A guide to the main taxes you will encounter as a limited or umbrella company contractor – including; Corporation Tax, VAT, National Insurance, Income Tax and Dividend Tax.
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.
Self-Assessment for contractors – completing your tax return
If you’re a limited company director, or receive additional income upon which tax is due, you’ll need to complete a tax return each year. How to register for self-assessment, pay your tax liabilities, and avoid penalties.
How Capital Gains Tax (CGT) works
Capital Gains Tax is charged to you when you sell or dispose of an asset and it has grown in value, or you have gained a profit out of the sale. Here we look at how the CGT rules work in practice.
Company car vs. own vehicle – claiming tax relief
Many contractors travel by car on business – they may be visiting client sites, or attending conferences and training sessions. However, when it comes to claiming tax relief for the costs of these journeys, the rules can be confusing.
Marriage Allowance – are you eligible for this £250/year tax break?
Are you one of the millions of people who are eligible to claim the Marriage Allowance, but haven’t done so yet? Here we explain how this allowance – worth £250 per year – works, and how to claim it.
Your company cannot pay its tax liabilities, what should you do?
There are many reasons why a company cannot pay its bills. Sadly, many times this is due to directors’ taking out more money than is available to them, which can lead to HMRC penalties and fines. So, what happens if you’ve accidentally draw down too much of your company’s money?
Self-assessment – what are payments on account?
Payments on accounts are part of the self-assessment process and mean that you have to pay your next year’s income tax liabilities in advance, based on the amount you owed on your last tax return.
Can you borrow money from your own limited company?
There may be times where you need to borrow money from your own limited company, or you may have unintentionally done so whilst drawing down funds. What are the tax implications of doing so?
Common self-assessment tax return errors to avoid
If you’re a limited company contractor, before 31st January next year you are likely to have to sit down and get to grips with your Self Assessment Tax Return (SATR).
Capital allowances – tax relief on company assets
Capital allowances allow you to claim tax relief on assets you buy for your business. The value of these items can be offset against your company’s profits over time. So how do capital allowances work in practice?
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