# SG Accounting > Specialist contractor and small business accountants, established 1995. Limited Company, Sole Trader and Umbrella accounting with IR35 advice, FreeAgent software and unlimited tax support included. No set-up or switching fees. > Generated by All in One SEO Pro v5.0.3, this is an llms-full.txt file, used by LLMs to index the site. ## Posts ### [Why Clients Default to Inside IR35 (and What This Means for Contractors)](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** If you’ve ever had a contract assessed as [inside IR35](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/) and felt frustrated or powerless, you’re not alone. Many contractors find that roles which *should* fall outside IR35 are classified inside – sometimes because the client simply doesn’t want to take the risk. Since the 2021 reforms, the responsibility for deciding [IR35 status](https://sg-accounting.co.uk/blog/what-is-ir35/) (and the potential tax liability if that decision is wrong) moved from the contractor to the end client. That single change reshaped the market. Clients became cautious, sometimes overly so. Understanding why this happens helps you plan ahead, respond constructively, and recognise when an assessment might not have been carried out correctly. ## ## Key Takeaways - Since 2021, clients – not contractors – carry the IR35 tax liability - Each engagement must be assessed individually, blanket decisions are non-compliant - Fear of penalties and administrative burden drives many clients to play safe - Contractors can respond constructively by demonstrating independence and professionalism - The market is slowly rebalancing as clients gain confidence in compliant, case-by-case assessments Sorry, your browser doesn't support embedded videos. ## Contents ## The Risk Shift – Why 2021 Changed Everything ### What Changed in the Legislation? Before 2021, contractors decided their own IR35 status and carried the financial risk if HMRC later disagreed. Under the off-payroll working rules introduced for medium and large organisations, that responsibility moved to the end client. If HMRC challenges an outside IR35 determination and wins, the client becomes liable for back-dated tax, employer National Insurance, interest and penalties. ### Clients Must Make Individual Assessments – It’s a Legal Requirement The legislation requires every engagement to be assessed on its own merits. Clients must issue a written Status Determination Statement (SDS) explaining the outcome and their reasoning. Applying a single “inside IR35” decision to every contractor – known as a blanket determination – is not compliant with HMRC’s guidance. Clients can use a consistent process, but they must still review each role individually, taking into account working practices, control, substitution and other relevant factors. ### Why That Makes Clients Cautious The potential consequences of getting a status call wrong are serious: - Large, unexpected tax bills - Reputational damage if HMRC investigates - Costly internal audits and adviser fees It’s easier (and seemingly safer) for some organisations to default everyone to inside IR35 rather than invest time and expertise in proper assessments. ## The Financial and Compliance Pressures on Clients ### Penalties and Reputational Risk If HMRC decides a role was wrongly treated as outside IR35, the client can be pursued for multiple years of unpaid tax, employer NI, and interest. In high-profile cases, HMRC has publicly named organisations that failed to comply, so reputational damage is also a major concern. ### Administrative Complexity Each assessment requires a review of contracts, working arrangements and reporting lines. For companies with dozens or hundreds of contractors, this creates a heavy administrative burden. Many lack in-house IR35 specialists and rely on cautious HR or legal teams who prefer to play safe. ## Blanket Decisions and Risk Aversion in Practice ### What Is a Blanket Determination? A blanket determination is when a client treats all contractor roles as inside IR35 without reviewing individual circumstances. This approach is non-compliant because HMRC expects clients to make individual, reasoned assessments supported by evidence and to document those decisions in the SDS. ### Why Some Clients Do It Anyway - Simplicity – one policy is quicker to implement - Fear – perceived as lower risk than making an outside call and being wrong - Lack of clarity – some organisations misunderstand their legal obligations ### Why It Harms Both Sides Blanket decisions create unnecessary friction. - Contractors lose the ability to work independently through their Limited Companies - Clients reduce their own flexibility and talent pool, as skilled contractors often move to competitors offering fairer, case-by-case assessments - HMRC guidance is clear: consistency is fine, but copy-and-paste decisions are not ## How Contractors can Respond Constructively ### Stay Professional and Factual When you receive an inside IR35 SDS that doesn’t feel accurate, avoid frustration or blame. The client’s motivation is usually risk management, not mistrust