Contractor Accounting

Oxon Accountancy have been offering accountancy for contractors and freelancers for many years. We specialise in technology-driven services that take the hassle out of accounting and we offer your very own dedicated accountant with unlimited support.

Our specialist contractor accountants have decades of experience amongst them and don’t want accounting to be a laborious process brimming with jargon that is difficult to understand, extortionate rates and a personal accountant that’s never there when you need them.

At Oxon Accountancy, we can help you no matter your accounting requirements. Are you incorporating your very own Limited Company? Or are you trying to maximise your tax efficiency? Perhaps you want IR35 advice?

Because we understand that each case is unique, we provide flexible accounting solutions that we’re always improving. Our tailored services include 24/7 access to our online bookkeeping tool, preparation and submission of quarterly VAT returns, preparation of self-assessment tax return, assistance with HMRC records checks and dividend and board minute documentation.

CONTRACTORS AND SUBCONTRACTORS

A contractor is a business or other concern that pays subcontractors for construction work. Private householders are not classiied as contractors in the eyes of HMRC and therefore the scheme does not apply to them if they carry out work on their own home, such as having the kitchen extended. A subcontractor is a business that carries out construction work for a contractor: for instance, electricians or plumbers who supply their services as part of a bigger construction project. It is possible for a business to be treated as both a contractor and subcontractor, and different rules apply to both statuses. These rules need to be followed very closely as getting this wrong could land you in trouble further down the line. Speak to us for further clarity.

HOW THE SCHEME WORKS

All contractors and subcontractors should register with HMRC for the construction industry scheme. Subcontractors will be subject to a higher-rate deduction if they have not registered. Contractors deduct money from a subcontractor’s payments and pass it to HMRC. These deductions count as advance payments towards income tax and national insurance, similar to PAYE.
A limited company will have deductions taken by the contractor from the income due to the company. This deduction can then be offset against other company tax liabilities such as PAYE, VAT, corporation tax or can be refunded to the company after the end of the tax year. Sole traders and partnerships will also have deductions made from the income they receive.
They are then required to report their gross income on their self-assessment tax returns, with contractor deductions also reported on the tax return and subsequently deducted from any income tax liability which is calculated as being due. Contractors need to verify a subcontractor’s status with HMRC before payment is made to establish whether they are registered and the correct amount of tax to withhold. Tax can be deducted at source at 0%, 20% or 30%. Contractors must report all of the payments they have made under the scheme to the Revenue, or report they have made no payments in the tax month, by the 19th of each month. Penalties apply if the monthly return deadline is missed more..

Oxon Accountancy offer one straightforward accountancy package from just £60 + VAT per month.

Phone: 01235 250011
Fax: 01235 250022
28 The Quadrant, The Science Park Barton Lane, Abingdon, OX14 3YS

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.