Contractors
At SMH Contractors Ltd our Chartered Accountants promise you three key things; first rate expert advice, a consistent point of contact, and value for money.
We are proud to say our professional staff are the most highly qualified and experienced available; they include Chartered Accountants, Chartered Tax Advisers, Chartered Financial Planners, and Legal professionals.
We are fully aware that our success depends on your success; that your best interests are our best interests. We would like you to be a client for many years, so you can rest assured that the advice we give you will take into account your short, medium, and longer term needs.
Appointing an accountant is a very important piece in your financial jigsaw. Getting the right advice at the right time is the only way you will maximise your wealth and reduce your taxes.
Our aim is to provide a streamlined service for all your contracting accountancy needs.
What is a Contractor?
If you work for somebody else for a fixed period of time for an agreed rate (hourly, daily etc) then you are deemed to be a contractor.
There are many benefits to being a contractor owning a limited company, such as:
- Increased Remuneration – Generally speaking, firms are willing to pay a higher rate for a contractor than an employee fulfilling the same role.
- Tax planning – If you get the right accountants in place, they can assist with reducing your liabilities and increasing your take home pay.
- Flexibility – As a contractor you get to pick & choose the roles you take and when to take them.
- Exposure – You can undertake a larger variety of assignments, give you experience in more areas.
Whilst the benefits often outweigh the drawbacks, it is worth noting the following:
- Increase in administration – As a company director there are rules & responsibilities that you must follow. This includes record keeping, forms, deadlines etc. Of course, if you appoint a good accountant then these stresses can be taken away.
- Loss of employee perks – You will no longer be entitled to employee benefits such as holiday pay as you would have been as an employee.
- Uncertainty – What if the next assignment isn’t just around the corner? Fortunately, you always have the option of closing down the company and returning to life as an employee.
How do I form a company?
Once you have decided to form a limited company and to become a contractor, the first thing you need to do is register the business with Companies House so you can begin trading.
In order to form the company, we would need the following information:
- Proposed company name (sometimes a variation of your own name, but you can be creative if you wish)
- Registered office (this can be our offices if you prefer)
- Director details
- Shareholder details (who will own the business & who will receive dividends?)
Once the company is formed, you can begin trading. This process usually takes 24 hours.
When the paperwork from Companies House has been sent through to you, you can set up your business bank account.
The registration of your business and the application for certain taxes is all covered in our fees.
What happens when I have started trading?
Once the company has started trading, there will be many questions that arise.
- How do I pay myself?
- What expenses are allowable to offset against tax?
- When is my tax due?
- What about a company vehicle?
- What records do I need to keep?
Most contractor’s circumstances will be different and there isn’t a rule that will fit all. We feel our value is really added to your business by discussing your circumstances with you and assessing what your requirements from the business are.
We want to be proactive and forward thinking but we need you to interact with us and keep us up to date with your short, medium & long term goals. We will ensure that all allowable expenses are claimed by the business and that the maximum tax relief is obtained.
As part of our service we will provide a spreadsheet that you will need to complete each month and send through to us. This will record the business transactions and allow us to prepare accurate and complete accounts each year.
Value Added Tax (VAT)
If your business is going to turnover (generate in sales) over £85,000 per annum then you will need to register for VAT.
VAT is paid to you on top of your sales, and is paid by you on many of your expenses. If you currently charge £500 per day for your services, this would now become £500 + VAT and you would be paid £600 (being £500 + 20%). The extra £100 is the VAT element that will need paying over to HMRC after deducing the VAT paid on expenses.
On a quarterly basis you need to calculate the VAT you owe and pay it over to HMRC through your VAT return.
Being VAT registered does increase the administrative burden on the business but it is something that we can handle on your behalf.
We would use a text service to notify you that your VAT is due, we would then complete the return with the information you have provided to us and inform you of the VAT due.
There are various schemes in place that may be beneficial to your business. We would consider the use of these schemes on your behalf and decide whether or not they are suitable for you.
If you have any questions about our business or our services please feel free to call our head office on 01142 664432 or email info@smh.group.
Our Services
Limited Company Contractors
All of the these services can be provided for a fixed fee.
VAT Registered Limited Company Contractors
All of the these services can be provided for a fixed fee.
Other Services
The key difference with using ourselves rather than another firm of accountants is that you can access a wide range of additional services which will enable us to look after all your financial needs under one roof.
