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Contractor Accountants
by
Jeremy D Scott
IT contractors usually work from home and trade via a limited company in order to save tax. The process is usually to earn a small salary, not large enough to incur national insurance liabilities, but large enough to ensure that state benefits are preserved. This is all well and good, but the problem is that by trading as a limited company, the contractor must ensure that his company complies with corporate legislation, a fact that accountants are well aware of! The typical price for a \”work from home limited company\” is around £1100 per annum, not cheap by anyones reckoning.
However, there is an alternative on the market in the form of the contractor accountant. Contractor accountants
are able to take advantage of modern computerised packages to pass efficiencies onto the client and hence offer dramatically reduced prices. Competitive contractor accounting packages on the market these days start at around £500 per annum and include the annual business accounts, corporation tax return, personal tax return, the annual return and payroll for a single director. The personal tax return is required because the limited company and the individual are separate legal entities. The company generates profits, which are then extracted in the form of dividends or salary, to then be reported on the personal tax return, rather than the corporation tax return.
In addition, contractor accountants tend to be able to offer additional services which are relevant to contractors such as checking contractors for IR35 compliance, or being able to recommend providers of services such as professional indemnity insurance. However, at the end of the day, there is risk involved with any business relationship so I would advise that prior to signing any contracts, due diligence should be performed to ensure that the track record of the professionals concerned is fully understood.
Jeremy Scott offers advice to contractors right across the UK.
Contractor Accountants
Article Source:
ArticleRich.com