of you personally. Keep communication collaborative and polite – your professionalism strengthens your credibility. ### Demonstrate Independence Early Before a determination is finalised, [share evidence that you operate as a genuine business](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/): - Defined scope of work or statement of deliverables - Proof of business insurance - Examples of previous projects delivered autonomously - Confirmation that you set your own schedule or supply your own equipment These signals can reassure cautious clients that classifying your role as outside IR35 is both fair and defensible. ### Remind Clients of Their Obligations It’s perfectly reasonable to note, respectfully, that HMRC requires individual assessments. Sometimes clients default inside simply because they’re unaware that blanket decisions breach compliance. A calm, informed reminder may encourage them to review your engagement properly. ### Use the Disagreement Process if Needed If you believe an SDS is wrong, you can formally challenge it. - Write to the client referencing the SDS, explaining why you think it’s inaccurate - Provide factual evidence (contract clauses, scope documents, working-practice examples) - The client must respond in writing within 45 days, either confirming or amending the decision Even if the result doesn’t change, the process demonstrates that you understand the rules and value compliance. ## What It Means for Rate Negotiation Inside IR35 contracts often come with higher client costs – employer NI contributions, payroll administration, and the perceived risk premium At the same time, contractors face lower take-home pay Understanding both sides lets you negotiate from a position of mutual awareness: - Clients factor in risk, contractors factor in tax impact - A fair compromise rate helps maintain value for both parties ## The Long-Term Trend Towards Better Balance The initial wave of over-cautious behaviour after the 2021 reforms is slowly settling. Many organisations now recognise that blanket inside IR35 policies are unsustainable and non-compliant. To protect themselves properly, they’re investing in: - Independent IR35 audits and role-specific reviews - Specialist software or consultancy assessments - Training for hiring managers on applying tests consistently As confidence and understanding grow, more clients are returning to fair, role-by-role assessments, creating a healthier market for genuine contractors. ## FAQs ### [Why are clients so risk-averse about IR35?](#adce1735b49e8dfd0) The penalties for incorrect IR35 decisions can be severe, including backdated tax, employer National Insurance, and interest charges. For some, classifying everyone inside IR35 (a blanket decision) feels like the safer option, even though it limits flexibility and talent access. ### [Are blanket inside IR35 decisions legal?](#d3d0f0bd7757d4f21) No. Blanket decisions are not compliant with HMRC’s off-payroll working rules. While clients can apply a consistent process across contractors, each engagement must still be individually assessed based on control, substitution, and mutuality of obligation. ### [Can contractors challenge an inside IR35 determination?](#cd1dd2c858bd785c8) Yes. Contractors have the legal right to dispute an IR35 decision through the formal SDS disagreement process. You can write to the client with evidence that your engagement reflects genuine independence and the client must respond in writing within 45 days. ### [How can IR35 status affect rate negotiations?](#e5e1a2c1070c32e29) Inside IR35 contracts usually result in lower take-home pay for contractors, since tax and National Insurance are deducted at source. Contractors tend to negotiate higher day rates to reflect the added tax burden and maintain fair net income. ### [What can contractors do to improve their chances of being assessed outside IR35?](#2e7391a2fb3984d01) Present yourself as a genuine business before the contract starts. Provide documentation such as proof of business insurance, a defined scope of work, examples of past projects, and evidence that you supply your equipment. These details help reassure clients that an outside IR35 classification is fair and defensible. ## Final Thoughts IR35 has made contracting more complex for everyone, and it’s understandable that clients sometimes err on the side of caution. But when both sides understand their responsibilities – and when assessments are done properly – fair outcomes are possible. If you’ve received an inside IR35 decision that feels inaccurate or want advice on how to approach the discussion professionally, we can help. At SG Accounting, we support contractors and clients alike – from reviewing SDSs and clarifying compliance to helping you stay organised across both Limited Company and umbrella arrangements. