Contracting Matters Blog
Ltd Co contractor optimum salary vs dividend split 2019/20
Posted by on May 21st, 2019 in Contracting Matters Blog
From the 6th April 2019, tax and dividend rates are changing. The changes affect how much of their income contractors can claim as salary to remain tax efficient. Here are the optimum levels of the dividend/salary split for sole director limited company directors.
The basics: HMRC taxable income 2019/20
HMRC has outlined personal tax allowance for the forthcoming tax years in typically wordy fashion. Here’s an at-a-glance table of what those allowances mean for all workers:Continue reading about Ltd Co contractor optimum salary vs dividend split 2019/20
Contractors’ most tax efficient salary and dividend levels, 2017/18
Posted by on May 16th, 2017 in Contracting Matters Blog
Here’s the Freelancer Financials’ guide to limited company tax planning covering 06/04/2017 thru 05/04/2018. It highlights contractors’ optimal salary and dividend levels for tax year 2017/2018.
Storyboard:
- Introduction: what distinguishes contractors from employees?
- This is how basic limited company tax efficiency works;
- Personal allowances for income tax, 2017/18;
- Taxes applicable to dividends for the 2017/18 tax year;
- Optimal salary for single- and multi-person payroll;
- Drawing dividends at higher tax bands: three safe steps you can take;
Continue reading about Contractors’ most tax efficient salary and dividend levels, 2017/18
Chancellor revokes contractors’ rights to decide payroll status
Posted by on April 7th, 2016 in Contracting Matters Blog
In the run up to the budget, the tabloids portended doom for contractors working through a PSC. For those working off-payroll in the public sector, those harbinger headlines became reality.
The Chancellor announced that PSCs will have no say in how public sector clients pay them. As of April 2017, it will be the client who decides if IR35 applies to an engagement.
Continue reading about Chancellor revokes contractors’ rights to decide payroll status
2016 Budget Further Undermines Contractors Working Through PSCs
Posted by on March 18th, 2016 in Contracting Matters Blog
So, the Chancellor used yesterday’s budget to continue his vendetta against contractors. In particular, he’s targeting contractors operating through personal service companies.
The reason for this fresh assault on independent UK professionals? To curb tax avoidance.
Not that most contractors create a limited company to save on tax. But if they had their way, that’s what the government and media would have you believe.
Continue reading about 2016 Budget Further Undermines Contractors Working Through PSCs
Which is best for contractors, umbrella or limited company?
Posted by on April 14th, 2015 in Contracting Matters Blog
Should contractors work through an Umbrella or through their own Limited Company? True, there are specific times when you’d consider an Umbrella more beneficial. But when it comes to applying for a mortgage, Limited is always better.
Continue reading about Which is best for contractors, umbrella or limited company?
Why contractors choose Limited Company payment structures
Posted by on April 13th, 2015 in Contracting Matters Blog
Casting off from the shores of permanent employed is a big decision. The stormy, but often lucrative, waters of contracting or freelancing await the intrepid adventurer. But before launching yourself into the deep, stop. Just for a moment, at least, to consider your options.
In particular, you need to think about your new business. What’s the best way to minimise your long term tax liabilities? How, at the same time, can you maximise your income? And how can you juggle the two to make it easy for your customers to deal with you.
Continue reading about Why contractors choose Limited Company payment structures
Umbrella Companies – A Guide for Contractors
Posted by on April 9th, 2015 in Contracting Matters Blog
So. You’ve secured your first contract. You’re with your recruitment agent, who says “Great. Now you need to find an umbrella company“.
Or you may not be quite at that stage. Instead, you’re mulling over leaving your permanent role to take up a contract offer. You’re not quite sure what that will entail. Now you’re researching ways to operate, umbrella companies being one such way.
To help you make the right decision, you need to know why umbrella companies were born. Moreover, what their role is today amongst the options open to you. Let’s go.
Continue reading about Umbrella Companies – A Guide for Contractors
The Contractor Lifestyle: Does it Live Up to the Billing?
Posted by on March 31st, 2015 in Contracting Matters Blog
From outside the world of contracting looking in, the rates contractors charge seem steep. Imagine someone thinking about self-employment, wondering where to pitch their service. It’s possible that seeing those hourly rates would give them an inferiority complex.
Or that same contractor may have entered the market already, accepting a lower rate of pay. They may well wonder what it will take to earn the big bucks they see their peers pocketing.
Continue reading about The Contractor Lifestyle: Does it Live Up to the Billing?
Why should I take an IR35 test?
Posted by on January 30th, 2015 in Contracting Matters Blog
As a contractor, you may think that your contract is watertight. You’re wrong. According to HMRC:
“There’s no such thing as an IR35-proof contract”
Can’t argue with that. We can, however, be proactive and find ways to prove that we’re not a disguised employee.
Continue reading about Why should I take an IR35 test?
5 Simple Steps You Can Take To Improve Your IR35 Status
Posted by on January 22nd, 2015 in Contracting Matters Blog
IR35, or intermediaries legislation to give it its proper name, is still here. And the signs are it’s not going away any time soon. To that end, you must safeguard your business against HMRC investigators, should they come calling.
Sounds simple, if you say it quick enough. But the fact is, 60% of contractors operate in the grey zone. Even worse, they don’t even know it.
Continue reading about 5 Simple Steps You Can Take To Improve Your IR35 Status
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