Accountants for Contractors
Written by
Ray Coman
Providing services through a company is widespread for its tax and commercial advantages. Where an employment is not necessary, a company can facilitate arrangements which suit both sides to a contract. Most contractors form a company because their client requires it, or because it creates a clean separation between personal and business matters. Since 2009, Coman & Co have dealt with many contractors and provide a complete tax and accounting solution for the self-employed working through a company. We provide a practical, compliance-focused service.
Cloud accounting and non-cloud accounting
Fixed fee contractor accountant pricing
Services included in our contractor accounting package
Reasons to use company
- A company allows practical household tax planning, such as small dividends (within the £500 allowance) to a spouse or partner. The mechanism for sharing profits is more flexible through an alphabet share structure than through partnership, LLP or other arrangements. We can review alternative profit-sharing mechanisms for other family members if required.
- It can save tax, compared with being a sole trader, where profits are retained and later extracted as a capital distribution. This tends to suit project-based or short-term contracts because the company will normally need to be dissolved at the end of its life. It is also essential to avoid the targeted anti-avoidance rule, so it cannot be used for “phoenixing.”
- Some clients will only do business with a company.
- Limited liability helps protect the contractor's personal assets, including the home, from business creditors. This is because a company can sue and be sued in its own name. A separate entity is therefore regarded as a more professional arm’s-length mechanism through which contract terms are embodied.
- Some clients will only do business with a company.
- As a result of the above, (and especially for client who are public facing) a company can add credibility to the business offering.
IR35 review
Coman & Co is an independent chartered accountant in London. We assist the contractors both inside IR35 and outside IR35. A contract inside IR35 is one in which the working arrangement resembles employment. Contractors inside IR35 are taxed roughly the same as an employee. As accountant for the self-employed and small business, we can advise on typical hallmarks of IR35 and pointers as to practical steps to minimise expsure to tax. IR35 depends heavily on day-to-day behaviour and cannot be guaranteed in writing. Instead, we ensure the company’s records, filings and structure remain consistent with how the contractor actually works.
Cloud accounting and non-cloud accounting
It is not essential to use accounting software, however it can help credit control, year end and billing processes. Coman&Co are certified accountants with both QuickBooks and Xero. We can work with accounts prepared using other software such as Freeagent or from an Excel or Numbers spreadsheet based on a bank statement. We work from any records the contractor has: Xero, QuickBooks, FreeAgent, Excel, Numbers, PDFs or simply a bank statement. We adapt to the client rather than forcing software choices. If a client is overwhelmed and wants to focus on starting their work, it is acceptable to download the bank statement as a spreadsheet.
Fixed fee contractor accountant pricing
We offer accountancy packages, which start from £40 a month, although the most suitable packages are usually closer to £55 a month. An itemisation of annual costs can be reviewed on the pricing page. Our fees are cost effective because through experience and quantity of contractor clients, we can streamline in providing services.
Services included in our contractor accounting package
Our complete service for contractors includes:
- Forming a company, often possible in the same day. The first step is to form a company, which requires a name check through Companies House search.
- Registration for corporation tax, VAT and PAYE, as appropriate.
- The addition of a spouse, sometimes using an alphabet share structure, for tax efficient purposes.
- Pension, expense, use of home as office, and tax saving advice.
- Preparation of accounts, company tax return and corporation tax calculation
- Quarterly VAT filings (where registered)
- Payroll and RTI submissions.
- Annual registered office and company secretarial facility
- Advice on choosing a year end and dormant periods
- Saving tax through withdrawing funds from the company as dividends and salary
- Valuation of goodwill and other assets on incorporation
- Advice on owning assets personally or through the company
- Support through any tax enquiry
We can provide an efficient service based on thorough experience of tax and accounting for contractor companies. Meetings can be held face to face or by telephone. A dedicated accountant will be a consistent point of contact for each client. Reviews on Google and Trust Pilot from satisfied clients are testament to the quality of our offering. Please contact us for a professional consultation.
Comments