Latest News
How Tax Works When You Set Up a Limited Company as a Contractor For a lot of contractors in the UK, setting up a limited company is the most flexible, professional and - if you do things the right way - tax-efficient way to work. However, the tax responsibilities that come with running your own limited company are more complex than working as a sole trader, freelancer or under an umbrella company, which can complicate things ever so slightly. As a limited company contractor, you are both a company director and (usually!) a shareholder, which means tax applies at both company and personal levels. If you’re new to running a limited company, this will be a huge change to what you’re used to. At Go Limited , we know how important it is to understand how tax works when you set up a limited company as a contractor. In fact, it’s essential for staying compliant with HMRC and making informed financial decisions. Below, we’ve taken a look at how limited company tax works, what taxes you need to pay and the mistakes that commonly catch contractors out.
Closing a Limited Company What You Need to Know There’s a lot to love about running a limited company. You have the flexibility of managing your workload and being your own boss, and the freedom to run your business in a way that works for you. But, regardless of the advantages, there might come a time when you’re ready for something new. Whether you’re heading back to full-time employment, retiring or deciding to pursue a new profession, having a limited company doesn’t have to hold you back, but you will need to draw things to a close beforehand. At Go Limited , we know how much effort goes into setting up a limited company, and we know deciding to close doesn’t come easily. Once you’ve made the decision, you probably want things to move along relatively quickly, which is why you need to know how to close things down properly.
Are Contractor Accountants Worth the Cost? As a contractor, you’re probably used to doing a lot of things yourself. You run your own business, manage your own workload and decide which projects to take on. Whether you’re a sole trader, freelancer or contractor operating through a limited company, you are in control. However, this can become a burden when it comes to business finances. Unless you have a fair amount of experience with managing business accountants, keeping on top of expenses and planning for tax, everything can spiral into a huge stress. At Go Limited , we understand the appeal of handling everything yourself as a contractor. But, if you want to truly dedicate time to your business, clients and professional growth, it’s likely that something needs to be delegated. More often than not, it makes sense for this to be accounting. This is where contractor accountants come in.
Selecting the Right Accountant for IT Contractors Regardless of the specific IT services you provide, how long you’ve been contracting for and how experienced you are at managing your own business, the idea of hiring an accountant has probably come up. When you consider the time, stress and energy that goes into contracting accounting, it’s easy to see why many contractors don’t want to take a do-it-yourself approach. Though there’s nothing wrong with DIY accounting as an IT contractor, it’s a lot easier if you hand everything over to a professional. But, you can’t enlist the help of the first person you find. At Go Limited , we know how daunting it can be to put your accounting, bookkeeping, tax and expenses into someone else’s hands. That’s why we help you to find an accountant you can really rely on. To get the most out of working with an expert, you need to select the right accountant for IT contractors.
How to Reduce the Risk of a Tax Investigation There are a lot of reasons to become a contractor. Whether you decide to approach contracting as a sole trader or set up a limited company, there are a lot of benefits to doing so. But, there’s one thing that holds some people back - the risk of a tax investigation. At Go Limited , we know the idea of undergoing a tax investigation is enough to fill you with dread. But, what if we told you it’s nothing to worry about? Armed with the right information and an idea of how to reduce the risk of an investigation, you can throw yourself into contracting without a second thought. As long as you stay on the right side of HMRC, a tax investigation isn’t something you need to worry about.
Expense Tracking Tools for Contractors There are a lot of financial benefits that come with running a limited company as a contractor. But, there’s also a lot of responsibility, especially when it comes to bookkeeping and accounts. For a contractor with a limited company, one of the key areas to pay attention to is expenses. When done properly, expense tracking can reduce your Corporation Tax bill in a considerable way, ensuring you claim every allowable business cost. However, expense tracking is often overlooked, which can lead to missed tax reductions, confusing accounts and potential issues with HMRC. At Go Limited , we’ve seen for ourselves how important expense tracking is and why having a limited company expenses spreadsheet isn’t enough. Below, we’ve taken a look at the tools limited company contractors commonly use, and we’ve shared some of top tips to help stay organised, compliant and on top of expense tracking.
What Expenses Can You Claim as a Limited Company Director? There’s nothing quite as rewarding as running your own business, especially if you’ve gone from being a sole trader or freelancer, to a contractor who’s set up your own limited company. Being a limited company director gives you a lot of flexibility, control, and the opportunity to grow your business on your own terms. But, with that freedom comes responsibility, especially when it comes to managing finances and understanding what expenses you can claim. At Go Limited , we’ve seen even the most experienced limited company directors miss out on tax savings because they’ve forgotten to claim tax deductible expenses, and we’ve seen others get dangerously close to HMRC penalties for claiming the wrong thing. Below, we’ve taken a deep dive into what you can and can’t claim as a limited company director.
How Contractors Can Reduce Overheads — Without Risking Quality Running your own business can be incredibly rewarding; you’re in charge of your workload, your clients, the projects you take on and the way your business is managed. But, with that comes responsibility and one of the biggest challenges contractors face is keeping overheads under control, whilst also making sure service quality doesn’t suffer. At Go Limited , we know that overheads are inevitable in any business, but that doesn’t mean they should eat into your profits. We’ve taken a look at how you can reduce overheads, without compromising quality.
Importance of budgeting for contractors The world of contracting is evolving, with more and more professionals realising the benefits of being a self-employed, ‘be your own boss’ worker. There’s freedom and flexibility, and a number of financial benefits to enjoy. But, that’s only the case if you keep on top of things. Though your focus is likely to be on completing projects, speaking to clients and business growth, you do need to think about the financial side of things. This includes expense management, an area that relies heavily on budgeting. At Go Limited , we know that budgeting and expense management aren’t the most exciting parts about being a contractor. We know that you didn’t set up a limited company because you wanted more paperwork to deal with. But, we also know that limited company expenses are how you operate in a tax-efficient, compliant and organised way. To take full advantage, you need to understand the role of budgeting in expense management, and what that means for you as a contractor.