Intouch from your current accountant? Then take a look at our infographic to see how easy it is…

 

Switching to Intouch

Contractor advice: mortgages made easy

Unless you’re an expert in the area, the world of mortgages can seem like a minefield. With so many providers, terms, rates and industry jargon to get your head around, identifying the best deal for your needs doesn’t come easy.

Things can get a little more perplexing if you’re a contractor. Being self-employed brings with it great freedom and flexibility, but also some uncertainty – and mortgages fall under this bracket.

Buying a property should be an exciting experience and as stress-free as possible. We hope reading this guide will help you in the process.

 

Why is it difficult for contractors to secure a mortgage?

Working as a contractor, your income is likely to vary from month to month. It’s this inconsistency that rings alarm bells with some providers, who factor it in when calculating your ability to sustain mortgage payments.

As a Ltd Company contractor, it’s often more tax efficient to pay yourself a low salary and top it up using dividends, but this can also lead to issues securing a mortgage. A provider, for instance, may not take into account retained profit you already have in your contracting business – profit that proves you could afford a mortgage.

Of course, there are other factors that may see a mortgage application denied – poor credit history, career gaps and undisclosed credit are among these.

Essentially, when your salary isn’t fixed, providers consider it riskier to lend you money. This one-size-fits-all approach certainly doesn’t fall in a contractor’s favour, and it can seem extremely unfair.

Contractors also stand a high chance of being turned down for a mortgage even if they personally approach their own bank, which will only assess their earnings, and often conclude that they have failed the so-called affordability test.

 

How can contractors strengthen their application?

There are a number of things contractors can do to appear more ‘lendable’ to mortgage companies, but they’re not always practical or guaranteed to be successful. Some of these include:

  • Saving up a larger deposit, which from a provider’s perspective lowers ‘perceived risk’
  • Improving your credit score before you start house hunting
  • Obtaining evidence of ongoing agreements with companies to prove guaranteed future work, as well as renewed contracts
  • Limiting time off in the run up to buying a home, as providers may scrutinise you for being out of work for long periods

 

So, what’s the solution?

It may be more difficult to secure a mortgage as a contractor, but it’s certainly not impossible. And actually, with more and more people choosing to go it alone and become self-employed, there has been an increase in the number of bespoke mortgage deals tailored specifically to contractors and their unique needs.

For specialist mortgage deals, you need to turn to a specialist provider, such as Brookson Financial.

Brookson Financial’s in-depth knowledge of the contractor market has enabled them to work with lenders to develop unique products which take into account the distinct ways contractors work and earn money.

The company works with carefully-selected high street lenders to offer unique deals to people like you. You would be assigned your own, personal Mortgage Advisor, who would be responsible for liaising with lenders, estate agents and solicitors on your behalf to save you time. After all, we all know how precious time is when you’ve got your own business to run.

 

From one personal advisor to the next, if you’re looking to switch accountants or haven’t long started out in contracting, with Intouch, you’ll be paired with your own, dedicated Contractor Accountant. It’s their job to help your business run smoothly by taking control of time-consuming accounting tasks you would rather do without, while making sure that you stay on the right side of the tax man.

To find out about any of these services, call us on 01202 375879.

 

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.

A handy guide to contractor insurance

If you’re just starting out in contracting, you’ll no doubt have a long checklist of things you need to do before you can reach out to clients. One of these tasks will be taking out quality insurance for your new Limited Company.

We understand that the world of insurance can feel like a minefield, so let us help! The Intouch team has put together this simple guide explaining the types of cover you’re likely to need – but first, that all-important question…

 

Why exactly do you need insurance?

Like any other business owner, contractors need to protect themselves against a number of risks. Arguably the main risk for contractors is a third-party claim against your business – for instance, if a client accuses you of negligence or damage to their property.

Without cover, a single claim could tarnish your reputation and cost you thousands of pounds to put right. It could very well spell the end to your small contracting business.

But also, you’ll find that having insurance is an essential requirement in the contracts you have with agencies and companies. A quality insurance policy will protect you against the unexpected and give you peace of mind with each new contract you take on.

 

The types of insurance you’ll need

Cover comes in all shapes and sizes – here are the types of insurance you’ll need in order to fully protect your Limited Company:

 

• Professional indemnity

If a client believes you’ve done something wrong in your work, known as ‘professional negligence,’ this cover will protect you against the financial implications of them claiming against your company. For instance, it will pay out legal defence costs and damages awarded to the client.

 

• Public liability

As the name implies, this cover is needed if you deal with the public – for example, if your clients visit your office or you work at their premises. It offers protection in the event someone is injured or property is damaged as a result of your work.

 

• Employer’s liability

This protects you against claims made by employees. As you don’t have any employees, you might be wondering why you need it? However, you’ll find that many agencies and clients require you to have employer’s liability cover, alongside public liability and professional indemnity insurance.

