As a Limited company, it is extremely important to keep on top of your accounting obligations. With so many deadlines to remember and documents to submit, it is little wonder that the majority of contractors seek the help of an accountant.
While all qualified accountants should be able to manage the books of your average Limited company, many contractors still choose to hire a specialist. This is because the knowledge that your accounts are in the hands of an expert can provide an extra layer of security, and allows you to concentrate solely on running your business.
Despite this, the fact that some high street suppliers offer a cheaper service may still prove tempting to many contractors. This is why we have compiled a few key reasons why you should trust a specialist to take care of your accounts. Continue reading
Contractors and the self-employed have been handed yet another boost, as new research suggests that working for yourself is becoming even more mainstream.
Hot on the heels of the Recruitment and Employment Federation’s (REC) statement that contracting is no longer classed as a second-class career, think tank IPPR has now revealed that the UK is fast becoming the ‘self-employment capital’ of Western Europe. Its latest study shows that the proportion of British people choosing to work for themselves rose by a whole percentage point over the last year.
IPPR’s figures showed that between the first quarters of 2013 and 2014, the number of self-employed people in the UK increased by 8% – a result only surpassed by a handful of countries in southern and eastern Europe. Some 4.5 million Brits now work for themselves, a rise of 2.5 million in the past 13 years. Continue reading
Contractors and agency staff are vital to ensuring that complex projects are delivered on time and on budget, according to the government.
The comments came amid mounting criticism surrounding Whitehall’s use of consultants, a trend that has been branded “wasteful” by opponents. Figures obtained by BBC2’s Newsnight programme found that £317 million was spent on contractors last year, while a separate study revealed that the Ministry of Defence (MOD) shelled out a further £137 million.
Newsnight’s investigation showed that at least 30 people were on contracts paying between £1,000 and £2,000 per day, while a consultant working for the MOD pocketed up to £3,000. The news provoked outrage among unions and lobby groups, which claimed that taxpayers would be “extremely concerned” about the findings. Continue reading
They may look innocent enough, but news site Contractor Calculator has warned that HMRC’s controversial benchmarking letters should be approached with caution.
Supposedly designed to help contractors and other businesses ensure that their tax returns are completed more accurately, the documents have been criticised as being a cynical ploy to extract more money from unsuspecting individuals.
HMRC claims the policy stems from research in other countries which suggests that informing businesses how similar firms in their profession are performing can help them get their tax returns in order. The Revenue has already monitored specific sectors and calculated their average profit margins. Continue reading
Last week, ClearSky queried whether a planned review into employment status would benefit contractors.
The study will be carried out by the Office of Tax Simplification (OTS) and is designed to look into whether the dividing line between traditional employment and self-employment is drawn in the right way. It also intends to further explore sectors and types of engagement that experience the most difficulty in following tax rules in the hope of ironing out any uncertainties.
Despite the OTS believing the review could yield “significant reforms”, ClearSky’s managing director Derek Kelly thinks differently. Continue reading
Contractors who took part in offshore “loan” schemes to avoid paying their fair share of tax have been handed the opportunity to settle with HMRC “on the best possible terms”.
Described as being “particularly aggressive”, the schemes involved complex arrangements whereby individuals signed a contract with an offshore company. They then received their pay from this third party via what was claimed to be non-taxable loans, rather than as income. Continue reading
Taxes on income, earnings, profits and spending account for a considerable proportion of the taxman’s revenue. When grouped together, they make up 85% of the funds flowing into HMRC’s coffers each year.
However, for many contractors, the UK’s tax regime is viewed to be one of the most confusing and challenging obstacles to running their business. It may therefore come as no surprise that a leading economist has urged the next government to overhaul the entire system.
Andrew Sentance, PwC’s senior economic advisor and former member of the Bank of England Monetary Policy Committee, claims that the future chancellor should look to create a tax regime that is fit for the 2020s and beyond. Continue reading
Contractors may soon benefit from “significant reforms” to the way employment status is defined, according to the Office of Tax Simplification (OTS).
The remarks came following the announcement of a review into whether the dividing line between traditional employment and self-employment is drawn in the right way. Its main focus is to examine how existing rules and guidelines “fit” with situations in the labour market where individuals have multiple roles.
In addition, the sectors and types of engagement that experience the most difficulties in administering tax rules will also be explored. This is due to the “significant tax and NIC differences between employed and self-employed” that, if incorrectly interpreted, “could be very costly.” Continue reading
ClearSky has climbed the accountancy industry’s definitive league table after recording a virtually unmatched increase in earnings.
We achieved year-on-year revenue growth of 43%, posting fee income of £6.71m for 2013/14. The leap in turnover saw us climb 14 places in Accountancy Age magazine’s latest Top50+50 survey – from 87 to 73.
Only two practices featured in the annual list of the UK’s 100 biggest accountancy firms posted a higher rate of fee-income growth. Continue reading
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