Contractors generally choose a contractor limited company because it offers them multiple benefits, such as tax efficiency and having control over your own administration and accounts. Nevertheless, as most contractors are not trained in accounting, most choose to employ the services of a contractor accountant to help them. Because there are penalties for the late filing of company accounts, and also the financial implications which may come about for the miscalculation of taxes and NI to be paid, using a contractor accountant is safer and more cost-effective.
Having a contractor limited company is not just about the tax benefits, however. Other major benefits are that agencies, councils and sometimes individuals will simply not hire a sole trader because of the employment rights risk. Contracting through a limited company therefore gives you a chance of getting a greater amount of work. When you are part of a limited company you are also only responsible for the amount that you have put into it, and not the company?s debts, should it have any. This helps contractors to separate the personal assets from their business assets and protect themselves should anything go wrong.
Although the services of an accountant are not essential for a contractor, most contractors are unable to understand accounting software in order to complete it accurately. EasyLimited provide monthly accounting services which offer a happy medium ? their software was built and designed by contractors and is extremely simple to use. They have a range of packages which help with every aspect of accounts management, filing and tax returns. They also prevent late filing penalties by taking responsibility for your filing. All you have to do is make any tax payments that are due, in which case they will contact you with simple instructions of what to do and how and when to do it.
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