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by Drazen Zigic – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [How to Protect Your IR35 Position Before a Contract Starts](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** Once a contract has begun, most of the factors that decide [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/) status are already in place. That’s why the best time to protect your position is before you sign. The end client carries the tax liability if an assessment is wrong, but you still have a stake in the outcome. If a contract is classed as [inside IR35 when it could fairly be outside](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/), your take-home pay and flexibility are affected. You can’t control the final decision, but you can influence how the role is assessed and present evidence that you’re operating as a genuine business. Taking a few simple steps early can help you avoid being misclassified and give clients confidence that their assessment is correct. ## ## Key Takeaways - The tax liability sits with the client, but the financial impact sits with you - The best time to influence IR35 status is before signing - Shape contracts around deliverables, not attendance - Confirm who issues the SDS and how assessments are made - Keep evidence of independence from day one - If you disagree with a determination, use the formal SDS dispute process – clients must respond within 45 days - Use a specialist accountant to manage mixed inside/outside income and stay organised Sorry, your browser doesn't support embedded videos. ## Contents ## Understand Your Starting Point IR35 focuses on how the engagement looks in practice. The three key tests are: - **Control** – who decides how, where and when you work - **Substitution** – can someone else deliver the service on your behalf - **Mutuality of Obligation (MOO)** – is there an ongoing expectation of work You’re not trying to “game” the system. You’re making sure your engagement reflects genuine independence, not disguised employment. ### Confirm Who Decides Status Ask early who will issue the Status Determination Statement (SDS) – the end client or the agency. Clarify their assessment process, timelines and what evidence they’ll use. Knowing this upfront helps you prepare and reduces surprises later. ## Shape the Role Before the Contract Is Signed ### Discuss Scope and Deliverables Frame the work around projects or outcomes. Replacing phrases such as “40 hours per week” with “delivery of X project by Y date” makes it clear you’re being paid for results, not attendance. Whenever possible, request a Statement of Work rather than a job description. ### Negotiate Autonomy and Methods Ask to define how the work is carried out. A true contractor chooses tools, methods and schedule – provided the result meets agreed deliverables. Avoid wording that locks you into fixed hours, required meetings, daily supervision or client approval for every decision. ### Clarify Substitution and Resources If substitution is practical, ensure the right is written into the contract and the client accepts it in principle. Also confirm whether you’ll use your own equipment or systems. Using your own supplies is another indication that you are genuinely independent. ## Review the Contract Carefully ### Language Matters Small wording changes can alter perception. Check for terms such as *employee*, *manager*, or *reports to*, which imply employment. Instead, use business-to-business terminology like *contractor*, *consultant*, or *supplier*. ### Consider a Professional Review A specialist contract reviewer can highlight risk clauses and suggest neutral alternatives. At SG Accounting, we can refer you to one of our trusted insurance partners for pre-contract checks to ensure terms align with your working reality. ## Document Independence Before You Start ### Keep Simple Records Save emails confirming project deliverables, invoices and any agreed scope changes. ### Show Business Credentials - Maintain professional indemnity and public liability insurance - Keep a live business website or professional profile that markets your services - Register for [VAT](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/), where appropriate, to signal that you operate as a real trading business Each element reinforces that you’re running an independent company and not just filling a temporary staff post. ## Work With Your Accountant and Umbrella Provider Handling company accounts, VAT, PAYE income and mixed IR35 statuses in the same tax year can quickly become complex. That’s why many contractors choose to use a [specialist accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) who understands the contracting landscape. An accountant can: - Keep your Limited Company compliant, even when you take inside IR35 roles - Track which income is company revenue, and which is PAYE - Plan your tax efficiently across the year If you already have both accounting and umbrella needs, using the same provider (as we offer at SG Accounting) makes life simpler. It means one point of contact, consistent records and joined-up support no matter how your roles are classified. ## Recognise Red Flags Before Signing Some warning signs suggest a role may have already been marked inside IR35 without proper assessment: - The client refuses to issue an SDS or says, “we treat everyone as inside” - The contract describes fixed