Contractors Accountancy Services from as little as £29.99 per month
Albans can take care of your accounting needs so you can concentrate on your projects. Contractors should establish that they are working outside of IR35. Those contractors who fall under IR35 rules will be liable to Schedule E taxation and National Insurance following deductions for expenses.
There are number of important issues to consider whether you are just starting or have already started trading.
How is the best to trade, whether it is better to trade as Sole Trader or through a Limited Company?
There are advantages and dis-advantages of any method you choose. You do not have to take IR35 into consideration if you working as a Sole Trader. It is more tax efficient than an Umbrella Company.
If you choose to trade as a Limited Company then it is most tax efficient but there is more work and more responsibilities as compared to a Sole Trader. IR35 needs to be considered if you work through Limited Company.
The original reasons for the IR35 legislation being introduced was to challenge what was seen at them time as tax and National insurance contributions avoidance schemes through the use of intermediary, in this case, limited companies and partnerships.
If HMRC finds out that you are trading inside IR35 as though you are trading outside of it then you are at a risk of penalties. You may have to pay any underpaid national insurance with interest and penalty charges.
We are happy to review your circumstances and give you opinion on whether or not your business falls within the legislation.