Gorilla Accounting is a firm consisting of specialist contractor accountants that tailor their services directly for sole traders and contract workers, offering a range of professional accountancy-based services to help you run your business more efficiently. Here we give some answers to the most common questions that we get asked regularly by our clients and new customers.
Specialist contractor accountants have a number of key responsibilities to you as the contractor to ensure that you stay within the current legislation and regulations around pay, as well as helping you to get the most from your business income. It is important that you deal with a specialist contractor accountant who understands current and upcoming legislation to advise you on the most efficient levels of income.
1. How does IR35 legislation affect me and what is it?
IR35 came into effect to help HMRC govern and regulate the amount of tax that a contractor will pay. Any specialist contractor accountant should have a detailed knowledge of IR35 legislation to be able to effectively calculate the amount of tax that you should pay as a contract worker and what is or not allowable. Although IR35 is a tax legislation, it also has some elements which overlap with employment law as well as using some of the same case law precedents and tests.
2. What is the most tax efficient way to pay through a specialist contractor accountant?
Specialist contractor accountants will calculate the most efficient way to run your payroll for you so that you get the most out of your pay. There are a number of ways in which a specialist contractor accountant can run to work in a way that suits you best depending on your needs and circumstances. A specialist contractor accountant should have detailed knowledge of up to date tax legislation and National Insurance Contribution levels so that they can effectively guide you and your Limited Company.
3. How can I claim expenses through my Limited Company if I am a contractor?
For anyone who is classed as a contractor working through their own limited company, they should be able to claim a number of legitimate work expenses which your accountant should be able to advise you on. Some high-street accountants may not recognise the fact that contract workers are eligible to claim expenses through their own limited company which can be costly for the individual. You should ensure that your accountant is fully up to date with current legislation and equipped to be able to effectively advise you on what you are legitimately able to claim for.
4. What are the most tax efficient ways for me to pay myself through my limited company?
There are a number of tax efficient routes for potentially taking income from your which your Specialist Contractor Accountant should be able to advise you on to help you receive payments whilst paying only the tax you should pay. After you have taken your salary and any dividend payments you should then have a number of options which include:
– Company pension contributions: Any contractor working through a limited company will be able to allocate a percentage of their income to a long-term pension scheme via contributions. This works in two ways as it helps with planning for retirement as well as reducing your tax liability in the longer term.
– Commensurate corporate tax reductions: A Specialist Contractor Accountant will be able to identify this option for you and direct you to your independent financial adviser to discuss in more detail.
A Specialist Contractor Accountant should be able to effectively identify which options are best for you and your business to ensure that you generate the highest returns based on your individual circumstances.
5. What advice can a Specialist Contractor Accountant offer for my long-term financial strategy?
As a contractor, you will generally have a clear plan of what your financial goals are for your business and when you would like to achieve these goals by. The most important thing to a Specialist Contractor Accountant should be helping you to achieve your financial goals as quickly and effectively as possible. This sounds as though it should be pretty obvious to most Specialist Contractor Accountants but you need to make sure that you are working with someone who understands and appreciates your requirements before you commit to working with them. An example of this would be the most common goal which is to achieve early retirement which can be achieved by your Specialist Contractor Accountant by good tax planning and effective timing of dividend payments.
The team at Gorilla Accounting are here to ensure you get the most from your contractor income as well as to achieve your personal and financial goals. Our monthly package includes a whole host of services to help your business to grow and to support you to make the best financial decisions making your income as tax efficient as possible.