What is contractor tax?
Contractor tax occurs in two ways within a limited company. The first being the tax you pay through your company and the second being the tax you pay personally. The tax which a contractor pays through the company is known as Corporation Tax, the personal tax paid will be Income Tax and National Insurance Contributions.
Corporation Tax – All limited companies will pay this on their profits. This is a set percentage according to HMRC regulations.
National Insurance Contributions – This is a percentage you and your company will pay on your salary you pay to yourself.
Income Tax – This is a percentage based on the income from your limited company on either salary, dividend or both.
VAT – Value Added Tax is a sales tax added to the price of most goods and services sold in the UK, and therefore applies to contractors who work through their limited company.
How can a contractor tax adviser help you?
Tax advisers are fully trained in tax law, and have high levels of knowledge and experience within the accounting sector. Their guidance and advice will provide many benefits to your company and to you as a contractor.
These benefits include helping you to organise accounts, navigate HMRC requirements and guide you through the set-up of formats, such as VAT and payroll.
The contractor tax advisers at Perrigo Consultants also have an
in-depth understanding of many different types of businesses and are able to use their talent and experience to help with any accountancy and tax queries you may face.
In addition, a tax adviser can often help contractors who don’t have time to fill out tax forms such as self assessments, VAT returns and CIS returns. A tax adviser can act as a useful contact to your company in these busier periods.
How contractor tax advisers could save you money
The aim of a tax adviser is to get your tax accounts done as efficiently as possible, which effectively means that they will help to identify all areas of tax wastage and may save you money. The ways in which they do this are through skills such as:
The government creates many legitimate opportunities for businesses and contractors to save money on tax, however these are often overlooked by many, due to an individual’s lack of knowledge and experience within the accountancy industry. However, a tax adviser has the information and knowledge regarding government incentives and schemes that your business may be eligible for.
A tax adviser has optimum access and time to review each government tax law and obligation and will therefore have the tools to assess how any changes or updates may affect your business.