The majority of IT contractors are VAT-registered. In this guide, we look at what Value Added Tax is, how and when you must register, and how to account for VAT and pay your liabilities on-time.
Contractor 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 all of your company's accounting needs.
- If you're an umbrella contractor, then your tax and accounting needs are very simple, as you're taxed as a standard employee. Tax and NI deducted at source.
- How are dividends taxed?
- What is a director's loan?
- The most tax efficient salary for a director
- Limited company expenses your company can claim
- Taxes your limited company must pay
- What is the Employment Allowance?
How the Flat Rate Scheme (FRS) for VAT works for contractors
The Flat Rate VAT scheme simplifies the way companies have to account for VAT. Here we explain why IT contractors, and other limited company professionals could pay less tax each year by switching to the FRS.
As a director, can I lend money to my limited company?
Can you lend personal funds to your limited company, and how are interest payments treated for tax purposes?
How often should you take dividends out of your limited company?
With dividend tax allowances lower than they once were and tax rates higher, the timing of dividend declarations is more relevant than ever for directors.
Close company dividend reporting for directors from the 2025/26 tax year
From April 2025, directors of close companies must give HMRC extra dividend details on their personal tax returns. What’s changing? and how to prepare.
How to avoid unlawful (illegal) dividends as a company director
Learn what makes a dividend unlawful, the risks for directors, and how to avoid illegal distributions. Practical guidance, HMRC rules, and real examples.
Benefits in kind 2026/27: from health insurance to cars, how the tax works
Benefits in kind 2026/27 for limited company directors: tax on perks, Class 1A NIC, key deadlines, and the move to mandatory payrolling from April 2027.
Self Assessment tax return guide for contractors and company directors
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.
MTD in 2025 for contractors: VAT live, ITSA from 2026, CT scrapped
MTD in 2025: VAT is live; ITSA starts from 2026 for sole traders and landlords (not limited companies); plans for MTD for Corporation Tax scrapped.
Depreciation in small company accounts – and why it matters
Learn how depreciation works in small company accounts, how it differs from capital allowances, and what it means for your Corporation Tax bill.