Are you thinking of winding up your limited company – possibly as a result of retirement, or due to the Off-Payroll (IR35) rules? Perhaps you want to sell all or part of your business to someone else?
Tax / Accounting 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
- Find out what dividends are and how they are taxed
- What is the most tax-efficient salary to take in 2021/22?
The profits generated by UK companies of all sizes can be distributed to shareholders in the form of dividends. Limited company professionals, such as contractors, typically draw down the bulk of their earning as dividends.
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.
If you are a limited company director, what is the most tax efficient salary to pay yourself in 2021/22? This depends on your eligibility to claim the Employment Allowance.
A guide to National Insurance for IT contractors. How NI works, and the prevailing rates and thresholds for employees’ and employers’ NICs.
Investing in improving your own skills or those of your employees can give you a crucial edge when it comes to pitching for new contracts. However, before funding training via your limited company, it’s important to know what you can – and cannot – claim as a deductible expense.
However you decide to work as a contractor – via your own company, or an umbrella – or if you’re a self-employed freelancer, you must keep your financial records safe for a number of years. How long depends on the type of tax.
At some stage, whilst working via your limited company, you may face a situation where you need to relocate to take up a new contracting role. You may be able to offset your moving costs against your company’s tax bill.
Can you lend personal funds to your limited company, and how are interest payments treated for tax purposes?
How are finance and interest costs are treated for tax purposes, and which typical expenses can be offset against your limited company’s Corporation Tax bill?