All Limited Company contractors will have to deal with tax at some point.
We have put together a list of useful tax tips to help contractors come to terms with the subject quickly.
1. Make sure you are claiming for all expenses relating to your business activity
From expenditure such as a Laptop, Computer to telephone costs, insurance.
2. Keep all copies of invoices and receipts to back up your claims
HMRC recommend you should keep all business records for six years.
3. Ensure submissions of relevant paperwork are on time
You should submit your accounts, VAT, RTI and annual returns on time to avoid any fines or penalties.
4. Check with your accountant whether your company would benefit from the flat rate scheme
FRS allows you to pay over a percentage of your Gross invoice amount as opposed to the 20% on standard VAT.
5. Ensure that you claim for any startup costs for the company
Any formation costs incurred can be claimed however no tax relief is received on these.
6. Claim for use of home as office
HMRC recommends a set amount of £208 per annum, however if you excessively work from home you can use a different method which involves claiming a proportion of general household expenses (speak to your accountant).
7. Ensure you have appropriate bookkeeping software
Don’t make life hard, most bookkeeping software (FreeAgent etc) will provide automated services which will save you lots of time. Also this should be able to give you an estimate of your corporation tax insuring you keep enough aside to make these payments.
8. Appoint a good accountant!
We’ve all heard the phrase “a good accountant does not cost you money, they make you money”. Make sure your accountant is working for you, ensuring you are operating in the most tax efficient way.
Ready to appoint your specialist contractor accountant?
We get to know your company meaning we can advise on what expenses you should be claiming and ensuring you operate most efficiently.
If you have any questions please do not hesitate to contact us.
