As mentioned in our contractor guide, no matter how you decide to operate, it is essential to speak with an accountant BEFORE you decide. They will be able to advise the optimum route for you, based on your individual circumstances. An accountant will also be able to explain the advantages and disadvantages of each of the routes open to you in more detail than this site.
When choosing an accountant it is advisable to choose one that has experience in dealing with contractors. They will be up to speed on the way contractors work and on IR35, S600 etc. Personal recommendation is an excellent way to find an accountant. Speak with other contractors. As with most services, there are a number of accountancy firms/umbrella agencies who overcharge contractors, misrepresent their product and generally give a poor service, which is why we will shortly be reccomending you the best. In the meantime tell us your experience with accounting/umbrella companies!
Unlike puppies at Christmas, accountants are not for life. If you find that you do not get on with your accountant, or that the service is not as good as you thought it would be, then you can change. The best time is after a year end.
Preparation of Company Year End Accounts
Expect to pay anything from £500 to £1000 per year for your accountant.
No. If you are operating PAYE or through an Umbrella company then you probably do not need to use one.
If however you are a limited company, it is advisable to use one. Many contractors do some of the accounting themselves e.g. payroll and VAT returns and leave the rest to a professional. Remember, as a company you will have statutory obligations, and your accountant will help you comply. Also, as the tax and NI rules change, it is important to have someone who is up to speed on the latest regulations handling your affairs. You do not want to be paying unnecessary tax or NI.
The downside of contracting is that you do get involved in paperwork. PAYE and Umbrella companies reduce this substantially, leaving you with a minimum amount of work.
The most important piece of paper is your timesheet. Keep up to date with these, and any invoices you have to raise to accompany them. If you do not, you will not get paid! Every time you issue an invoice, or send a timesheet to an agent, keep a copy.
Retain a copy of receipts when purchasing goods
and services for your company.
It is also the company's responsibility to operate PAYE and
record all statutory deductions, declaring these payments to
the Inland Revenue on a regular basis, usually monthly.
You can see that very soon you will need some sort of record keeping. Set up a system. Again, your accountant will be able to advise.
No matter what sort of system you set up, it is vital you maintain accurate up to date records.
Taxbuddies www.taxbuddies.com - Provide accountancy services at every level of operation whether you are self employed or need to manage limited company accounts. They have particular expertise in recouping income tax rebates and also place special emphasis on the management of tax returns. Their 80 strong team comprise of qualified accountants and senior ex Inland Revenue staff.
Atlantic Umbrella Company www.atlantic-umbrella.com - Contractor Umbrella Company for Administration, Tax Mitigation and Payroll Solutions
