Contractor Tax
Tax is always high on the agenda for any contractor, with most looking to legally minimise the amount of tax that they are obliged to pay.
Tax mitigation can take many forms, from understanding the tax allowances available to contractors using different business types and payment models Whether working though an umbrella company, as a sole trader or running a limited company, the tax allowances differ for each model, with the rates of tax and national insurance payable, changing on an annual basis sometimes more often.
With tax affairs often intertwined with legislation, it is important for contractors to understand the correct tax issues that affect them in business and personally to ensure that they maximise their income but more importantly, that they don’t fall foul of the system.
Personal taxation is an important issue for contractors with many having to submit annual tax returns to HMRC, therefore it is important to be aware of the tax deadlines applicable to submitting returns and make payments of any tax due.
There is also the area of tax planning to consider, typically aimed at higher earning contractors, there are opportunities to mitigate taxes even further than through traditional methods, however as with all solutions of this type, they are based on the small print of tax legislation, which can and often does change, so contractors should always make sure they are fully aware of the details of any scheme and get professional advice before considering this route.
