Contractors, regardless of whether they intend to operate through a limited company or umbrella company, are required to pay income tax just like any other income-earning individual in the UK. The actual amount that needs to be paid is dependent on the amount that the individual is earning, with increasing income accompanied by increasing tax… Read More »
The IR35 is the most discussed piece of tax legislation that affects contractors. The idea behind the legislation is to stop what the HMRC believe amounted to tax avoidance by contractors who are operating through a limited company. It’s intention was to make sure that those individuals working through a limited company were not paying… Read More »
As you may already know, VAT stands for Value Added Tax and is a tax that is added to almost every product and service anywhere in the country. The VAT currently stands at 20% having increased by 2.5% from 17.5% during the recent economic crisis. However, those contractors who decide to operate through their own… Read More »
Working out whether you are liable for a tax refund is quite an easy thing to do as it is all comes down to the salary allowance you are given by the British government each year, which is entirely tax free. The current tax-free personal (so doesn’t apply to a Limited company, although a contractor… Read More »
A lot of contractors decide that the best way to operate their business is to avoid umbrella companies and start their own limited company by incorporating a company of which they as contractor would be a director. However, for various reasons some contractors operating this manner are unable, unwilling or simply just don’t pay the… Read More »
Most contractors will already be aware of what tax codes are from their previous roles as they are not solely given to contractors but rather all working UK residents. For those that don’t know, tax codes are a way of helping the HMRC with their cash flow and are based on the level of tax-free… Read More »
On occasion, Her Majesties Revenue and Customs (HMRC) will perform an inspection into contractors VAT submission. There are no set criteria for when or why this will happen but it can often come down to a matter of comparison. For example, they will often compare your VAT returns with those of other contractors of your… Read More »
Once you have made the decision to use an umbrella company and have selected a company you wish to use, the next step is actually joining the company. In most cases, you are able to register with the company online but if you would prefer to speak to someone first and register over the phone… Read More »
UK contractors often have clients who request that they work overseas or secure clients who are based overseas. This can be a difficult issue when figuring how this leaves them in terms of the UK tax system. Those who are subject to the IR35 regulation often worry about the implications of working for clients abroad… Read More »
Umbrella companies are the easiest way for contractors to ensure that all your taxes and admin is taken care of so you can focus on your work. Benefits of Using an Umbrella Company Umbrella companies are also able to provide you with the relevant insurance policies to provide you with protection should there be any… Read More »