Ensuring Compliance while Contracting
The whole point about becoming a contractor is to allow yourself to concentrate on the thing you love – the work itself. What use is there in going into contracting if you then end up spending all your time dealing with your accounts and tax issues? And you certainly won’t have the time to stay on top of all the latest tax legislation that is published by HMRC and HM Treasury every year or to keep abreast of any changes to the Companies Act! That’s why you need a registered accountant who is required to keep up with all that stuff as part of their CPD (continued professional development.) Their ongoing study means that they will stay abreast of all the latest changes so you don’t have to!
This is especially important for contractors who tend to find themselves disproportionately affected by changes coming down from HMRC. Any good contractor accountant will know their way around every last detail of IR35 legislation, Managed Service Company legislation and anything else to do with intermediaries or retention of earnings. And they will be the first to hear about any planned changes, allowing you to prepare and adapt!
Working as a Strategic Partner
It is that ability to prepare and adapt that makes a good accountant so important and why it is essential to get a good one from the outset. Whatever plans you have for the short, medium or long term, if you involve a good contractor accountant from the outset they will be able to put in place measures for you from the beginning which ensure your company can get to where you want it to be. They will also ensure that the journey along the way is a smoother one, paying less tax and taking no risks. They will be able to walk you through all of the rules and regulations relating to smaller companies and will show you all the options open to you for managing your income as a contractor.
An Accountant Specialising in Contracting?
Once you have realised that you do need an accountant the next thing to decide is whether you should seek out a specialist contractor accountant. And the answer is absolutely, yes, 100% yes! Why? Because they are accountants who do nothing but concentrate on tax issues relating to the accounting sector, working with no one but contractors and who know every single last detail of contractor legislation by heart! These are people who have seen every way there is to maximise returns as a contractor and who know every trick in the book for staying compliant with the latest legislation.
They will handle all of your payroll, accounts, returns and record keeping issues and will be experts in IR35 and Managed Service legislation, the Companies Act and the different ways that contractors work. They can offer payroll advice and help you to decide whether your style of contracting is best suited to being a sole trader, a limited company or even to work for an umbrella company.
To summarise, a good contractor accountant will be worth their weight in gold and will repay their fees almost immediately in the savings and expertise they bring to your business.