hours, supervision or approval processes - You’re offered staff perks such as holiday pay, bonuses or company equipment - You’re asked to start work before any assessment or written agreement is complete - Job titles use internal labels like “Contract Manager” or “Temporary Employee” Politely highlighting these issues can encourage a fair, individual review – something HMRC requires of all clients. ## Keep Communication Constructive ### Ask Questions [Clients are often cautious](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) because they carry the compliance and tax risk. When you ask questions about deliverables, autonomy or equipment, frame them as helping the client stay compliant. ### Provide Reassurance Mention that HMRC requires clients to assess each engagement individually and that clear documentation protects everyone. Showing that you understand their obligations builds trust and positions you as a low-risk professional partner. ## If You Believe a Role Has Been Misclassified Sometimes you’ll discover the IR35 status has already been decided before you engage with the agency or client. If you believe an inside IR35 determination is wrong, you can raise a formal disagreement under the off-payroll working rules. Here’s how: 1. **Request the SDS if you haven’t received it** – you’re legally entitled to a copy 2. **Ask for reasoning** – understanding why the client reached that view helps you respond factually 3. **Prepare your challenge** – reference evidence such as autonomy, deliverables, substitution rights or similar contracts assessed outside IR35 4. **Submit your disagreement in writing** – keep it professional, concise and unemotional 5. **Wait for a response** – the client must reply within 45 days, either confirming or changing their decision Even if the outcome doesn’t change, you’ve ensured the client meets their obligation to carry out individual, reasoned assessments rather than blanket decisions. ## Plan for the Long Term Even if one engagement ends up inside IR35 and you decide to use an umbrella company instead of your limited company, keep your company ready for outside opportunities Maintain good records, stay up to date on legislation, and continue presenting yourself as a professional business. Being prepared lets you move smoothly between different types of contracts as opportunities arise. ## FAQs ### [When should I start thinking about my IR35 status?](#62275302cdb264812) The best time to consider IR35 is before a contract is signed. Once work begins, most of the key factors such as control, substitution, and mutuality of obligation are already fixed. Early discussions about deliverables and working practices can help ensure the role is correctly assessed from the start. ### [What steps can I take to protect my IR35 position before starting a contract?](#b846ff6e9f0d4b27c) You can protect your IR35 position by shaping the contract around project deliverables rather than hours worked, ensuring a clear right of substitution, using your own equipment, and keeping records that show you operate independently. Getting a professional contract review can also highlight wording that might raise IR35 risks. ### [What are the warning signs that a role might fall inside IR35?](#7f8d458dbcb043fee) Common red flags include fixed working hours, close supervision, use of company equipment, or a client that applies a blanket inside IR35 policy. If you see these signs, discuss them early and request a proper, individual assessment before signing. ### [What should I do if I disagree with my IR35 assessment?](#538ec6e254dd29deb) If you believe your contract has been wrongly classed as inside IR35, you can raise a formal disagreement with the client. Request a copy of the SDS, ask for the reasoning behind the decision, and respond with evidence that supports your independence. The client must reply within 45 days with their final decision. ### [Can I still run my limited company if a contract is inside IR35?](#c2e56fbbad8d13564) Yes. You can continue trading through your limited company and take on both inside and outside IR35 contracts. Your accountant can help you manage mixed income streams, keeping PAYE income separate from company revenue and ensuring you remain compliant throughout the year. ### [How can a specialist accountant help with IR35?](#7d2c49aff17cb2c25) A contractor accountant can advise on how to get your contract reviewed, and help manage your finances if you work on both inside and outside IR35 contracts. They can also assist with PAYE, VAT, and tax planning to keep your limited company compliant and efficient. ## Final Thoughts Protecting your IR35 position starts long before the first invoice. By defining scope, maintaining independence and understanding the determination process, you can minimise the risk of being placed inside IR35 unnecessarily. At SG Accounting, we help contractors to navigate both inside and outside IR35 roles when it comes to their accounts. If you’d like a contract check or guidance on how to approach a client’s IR35 decision, get in touch with our team today. