This is a limited company that typically supplies the services of individuals to end user clients, either directly or via an agency.

As a contractor, freelancer or interim working through your own limited company, you can generally expect your take home pay to be between 60% and 75% of your contract value excluding expenses.  If you are employed through an umbrella company, your take home pay will be less, often, normally around 60% excluding expenses.

All contractors opting to trade through a Limited Company are advised to complete a contract review. To ensure compliance, we use the services of an acknowledged expert in the taxation of PSCs who will be able to confirm your tax status as per HMRC Guidelines. Essentially, we need to find out whether or not you are in business or working in a manner similar to that of an employee. We will then provide you with a professional opinion as confirmation for your records.

If your contract is lasting longer than 1 month, HMRC stipulate that you complete an IR35 review.

We can provide you with a consultation with a qualified accountant to discuss your options. We can accommodate a number of scenarios that are still fully compliant. Normally the result is that income from that contract is taxed under PAYE.   

As Director you have a responsibility to comply with various legislation.  We can advise you on many matters and provide services to suit your circumstances and individual requirements.  You will need to record your income and expenses within the 24/7 online book-keeping system we provide and pay all VAT and payroll returns as we advise to HMRC.

Self assessment tax returns must also be filed – this is an additional service we can provide or advise you on.

There are tax reliefs available in terms of claiming business expenses for your company but expenses can only be claimed if wholly, exclusively and necessarily incurred in the purpose of the business. Typical expenses you can claim include:

Our monthly admin and accountancy fees

Contract review fees

Limited company formation fees

Travel expenses

Accommodation and subsistence

Mileage

Business telephone calls

Computer equipment and stationary

Professional membership fees for any professional body you pay to be a member of (books, subscriptions, and courses as long as they are related to your work via your contract).

All business insurances – e.g. Professional Indemnity Insurance.

Please note that all original receipts must be retained to claim expenses.

If you are working from home, you can claim £3.00 per week without being challenged by HMRC.

Also, you can claim VAT on expenses if you choose to be VAT registered through your Limited Company (only if you choose not be Flat Rate registered, unless expense is over the value of £2000).

A temporary place of work is defined as a location where the employee carries out a task of limited duration. This is generally regarded as a period of no more than 24 months. Therefore if an employee is sent to work in a location for a period exceeding 24 months it is not a temporary place of work and travel expenses cannot be claimed.  As soon as you are aware you will be at a location for more than 24 months that location is no longer a temporary workplace.

Not unless your sales exceed the annual sales limit, however most contractors will benefit from registering for VAT using the Flat Rate Scheme. This enables you to recover VAT from your customers at 15% and pay a lesser rate to HMRC, although you will be unable to recover VAT on any purchases. Unless you incur an unusual amount of VAT on purchases the scheme is usually of financial benefit to you.

Normally yes – you will need to contact your agency/client for guidance on the types and amount of insurance coverage required in line with your current contractual terms and conditions.

We will provide you with a calculator template where you can insert different salary levels to determine the most suitable salary for you.  It is normal to set a salary commensurate with the work performed with any excess income withdrawn as a dividend.   

Yes providing the second employee is carrying out duties for the company and not solely employed for tax relief purposes.  

This is not advisable as the mortgage is then a liability of the limited company and not you personally.  This is very dangerous if the limited company then goes into administration as all the assets then become property of the state.

If you take out a company pension then you can obtain tax relief through the company for this, whereas a pension taken out personally would allow tax relief in your personal tax return.

Very easy.  We contact your current accountant and request the transfer of all company records to us to provide a starting point with your Limited Company.  Thereafter we organise a contract review and application.

IR35 affects all contractors who provide their services through a Limited Company. IR35 is the code name applied by HMRC for tax legislation first introduced in April 2000 to remove certain tax breaks from freelancer trading. 

An IR35 review covers a detailed review of your contractual terms and conditions, your daily working practice and an evaluation of issues such as Control, Substitution, Integration, Exclusivity and Mutuality.