Contractors...

Our contractors department is headed up by an ex-contractor with over 8 years of experience in the field. We therefore understands exactly what a contractor needs and what their situation is.

We understand that contractors simply want to get on with doing their day to day jobs and not have to worry about the mundane things in life like their accounts. If you need us, we understand that you want your query resolved as soon as possible and not left in limbo – after all a contractors tax affairs are not that complicated (most of the time!). That's why there is always a person on the other side of the phone to talk to or if you prefer, just email us and you will get a prompt reply.

We don't complicate things, we keep it simple. We will offer you jargon free advice and make sure all your Companies House and HMRC requirements are fulfilled in good time.

All you have to do is provide us with your figures for income and expenses. We will give you a simple spreadsheet where you can input the figures and send them onto us. If you get stuck on anything, simply call or email us and we will be more than happy to talk through anything.

What's included in our Contractors and Freelancers Accountancy Package?

IR35 Discussions	Management Accounts
HMRC Company Accounts Submissions	Companies House Returns
Directors Personal Tax Return	Dividend calculation
Company Secretarial Duties	VAT Returns
PAYE

How much do I save being a limited company as opposed to with an umbrella company?
Generally speaking, as long as you are earning more than £25,000 per year from your contracting work, then you should consider opening a limited company. With a limited company you will be able take advantage of lower tax rates and thus increase your take home pay.

With an umbrella company you will pay both employees and employers NI (Employers NI is 13.8% of salary, and employees NI 12% for the first £797 a week, and 1% thereafter (both after tax free personal allowances). On a contract of £350 per day you will pay approximately £300 a week in NI through an umbrella company. With your own Limited Company you will pay just £30, so the NI savings alone is approximately £12,000 a year based on a 45 week working year. On £200 per day, the saving is approximately £9,000 or if on £600 a day save around £20,000.

Ltd company vs Umbrella company

Limited company advantages	Umbrella company advantages
Tax efficient – increases your take home pay	Just submit your expenses and timesheet
Allows for long term tax planning	Tax is deducted and paid before you get your money so you don’t have to worry about how much to set aside
All information can be submitted electronically	Ideal for short term contracts or contracts where you earn less than £25k per annum
Your money is paid directly to you
You will be advised by your accountant about how much you should set-aside for taxes and when they are due
Disadvantages	Disadvantages
You do have to complete some paperwork, usually on a spreadsheet, to send to your account	You pay a lot more tax and this decreases your take home pay. It’s like being a permamnet employee without any of the benefits
Not ideal if you are not going to be contracting for long

How much dividends can I pay myself?
This will be based on your company's profit – once we start receiving figures from you we can advise of the appropriate amount to take.

What is the VAT Flat Rate Scheme (FRS) and should I register for it?
Usually, how much VAT a business pays or claims back from HM Revenue and Customs (HMRC) is the difference between the VAT they charge customers and pay on their purchases.
With the Flat Rate Scheme:

• you pay a fixed rate of VAT over to HMRC
• you keep the difference between what you charge your customers and pay over to HMRC
• you can't reclaim the VAT on your purchases - except in certain cases when you purchase capital items over £2000

To join the scheme your VAT turnover must be less than £150,000 (excluding VAT) and you must apply to HMRC to join.

Simply speaking you will charge VAT on top of your daily rate. You will then payback HMRC a portion of that 20% that you have charged. For example if your daily rate is £300 and you work 20 days in a month, you will bill for £6,000 plus £1,200 VAT (20% of £6000). So the total payment you will receive is £7,200.

When you register for FRS, you apply a FRS percentage. For arguments sake we will say this is 14% (follow link here for full list of rates http://www.hmrc.gov.uk/manuals/frsmanual/frs7300.htm).

How does this work out for you?

Net pay:	£6000
VAT charged to client:	£1200
Gross pay:	£7200
Flat rate VAT:	14%
VAT to be repaid:	£1,008

This means that you have charged the client £1200 in VAT and repaid £1,008 of this to HMRC. You get to keep the difference of £192 as other income. And yes, we do your VAT return so you don't need to worry about anything (just make sure you pay the VAT due immediately as HMRC are quite hot on getting hold of their money!).

FAQ

I already have an accountant, is it easy to transfer my service to you?
Yes, simply email or write to your current accountant and inform them that Hallam Jones is taking over your accountancy duties. We will then contact your previous accountant and obtain all the necessary information.

I have never had a Limited company before, I don’t know what I can claim as an expense?
We will talk through everything with you to ensure you understand what expenses you can legitimately claim.

How do I know how much to pay myself so I am not paying too much tax?
Once we have spoken with you and confirmed your income, any previous income during the financial year and estimated costs, we will be able to advise you regarding how much you should draw as a salary and how much dividends you should pay yourself.

Your offices are in Sheffield and I live and work in another city, will this matter?
Not at all, as with most things now, everything can be done over the telephone, email and internet. We will provide you with a simple and easy to complete spreadsheet to record your income and expenses. Just return the completed spreadsheet and we will take care of the rest. If you are lucky enough to live in or visit Sheffield then please feel free to visit us.

If I have a question, how long will it take for you to respond?
We guarantee that all emails and telephone calls will be returned within 48 hours. There is simply no excuse for them not to be.

Will I have a dedicated point of contact who will know about my company and my requirements?
Simple answer is yes. You will have one point of contact so if you need to speak to us then that person will immediately be aware of your business situation.

I’m not good with paperwork and get confused by HMRC letters and information, how can you help?
You are not alone in this matter. We act as your company secretary so all letters from Companies House and HMRC come directly to us and we just action them. There will be some instances where you do get a letter from HMRC, i.e. when we register you for a personal tax reference. Simply scan the letter or take a picture on your phone and just send it to us to take care of. You will need to keep hold of any receipts for any expenses you are claiming. Just make a file and keep everything in one place.