What can I save?
For many people who freelance, the most frustrating and challenging aspect of working as a contractor is actually finding a contract in the first place. As in many aspects of life, price does not always relate to the quality of services you will receive. The way forward is to stay positive, keep focused and never lose your motivation. It’s much better to actively pursue and know the status of any given situation, as opposed to sitting around and worrying. Finding contractor expenses is a task that can be done by professional contractor accountants.
The contractor completes his, or her work, completes a timesheet and submits this along with their expense claims to their agency or umbrella company. Usually the fees cost contains £65 + vat per month, this works out at £780.00 per year + vat. Contractor accountants are employed especially for the task to manage accounts, profits, losses and many other things. Every one while setting up a company has a dream of taking their business to the next level and dream of being truly successful. To achieve this, the most important thing is to have a proper plan of action. This makes any tasks easy and keeps you focused! It also helps in tracking the progress and can help evaluate ones own performance based on certain check points in the form of goals or milestone. There are number of contractor calculator services available, who take such type of work and do it efficiently for their clients. All umbrella companies use the same PAYE calculations to ascertain how much tax should be paid. Many contractors start out by thinking an accountant is an additional unnecessary expense that they don’t need. If the contract is violating IR35, then the only expenses claimable before calculation of the deemed salary is:-
- A small percentage of net sales, say 5%
- Any accommodation and travel expenses
- Contributions to pensions
- Some subscriptions to professional bodies
However, it must record all business expenses so that it helps us to see the true cost of running the company. Some of the more common expenses are:-
- Cost of company formation
- Your accountancy fees
- Any business travel and accommodation
- Postage expenses related to your business
- Any stationery used for the business
- Telephone calls made on behalf of the business
- Telephone calls and the costs of a mobile phone
- Salaries for yourself and staff
Apart from those shown above, others may also claim: A mileage allowance & general travel expenses, accommodation and hotel expenses and all Professional Subscriptions.
These days food and meals (subsistence) is rarely allowed to be claimed. This is because they feel you would eat whether you are working or not. Expenses, and what you can claim, determine the growth of any business and definitely have a bearing on the smooth operation or any business..
Read more about Contractor Pay Calculator.