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by pressfoto – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [SG Accounting wins Best Contractor Accountancy at the Contracting Awards 2026](https://sg-accounting.co.uk/blog/sg-accounting-wins-best-contractor-accountancy-at-the-contracting-awards-2026/) **Published:** October 1, 2026 **Author:** Jen Winslow **Content:** ## We’re proud to be named Best Contractor Accountancy 2026 We’re delighted to announce that SG Accounting has been named Best Contractor Accountancy (1,000–3,000 Clients) at [The Contracting Awards 2026!](https://www.contractingawards.co.uk/winners-2026) This award recognises our commitment to delivering expert contractor accountancy, tax advice and limited company accounting services to contractors, consultants and business owners across the UK. ## We share this award with SG’s clients Since our formation, we’ve had the privilege of working alongside thousands of contractors, consultants and limited company owners, helping them navigate everything from tax returns and company accounts to business growth and long-term financial planning. The trust our clients place in us is something we never take for granted. Every business and challenge is different and unique, and every client deserves advice that’s tailored to their circumstances. It’s this personalised approach that has always been at the heart of what we do. That’s why this award feels so special. It reflects the relationships we’ve built and the success we’ve shared with our clients. Kerry Newman, Director at SG had the following to say about winning: *We’re absolutely thrilled to have been named Best Contractor Accountancy at The Contracting Awards 2026! It’s a fantastic achievement and a reflection of the dedication, expertise and exceptional service our SG Accounting team delivers every day.* *A huge thank you to everyone across the SG team. Your hard work, commitment and genuine care for our clients make achievements like this possible. We’re also incredibly grateful to our clients for their continued trust and support, and for being such an important part of our journey.* *Recognition like this means so much to us, and we’re incredibly proud to celebrate this win with the entire SG Accounting family.* ## Celebrating an incredible team Behind every client success story is a team of dedicated accounting professionals who genuinely care about making a difference. Whether it’s answering a question, solving a problem, providing reassurance, or helping a client seize a new opportunity, our team goes above and beyond every day. Their expertise, commitment and passion for helping business owners succeed is what makes SG Accounting what it is. Winning this award is a testament to the hard work they put in throughout the year, and we couldn’t be prouder of what they’ve achieved. ## Thank you To all of our clients, thank you for choosing SG Accounting. To our team, thank you for your hard work, professionalism and dedication. And to everyone who has supported us on our journey, thank you for helping us reach this incredible milestone. Being named Best Contractor Accountancy at the Contracting Awards 2026 is an achievement we’ll celebrate, but it’s also motivation to keep raising the bar. We’re excited for what comes next and look forward to continuing to support contractors and business owners across the UK for many years to come. **Here’s to the next chapter.** **Categories:** limited company, New to contracting, News --- ### [Allowable business expenses for Limited Company Directors: explained](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) **Published:** May 21, 2026 **Author:** Dean Lacey **Content:** Business expenses are costs a [limited company](https://sg-accounting.co.uk/blog/what-are-the-pros-and-cons-of-contracting-through-a-limited-company/) can claim back from its income in order to reduce the company’s taxable profit and therefore lower the amount of corporation tax due. These expenses are only allowable if they are wholly, exclusively and necessary for business purposes. For many directors, understanding what can and cannot be claimed is a minefield. Getting it wrong can result in penalties from HMRC, whilst shying away from claiming leaves potential savings on the table. In this guide, we’ll explore the types of expenses you can claim, how to tell if an expense is allowable or not, and answer the most common questions that we hear from business owners. ## Key takeaways - Only expenses that are wholly, exclusively, and necessarily for business purposes are allowable - Maintain proper records to prove to HMRC that your expenses are legitimate - Use a [business bank account](https://sg-accounting.co.uk/business-banking-solutions/) to separate your business expenses from personal ones - If you're ever unsure whether an expense is allowable, speak to your accountant ## Contents ## Travel expenses Travel is one of the most common business expenses for limited company directors, but not everything is allowable. ### Commuting A common misconception is that commuting to a regular workplace counts as an allowable expense. HMRC only allows travel expenses to