Depreciation is the accounting term for the devaluation of assets over time. Here we look at how any assets you may buy (such as a new server or PC) are treated for tax purposes in your company accounts.
- 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?
Keeping accurate accounting records is an essential task for every successful contractor. Not only can you ensure that you stay on the right side of the taxman, but you should also be able to see exactly what your financial situation is at any moment in time.