With lots of words and terminology to get your head around, entering the contracting world can sometimes be a little overwhelming.
Whilst your specialist contractor accountant will try their best to lose the jargon and speak in a language you understand at all levels of your career, sometimes a little bit of accountancy lingo may slip through. After all, we do live and breathe all things contractor accounting.
As always, we’re with you all the way, so we put together a handy list of contractor words and terminology that may be useful for you in your early career.
Contractor – a person who undertakes a contract of work to complete a specific job and for a specific period of time
End client – the business, organisation or individual that you are doing the work for
Expenses – something which you buy as a result of, or for, your work that you can then offset against your taxable income
Freelancer – someone who works for themselves and offers a particular service, or set of services, to clients
Go limited – the act of setting up a limited company and then running your business as a limited company director
IR35 – a piece of tax legislation aiming to identify disguised employees’ or those that aren’t necessarily deemed to be contractors, see more in our IR35 Guide
Limited company – an organisation that you can set up to run your business, see our what is a limited company guide
PAYE – Pay As You Earn, the way in which permanent employees pay their tax and national insurance contributions
Permanent employees – full or part time employees of businesses and organisations who are on permanent or open-ended contracts
Self employed – working for yourself rather than for an employer
Sole trader – someone who works for themselves as the exclusive owner of a business, they can keep all business profits but are also liable to business losses
Tax return – a yearly document that must be completed and returned to HMRC by those who are self-employed to declare their liability to be taxed, see more information on the HMRC website
Tax rebate – a tax rebate is money you will get back from HMRC if you have overpaid in tax during the tax year
Umbrella company – a contracting option, such as Parasol, whom provide you with the same employment rights and benefits as permanent workers
WorkStyle – the unique and personal ways that contractors choose to work, see our guide to WorkStyle
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