temporary workplaces, those being locations that you do not expect to work at for more than two years. It’s also important to understand that HMRC may treat a workplace as permanent if you spend 40% or more of your working time there and expect that arrangement to continue for more than 24 months. If your travel expenses meet that criteria, you can typically claim for: - Mileage in your personal vehicle (55p per mile for the first 10,000 miles per tax year, 25p thereafter) - Public transport fares (train, bus, tube, taxi, air travel) - Parking, tolls and congestion charges ### Subsistence expenses When travelling for business, you can also claim the cost of: - Meals - Hotel stays or other reasonable accommodation - Incidental overnight expenses such as laundry costs or newspapers (up to £5 per night in the UK, or £10 outside of the UK and it must be receipted) Make sure you keep detailed records of your travels including mileage logs and receipts as HMRC will need proof that all these expenses are wholly for business purposes. ## Using your home and technology for your business ### Home expenses If you run your limited company from home, HMRC will allow you to claim a portion of your household running costs as a business expense. There are two main ways of going about this: - Flat rate allowance: HMRC allows you to claim £6 per week without needing to provide receipts - Detailed calculation: If you work from home extensively, you may be able to claim a higher amount. You can do this by calculating the portion of your household bills (such as heating and electricity) that is used for business purposes If you're unsure about which option is best for you, read our [blog on home ](https://sg-accounting.co.uk/guides/how-much-can-i-claim-for-using-my-home-as-an-office/)expenses or speak to your Client Director for bespoke advice. ### Internet and broadband - If your company pays for a dedicated business broadband line (in the company's name), the full cost is allowable ### Mobile phones - If you use a personal phone, you can only claim for the cost of business calls - If you are looking to buy a new mobile phone then it is worth considering getting the contract in your Company's name as the whole cost would be allowable - Companies can provide one mobile phone per employee, tax-free ## Professional fees ### Professional services Fees paid to accountants, solicitors and business advisors are allowable where the fees only relate to the company. Examples of allowable expenses include: - Accountancy fees - Bookkeeping - Tax advice - Contract reviews - Legal advice on your business activities It's important to note that certain legal advice such as for personal matters or for the purchase of fixed assets (e.g. property) are not considered allowable business expenses. ### Training and development For training costs to be allowable, they need to update or enhance a skill you already use in your trade. Training for completely new skills in an unrelated field can't be claimed. For example, a programmer learning a new coding language can claim that cost but retraining as a driving instructor would not be allowable. ## Entertainment, gifts and donations Expenses such as the entertainment of staff or clients, trivial benefits, gifts and charitable donations, all have different rules, depending on who they benefit. ### Trivial benefits You can provide small gifts or perks to your employees without triggering a tax charge per tax year – for example a bottle of wine or a bunch of flowers to celebrate a special occasion. The basic rules for what qualifies as a trivial benefit are as follows: - Each item cannot exceed £50 in value - Gifts must not be in cash (or cash vouchers) - For directors, the annual limit for all trivial benefits is £300 in total For more information, [read our trivial benefits](https://sg-accounting.co.uk/blog/trivial-benefits-for-limited-companies-tax-free-gifts-and-employee-rewards/) blog. ### Staff entertaining You can [claim the cost of annual staff events](https://sg-accounting.co.uk/blog/can-contractors-claim-client-entertaining-and-staff-entertainment-expenses/), such as a Christmas party or summer BBQ, up to £150 per person (including VAT) per accounting year. This also applies to the partners of employees. To be considered allowable, events: - The receipted cost must not exceed £150 per head, otherwise the entire amount becomes disallowable - Must be open to all staff, not just directors ### Client entertaining [Costs for entertaining clients](https://sg-accounting.co.uk/blog/can-contractors-claim-client-entertaining-and-staff-entertainment-expenses/) (meals, drinks, events) can be claimed through your company accounts, but unlike staff entertaining they are not tax-deductible. This means you can’t claim back Corporation Tax or VAT on these expenses. ### Charitable donations Donations to registered charities are generally allowable, provided they do not cause your company to make a loss. Contributions to political parties or non-registered charities are not allowable. ## Insurance, pensions and protection Covering risks and planning for the future is