Accountants for contractors and freelancers
Contractors and freelancers usually work either through a limited company or as sole traders. The key issues are IR35 status, the most efficient way to extract profit, and from April 2027 quarterly reporting under Making Tax Digital if you are not incorporated.
What usually goes wrong
These are the four things we most often find when a new contractors & freelancers client brings us their last couple of years.
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Your IR35 position has never been properly assessed
Since April 2021 the end client usually determines status for medium and large engagements, but the consequences still land on you. A wrong determination is expensive and worth challenging.
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Income is lumpy and tax planning is not
Three good months and two bad ones is normal. Timing dividends and pension contributions across tax years is where most of the saving sits, and it has to be done before 5 April.
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You are carrying more cash in the company than you need
Retained profit sitting in a business account earns nothing and may complicate reliefs later. There are better places for it.
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Nobody has looked at your expenses properly
Home office, equipment, training, travel between sites, professional subscriptions. Contractors consistently under-claim.
What we do for you
- Company accounts Statutory accounts, the Corporation Tax return and Companies House filing. from £599
- Self Assessment Your return prepared, checked for missed reliefs and filed early. from £149
- Corporation Tax Capital allowances and reliefs claimed properly, filed on time. Quoted
- Company formation Incorporation, share structure and HMRC registrations within 24 hours. from £99
- Making Tax Digital Software, quarterly updates and your final declaration, all handled. from £35/mo
Guides for contractors & freelancers
Contractors & freelancers: common questions
Do contractors need an accountant?
If you operate through a limited company, practically yes. You have statutory accounts, a Corporation Tax return, payroll and your own tax return to deal with. The fee is typically a fraction of the tax planned for.
What is IR35?
Rules that determine whether you are genuinely in business on your own account or are effectively an employee of your client for tax purposes. Being inside IR35 significantly increases the tax on the engagement.
Should I be a sole trader or use a limited company as a freelancer?
A company wins when you retain profit, need limited liability, or when the end client will only contract with one, which often decides it for you. On pure tax, drawing everything out, a sole trader is usually marginally ahead.