Selecting an accountant with the the necessary expertise, who can efficiently manage your taxes, is vital for you as a contractor.
We offer a second-to-none service for contractors: we will provide you with a dedicated team of professionals to manage your accounts, according to your individual needs. We will work closely with you, and offer you the best advice in the industry.
At Mercian Accountants we understand the needs of contractors and have a wealth of experience in key areas such as IR35. Your business will be in expert hands as we help you plan and work around the IR35 legislation. In addition, we can offer advice on Managed Services Company legislation to ensure complete legitimacy throughout the process.
IR35 – What Does It Mean?
IR35 applies to contractors who don’t meet HMRC’s strict definitions of self-employment. IR35 rules prevent contractor companies retaining profits to grow their business in the future, and if you fall under the IR35 rules, you are liable to Schedule E taxation and National Insurance once deductions have been made for expenses.
Normal Section 198 expenses can still be claimed and in addition, there is a provision for other intermediary expenses of 5% of a contractor’s turnover. Other claimable expenses include business travel, pension payments, subsistence, professional Indemnity and benefits in kind.
We will advise you on the best way to plan and negotiate your way through IR35. Being classed as self-employed (as defined by HMRC guidelines) can be a big advantage, so we can explain how to structure your business to be IR35 friendly as this may be the ideal solution. One thing we strongly recommend is that you don’t ignore IR35 and hope it goes away; understand it, adapt and deal with it.
Providing a traditional and trustworthy service that is backed by the latest software and accounting practices is at the core of what we do. We take pride in valuing smaller businesses as much as larger businesses, guaranteeing the same level of expert service to the self-employed contractor as we do to the contractor with 100 employees; delivering a tailor-made package that suits your needs.
Our service includes annual accounts, tax returns, payroll, self-assessment, VAT returns, P11D and, when requested, references. We will assess your overall requirement and provide a fixed price that is both fair and competitive. We will also take time to explain what is included in your package, so there’s never anything unexpected or hidden among the small print. Clarity and transparency is always appreciated by our clients, so our trustworthy professionals will always take you through the services we provide and ensure that any grey areas are made crystal clear.
We aim to provide a high-tech, traditional accounting service that will not only keep your accounts in their optimum order, but also help your business prosper and grow at the rate you want. Tax efficiency, clarity, a dedicated accountant and team, expertise combined with state-of-the-art technology and traditional values, our Accounts service for Contractors is one of the best in the UK.
Tax Advice And Planning
We’re not just here to process numbers and balance the books; we believe in keeping each client up-to-date on the latest information and changes that will ultimately prove beneficial to their business. A solid business and tax plan can ensure you obtain the maximum benefit from your business, and with that in mind, here are some basic tips:
- Consider maximising your disposable income by setting up as a Limited Company (Ltd Co.) If you’ve not done this already, we can explain how and why this should be one of your first steps. Becoming a Ltd Co. brings additional responsibility and administration, but the benefits can far outweigh the negatives with substantial savings to be made in comparison to being registered as self-employed or under PAYE.
- Consider registering on a VAT flat rate scheme, where you will pay a fixed percentage of VAT on your annual turnover (provided your turnover is expected to be less than £150,000). This can often allow you to reclaim more VAT than you have actually paid.
- Are you fully aware of all the expenses you can claim? We can advise you on everything you can legally claim for and, if managed correctly, expenses through a Ltd Co. can reduce your corporation tax, provided the strict HMRC guidelines are adhered to.
- Dividend payments – do you know how you can time your drawings without incurring additional tax payments? We can help you plan and maximise your dividends to ensure you don’t pay a penny more than you need to.
- Are you fully aware of the Annual Investment Allowance (AIA)? Any capital asset such as office furniture, fixtures, laptops or hardware needed for operational purposes can qualify for a first-year capital allowance. Allow us to guide you through and steer you towards substantial savings.
- Know IR35 rules inside and out and stay on the right side of the law – we will ensure you are up to speed on everything that you have to know in order to comply with the rules.
- While not offering investment advice, we can advise you on how to structure pension contributions, investments and life assurance through your Ltd Co, via a number of different routes.
- And if you are selling or closing down your Ltd Co. we can also explain how entrepreneur relief can be applied, subject to the criteria being met, which again can save you money.
VAT Flat Rate Scheme
A VAT flat rate scheme can allow your business with up to £150,000 turnover to make flat-rate calculations as opposed to recording the VAT of every purchase and sale you make; this can save you precious time and money.
Through an optional scheme, enrolment can save you time and energy in administration, which again frees up energy that can be better utilised on your business.
We will help calculate your VAT, apply for the appropriate flat rate percentage for your trade sector against your total income and arrive at the VAT figure you will need to pay. You can remain in the scheme until the HMRC threshold is reached (currently £230,000).
We take great pride in being available to answer your questions whenever you need them answering and believe in building strong working relationships with our clients that sets us apart from other accountancy firms.