Generally, contractor accounting can be very complicated and subject to be compliant with IR35. Therefore, we have designed all-inclusive contractor accounting package that will provide everything you need to take the hassle out of running your company. Overall, the service package starts from £54.95.
What's Included in Our Contractor Accounting Package?
Understanding IR35 with your contract accounting (off-payroll working)
What is IR35?
Put simply, IR35 is imposed by HMRC to combat “disguised employment” by the forming of personal service company. Put simply, if you behave like an employee you should be taxed like an employee. Therefore, if you are not sure whether you are employee or a contractor, please contact Tax Care today for a free advice.
How Can IR35 affect your Contractor Accounting?
Ultimately, if your contract is found inside of IR35, you will not be qualified as a contractor. However, you may not be able to enjoy the same level of tax savings scheme if you are under PAYE/Payroll system. Consequently, HMRC may issue a huge amount of penalty notice and ask you to pay whole outstanding tax from the beginning of the contract. Moreover, this might put you in a difficult situation.
How is Your IR35 Status Determined With Your Contractor Accounting?
Overall, HMRC’s complex test considers a number of factors when looking at your contract and contractor accounting, including:
Direction and Control – firstly, how much control does your client have over your working conditions?
Substitution – secondly, do you have a replacement to undertake your work in the event that you cannot fulfil your duties?
Mutuality of Obligation – lastly, are you required to complete a specific task or is their scope for your client to ask you to perform additional duties?
How Do You Know If You Are a Contractor or an Employee?
In general, there are three major points determining your status in relation to the inside or outside of IR35 for your contractor accounting.
Substitutions: you can be substituted and somebody else can get the job done if your company sign a contract with another company.
Controllability: who is controlling you and how much control your client has over your work condition. Namely, do they treat you like an employee? Therefore, the level of authority and responsibility will determine whether if you are a contractor or an employee.
Length of contract and obligation: are you obliged to carry out the work at end of your contract? In particular, to qualify as a contractor, you must work from project-to-project, with no obligation to carry on working for the client after the contractual works are fulfilled. Moreover, there are some employees who work for same company at the same place for more than 5 years. However, they might not be qualified as a contractor by HMRC as they may not meet the definition IR35 of contracting.
Overall, if you are a contractor, you can terminate the contract at anytime whereas an employee has certain obligation to continue working when their contractual talks are complete.
How do I avoid this?
Firstly, you do not need a Tax Advisor to determine your contractor accounting status. For instance, you can ask the HR department to determine your status by reviewing your contract specially if you work as contractor for a large company. Moreover, contact Tax Care today and we will review your contract to ensure you are compliant.
Benefits with Tax Care Accountant
Account with us
Over 5 years experience in contractor accounting supervised by IFA.
Dedicated account manager who will manage your accounting and taxation issues.
Access to cloud based software. You can check your business financial performance.
Unlimited business advice and business support.
Exclusive access to Tax Care networking events.
Access to easy invoicing and easy payment. We can set up a payment link with your invoice so you can get paid fast for your job.
Access to our mobile app to scan and capture your expenses with a touch. It's time to go paperless - once you scan your receipts, the app will automatically analyse the receipt, enter the data and send it to your accountant. We will store the receipts for you for up to 7 years to meet HMRC requirements.
Download any report or payslip on any device from anywhere in the world.
Access to project accounting and financing. You can add certain expenses to a specific project. For instance, if you are a graphic designer you add the expenses of purchasing photos to the specific project.
We Have Great Answers
Yes, Tax Care Accountants is a certified accounting firm with a valid practicing certificate. Above all, the firm is fully compliant with HMRC Anti Money Laundering (AML) regulation requirements. Notably, every single client manager at Tax Care is a qualified accountant with industry experience who will be taking care of your business. Overall, the firm is regulated and supervised by the Institute of Financial Accountant (IFA) and HMRC recognised Tax Agent.
Overall, we work on the basis of a fixed fee with no hidden cost. Therefore, you will know exactly what and how much you are paying for.
Ultimately, most of our clients pay monthly by setting up a direct debit or standing order. Additionally, you can also pay your fees by instalments.
Yes. In particular, our clients are fully protected in case if there is a worst-case scenario of a huge loss.
In short, we strongly believe the significance of the popular accounting quote “behind every successful business there is a smart accountant”. Therefore, at Tax Care we work as a virtual extension of your company in order to free up your time, we advise you on how to save money and provide you the key financial information in order to make informed decisions. In brief, we will simplify your payroll, accounting and financial functions of your business and integrate all in one system. Therefore, this will help you to collect all relevant business information with one click. Moreover, your accountant can also help you analyse and understand your cash flow, so you can make better plans on how to work out your monthly budget, sale target, break-even etc. Additionally, we make sure your employees are paid correctly while your business is compliant with HMRC requirements, pension regulator requirements, court order requirements.
On the whole, our accountants have over 5 years of experience in the SME business community and their expertise and knowledge covers all business sectors – whatever your business, we cover it.
Yes, we do. Firstly, we fully understand the pressures that you are under and offer a wide range of commercial experience which can help with the development of your growing business. Overall, we believe a little growth in your business means a little growth in our business.
Ultimately, properly projecting your business’s cash flow is as essential as creating an effective mission statement and living up to it. For instance, tedious, detailed flow projections aren’t easy to wrangle, but that’s what you have an accountant for.
In general, your accountant should be able to help you develop an organised, effective cash flow model that allows you to adjust your operations in ways that help you survive shortfalls, as well as improve receivables and manage payables.
Most importantly, as a member of IFA, Tax Care Accountants must comply with continuous professional development regulation in order to keep up-to-date with current issues and regulations. Therefore, we regularly attend various seminars and training workshop regarding recent updates on accounting softwares, finance acts and government regulations.
No, Tax Care Accountants will manage all aspects of your business financial activities so you can focus on running and growing your business.
In particular, a professional certified accountant will be dealing with you directly to meet all of your accounting and tax requirements. Overall, we work as a team and one of the senior accountants will finalise the work.
Altogether, you can contact us as many times as you want to. For example, you can contact us via telephone, email or face-to-face. However, if it is necessary, we will also visit you. If so, we will explain to you the technical accounting terms and the accounting requirements in a simple language so you would know what to do and how to do it. In general, our response time 24 hours.
In brief, taxes are always part of running a business, and you can always look for ways to improve how you handle payments, deductions, record-keeping, and so on. Consequently, your accountant, the expert on tax laws and their constant changes, can give you the insight you need.
Particularly, your accountant can help you answer questions like:
- What are the latest changes in tax law that affect my business?
When is the best time to make big equipment purchases?
How can I best keep track of deductions?
How can I maximise my tax savings?
Simply, this might seem like too simple a question, but clear, effective and frequent communication is the key to a healthy, beneficial relationship with your accountant. Therefore, establish early on how often you’ll connect, either in person, on the phone or online (via a video chat app like Skype, Google Hangouts or FaceTime). Additionally, decide together if you’ll meet weekly, monthly or bimonthly.