 

• Directors’ and officers’ liability

As the director of your own business, you could be held accountable for a number of legislative breaches involving things like mismanagement, health and safety failure or failing to comply with company law. This insurance will cover the financial costs of a claim to make sure it doesn’t take a hit on your bottom line.

 

• Occupational personal accident cover

If you’re injured while working and your business grinds to a halt, it’s almost certain that you’ll be at a financial loss. This insurance pays out a regular sum of money whilst you get better, so that your finances don’t add to your worries.

 

Secure insurance through Intouch

Intouch Accounting has partnered with reputable insurance provider Kingsbridge, which specialises in comprehensive contractor policies. To make things easier, Kingsbridge offers an insurance package which includes professional indemnity cover, as well as public and employer’s liability. You can also boost protection with directors’ and officers’ liability and personal accident cover.

And if you’d like support getting your business off the ground, find out more about Intouch’s services by calling one of our experts on 01202 375293.

 

 

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.

Intouch Accounting wins Best Contractor Accountant (Small/Medium) in the ContractorUK reader Awards 2017

Everyone at Intouch is delighted to hear that our clients have voted us ‘Best Contractor Accountant (Small/Medium)’ in the ContractorUK Reader Awards 2017, retaining our title from last year.

This award is important to us as it is voted for by clients, and excellent client service from personal accountants is our number one goal. So we’d like to say a massive THANK YOU to all those clients who took the time to vote. You can find out more about what makes our service so special here.

We’re also delighted to prove to our new backers that they made the right decision! Coming shortly after the acquisition of Intouch by The Brookson Group, Andrew Fahey, MD of Brookson One who is facilitating the Intouch handover says; “This win is testament to the great service provided by the team at Intouch who put the client experience at the heart of everything they do. I’m delighted to welcome Intouch to the Brookson Group and this award just re-affirms our plans for Intouch to remain a stand-alone business with no change to this high service ethos. Thank you to all the Intouch clients who voted this year to help Intouch retain the crown.”

We look forward to another great year of continuing success and providing excellent service to all of our clients.

 

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.

 

Can I get a mortgage as a contractor?

Can I get a mortgage as a contractor?

As a contractor, one of the most commonly asked questions is whether or not it is possible to secure a mortgage. Quite understandably, many contractors are unsure as to what their position is, given the fact that they’re not in permanent employment. It’s common knowledge that it’s becoming increasingly difficult to secure a mortgage following the Mortgage Market Review in 2014.

 

Yes, a contractor can secure a mortgage

As a very top-line answer; yes, of course a contractor can get a mortgage. Lenders aren’t there to prevent individuals from owning their home, simply to reduce risk associated with it. So it all comes down to taking the right route to ensure an application is made to a lender who understands contracting. In theory, so long as a contractor is able to provide two or three years’ worth of income details (for example, wage slips, accounts, dividends documentation) or, if operating as a sole trader, SA302s, it should be possible to secure a mortgage. However, unfortunately, it’s rarely that simple.

 

Many lenders do not understand contracting

One of the main problems in this area lies in that many lenders may not understand what a contractor is. Whether you’ve been contracting six months or six years, there ARE lenders out there who understand your situation and are happy to lend to you, so long as the standard criteria are met.

 

Different contractors operate in different ways

It’s important to understand that contractors can operate in different ways; sole traders or company directors primarily. With a company director for example, lenders will be looking at the combined salary and dividends drawn in a financial year, however this can cause problems for contractors who leave profits within the business. In this instance, it’s necessary to apply to a lender who will consider and take into account the company’s retained profits.

 

Many advisers are inexperienced
It is commonly seen, further to the above, that the majority of advisers in banks are inexperienced in dealing with anyone other than employed individuals, so when a contractor makes an application, they themselves are unsure as to what is and isn’t able to be assessed. This further backs up the justification for carrying out the research and finding a suitable lender who understands the trading style.

 

The bottom line is that a contractor will need at least one year’s accounts in order to be considered, however in reality, having two or three year’s accounts will make a larger number of lenders accessible.

 

Proving a steady income

So long as it can be proven that a steady income is earned and that, in the case of a director who pays a smaller wage and dividend, there are retained profits which can be taken into account, there’s no reason why a contractor should struggle to get approval on a mortgage. Our top tip here, however, is to speak with a specialist mortgage broker who fully understands the options available, has a track record of securing mortgages for contractors and that, as with all mortgage applications, the base criteria of affordability and the correct paperwork are met.

 

If you want any further information on getting a mortgage as a contractor, contact one of our team on 01202 375 562. Also, why not contact us to see how Intouch Accounting can help keep you compliant and maximise your income?

 

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.