Whether you are new to contracting or have been contracting for some time, there are a number of important considerations to be made, particularly in the tax arena.
Tax can be quite a difficult area for both the contractor and the business using the services of a contractor but a key area to get right is the contractor’s IR35 status.
HMRC introduced IR35 in 2000 in order to tackle tax and National Insurance avoidance schemes through the use of intermediaries such as personal service companies or partnerships.
As a result of IR35 it is critical to determine in light of the tax rules whether you are self-employed or employed.
The difficulty is in respect of whether the contractor is deemed as self-employed or whether an employee for tax purposes.
The tax rules are complex but we have extensive knowledge of these rules and the industry to help navigate you and your business. We can help you understand and meet your requirements as well as ensure that you have a tax efficient structure, maximising your allowable expenses and minimising your overall tax liability with a tailored remuneration plan.
The Construction Industry Scheme
For those contractors and subcontractors in the construction industry, the Construction Industry Scheme (CIS) is likely to be relevant to you.
As a contractor you have certain obligations under the CIS, including registering with the scheme, checking whether your subcontractors are registered with HM Revenue & Customs (HMRC), paying subcontractors (net or gross of tax depending upon the subcontractor’s status), preparing deduction statements and submitting monthly returns.
In addition to providing usual tax and business advice, we can help by reviewing proposed subcontractor contracts to ensure that it does not constitute an employment contract. We can also help you complete your CIS returns and meet your CIS obligations.
If you are a subcontractor it's important that you register with HMRC, understand your status under the CIS and keep the contractor (and HMRC) informed of any changes to your business, to ensure that you are paid the correct amount.
Again, in addition to providing usual tax and business services, we can assist you - contact us.