A limited company contractor in the banking and finance sector has many advantages compared to other forms of employment. A recent study by Michael Page disclosed that Banking and Finance is the most popular sector of all temp/contract hires worldwide.
ClearSky’s personal accountants know the ins and outs of life as a banking and finance contractor, and can assist your move to self-employment as a limited company director.
Limited Companies and the Banking and Finance Sector
Contracting within the banking and finance sector is an astute career option worth full consideration.
Given the uncertain nature of UK, European and Global markets, there is an increased need within companies and the public sector for knowledgeable and potentially transferable skill sets, even on a short-term basis. In the face of a fluctuating global economy, strong financial services credentials in real-time will suit the needs of business as change happens.
Whatever level of banking and finance you work in, contracting as a director of a limited company gives you flexibility in a number of ways.
You can make more money
We’ve yet to find the person that wouldn’t like better pay.
For banking and financial sector contractors, compensation is markedly better than it would be for permanent workers in the same sector. Particular perks of limited contracting like paying yourself through a combination of salary and dividends help with this.
For more insights regarding what you could earn through a limited company, try our contractor calculator from ClearSky. As an example, consider a day rate of £192.31 (i.e. £50,000 per year) and see what happens. Through the calculator, you can also review what you would earn through working for an umbrella company such as our sister company Parasol.
The umbrella company option at Parasol is likely to improve your take home pay from PAYE. And if you’re already with an umbrella company, going limited with ClearSky means a £500 per month improvement. Because for bankers and financial services professionals earning £35,000 and above, limited company contracting through ClearSky works out better for overall take home pay.
You can realise a more tax efficient way of working
Taking home more money is one thing: reducing your tax obligations in the process (and doing it in a compliant manner) is one reason ClearSky is the leading banking and finance contractor accountant for you.
Claiming capital allowances is one way you can get more from a limited company. By purchasing items sooner, you can get tax relief earlier than planned – often earning as much as 100% of the amount you’ve paid. Assets like equipment (including laptops, phones and iPads), machinery or even some kinds of business vehicles (make sure they are fuel efficient)[i] can all make this possible.
You’ll benefit from a positive perception of contractors
The sense of a contractor as the clerical temp that will be gone in three weeks is no more: the aforementioned Michael Page study reveals that 3 out of 4 contractors have a positive perception of their work and prospects.
The general good view about contractors has been commonplace for longer than you might think. A King’s College London study by David Guest and Michael Clinton in 2006 revealed that:
“Contrary to expectation, workers on temporary contracts reported better wellbeing, better general health, more positive attitudes towards work and better work behaviour than their permanent counterparts. This was found for virtually all the measures.”
In the banking and finance sector, there’s reason for even more confidence. Contractors and interim professionals have become increasingly crucial, as permanent staffing is in shorter supply. Robert Half’s Accounting and Finance Salary Guide revealed that 90% of HR directors admitted they would adjust so that:
“Over the next five years the traditional workplace will evolve to allow temporary and interim professionals to play a greater role.”
You can be your own boss, but keep your workload minimal
The first thing you’ll experience as a contractor is the chance to work for yourself. This means you’ll have complete control over your limited company and will have the privilege of running it in the manner you see fit.
At the same time, you want to ensure that the business side doesn’t take your focus away from the obligations to you assignments. Through a contractor accountant that works with banking and financial services professionals like ClearSky, you’ve got the support you need to work with HMRC
Forming a limited company could be the most profitable way for you to work in banking and financial services. ClearSky Contractor Accountants have helped thousands of contractors set up and manage their Personal Services Company (a form of Limited company) over the years.
We’re committed to offering you expert advice to manage your finances in the most tax-efficient way possible. As a founding member of the Freelancer and Contractor Services Association (FCSA), compliance is at the heart of everything ClearSky offers to their clients.
We’ll be with you all the way throughout your contracting career, whenever you need us. We understand everybody’s different, so we’ll offer candid and customised advice that easily suits your own personal circumstances.
 Michael Page’s “GLOBAL INSIGHTS: The changing landscape of temporary employment and interim management,” reveals that amongst all contractors/interim managers, those in banking and financial sectors make up the most popular sector. Likewise, recruiting managers in Banking and Financial Services are the second most popular type of recruiter by industry.
 Everything from Tax to National Insurance to Flat Rate VAT can work in your favour. Bottom line – with the leading banking and financial contractor accountants to assist, you can reduce what you owe the taxman.
 From our Guide to Employment Benefits for Limited Companies: “This is probably the most common benefit issued by company directors. The taxable amount is usually 5% to 37% of the manufacturer’s list price, including accessories. The tax you’ll pay depends on the car’s carbon dioxide emissions.”