As a limited company contractor, you may incur a variety of business expenses whilst undertaking your contract duties. Here, we look at how expenses are ‘allowable’ for tax purposes, and some common errors to avoid.
Tax Guides
- Limited company contractors have to account for company tax (Corporation Tax, VAT, Employers' NICs), and personal tax (Dividend Tax, Income Tax, Employees' NICs). In reality, a good accountant can take care of almost off of your administrative tasks.
- If you're an umbrella contractor, then your tax and accounting needs are very simple, as you're taxed as a standard employee - with tax and NI deducted at source.
- Find out about the taxes you'll encounter as a contractor, and how to pay yourself as a contractor.
Tax exemption for ‘trivial benefits’ provided by your company
There will be occasions when you may wish to provide small gifts to employees, throw a staff function or even treat yourself as the director.
What happens if you overpay company dividends?
When it comes to paying dividends to shareholders, the first thing a company’s directors should do is to check how much profit is available to be distributed. But what happens if you have overpaid dividends?
Which business travel expenses can contractors claim?
As a contractor, you may need to travel as part of your contract duties – within the UK, or even overseas. Which travel expenses can you legitimately claim?
Illegal (unlawful) dividends – what they are, and how to avoid them
What happens if you declare a dividend, but have insufficient profits in the company books to cover the declaration? Patrick Gribben explains how this can happen, and how to correct an error.
How the Dividend Allowance works – including an example
The ‘dividend allowance’ was put in place in April 2016 – it means that the first £2,000 of dividends you receive are tax-free. But how does this allowance work in practice for company owners?
How to calculate student loan repayments as a contractor
Many people have outstanding student loans when they start contracting, but how you calculate and make repayments if you’re working for yourself, and not a ‘traditional’ employer?
Claiming computer hardware and software expenses via your company
If you need to buy a new PC or upgrade your software, how are these expenses treated for tax purposes? Here we explain how technology costs are accounted for, and look at the rules which govern the treatment of computer-related purchases.
Employment Allowance – is your limited company eligible?
Limited company ownwea can save hundreds in tax thanks to the new Employment Allowance, which allows companies to reclaim up to £3,000 in Employers’ National Insurance Contributions.
National Insurance for limited company contractors
A guide to National Insurance for IT contractors. How NI works, and the prevailing rates and thresholds for employees’ and employers’ NICs.
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