Contractor Accountancy Guides
A professional contractor accountant can advise you on the best way to handle your contractor finances to extract maximum returns, using their experience and up to date knowledge of the relevant legislation and regulations.
Acquiring this sort of knowledge takes time - time during which you will probably miss some opportunities, and that you could otherwise be devoting to paying IT contract work, making DIY an expensive option. And, like many other potential up-front saving methods that look tempting, cutting back on professional contractor accountancy support is likely to have a high cost in the long run. We have recently launched a dedicated site - http://contractoraccountants.co.uk/ so check there for other guides and information.
Limited Company Accounts
Tax accounting for IT contractors is something of a specialised area and having a good accountant look after your limited company accounts will ensure you won't pay too much tax over the lifetime of your contracting career. A good partner will offer a personal service, be on hand to answer any questions you may have and get to know your business. They will calculate your PAYE and NICs, your quarterly VAT, prepare your year-end accounts and complete your annual return for you, as well as calculate your corporation tax liabilities. In addition to advising you on issues such as IR35 and S660, they will also deal with HMRC enquiries and some will prepare your self assessment return.
We recommend you speak to other IT contractors for personal experience of accountancy service providers (try our forum). Ask accountants what qualifications they hold, what they charge and exactly what is - and isn't - included in that charge. How and when are you billed for their services? Ask if you can speak to existing clients before signing up to find out what support is on offer throughout the year. And, of course, make sure they do specialise in freelancers and work with other IT contractors.
As well as handling your accounting and financial planning, accountants specialising in freelancers will also have in-depth knowledge of complex tax issues affecting contractors and freelancers such as S660 and of course IR35, hence you'll hear the term 'IR35 accountants'. Such accountants are versed in maximising the pay you take home while minimising the forms you have to complete, well as keeping you compliant with legislation. Services can range from tailored tax advice to IR35 contract reviews.
Further reading on contractor accountants:
How to choose an IT contractor accountant
Tips and considerations for choosing the best provider for your needs.
Do I really need to pay an accountant?
An expensive substitute for common sense and a little research, or can they make a genuine positive difference to your profitability?
Changing your accountant
Because of the level of trust required and the potential risks associated with failure, an IT contractor's relationship with their provider is necessarily a special one. But what should you do when it comes time to bring that relationship to an end?
Do I need to pay a contractor accountant for financial and tax advice?
Assessing the cost and relative value of professional tax advisors and accountants.