part of running your business successfully. While many insurance and pension costs are tax-deductible, a few have additional tax implications that you should be aware of. ### Business insurance The following types of insurance are all considered allowable business expenses and are very commonly used by limited companies: - Employer's Liability Insurance (which, by law, every limited company must have) - Public Liability Insurance - Professional Indemnity Insurance (which agencies often require) However, some insurances, such as paying for private medical/dental insurance through your company, will typically trigger a Benefit in Kind (BiK) charge, which will need to be reported on a P11D and may result in additional tax for the employee or director, and the company too. Read more about [business insurance here](https://sg-accounting.co.uk/business-insurance/). ### Relevant life cover This is a tax-efficient life insurance policy set up by the company that pays out a lump sum if the insured director or employee dies (or is diagnosed with a terminal illness). - Premiums are paid by the company - Payouts are free from Income Tax, Corporation Tax, and National Insurance ### Executive income protection This insurance pays a monthly benefit to the company if a director or key employee can't work due to illness or injury. - Provides financial stability for the business - Usually treated as an allowable business expense ## Pension contributions Pension contributions made by the company on behalf of directors and employees are allowable business expenses. However, there are annual limits to this, so we recommend speaking to a financial advisor if you are considering pension contributions. For a more detailed breakdown, read our blog on [pension contributions here](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/). ## Everyday business expenses There are many everyday business costs that are allowable expenses. These often fall into marketing, technology, and general office spend – all of which can be valuable in reducing your taxable profit. ### Marketing and advertising Allowable costs include: - Business cards - Website design, hosting and maintenance - Social media ads - Promotional materials - Online or print advertising Sponsorship can also be claimed, but only if it provides a clear business benefit (e.g. sponsoring a local sports team in exchange for having your company logo on the kit). ### Computer equipment and software - The cost of computers, laptops, tablets, and related equipment is allowable, as long as personal use is only incidental. - Software licences and subscriptions that are necessary for your work can also be claimed. [VAT registered businesses](http://VAT%20registered%20businesses%20can%20claim%20back%20the%20VAT%20on%20these%20costs%20%5BLink%20from%20Allowable%20Business%20Expenses%20(Pillar)%5D) can claim back the VAT on these costs but please note that if you're using the Flat Rate VAT scheme for VAT, you will only be able reclaim the VAT element if the purchase is £2,000 ore more (this applies to computer equipment and other capital assets). Get in touch with your Client Director if you're unsure whether this applies to you. ### Other common allowable expenses - Subcontractor or freelancer costs - Trade-related books, journals, or magazines - Postage, stationery, and printing costs - Certain professional subscriptions and memberships Always ensure the expense has a clear business purpose. If there's significant personal use or no direct link to company activity, HMRC is likely to disallow the claim. If you need more help determining whether an expense is allowable or not, speak with your SG Client Director. ## Costs that don’t count as allowable business expenses Not every cost you pay through your company qualifies as an allowable business expense. HMRC has strict rules, and claiming the wrong items can lead to rejected claims, additional tax, or penalties. Here are some common examples of disallowable expenses: ### Personal lifestyle costs - Personal holidays and personal subscriptions (e.g. Netflix, Spotify) are never allowable ### Clothing - Everyday clothing, including suits, shoes, or general office wear, cannot be claimed - However, specialist clothing such as uniforms, protective gear, or costumes required for your role are allowable ### Fines and penalties - Parking fines, speeding tickets, and other penalties cannot be claimed, even if they were incurred while travelling for work. HMRC views these as preventable and your own personal responsibility, not the company's ### Home improvements - Renovating or upgrading your home (even if you work from it) is not allowable unless you can prove the costs are exclusively for business and provide no personal benefit When in doubt, ask yourself: 'Would I still have this cost if I wasn't running my business?' If the answer is yes, it's likely disallowable. ## How expenses affect your tax bill One of the biggest benefits of correctly claiming allowable expenses is the impact on your tax bill. ### Corporation tax savings Every genuine business cost reduces your company's taxable profit, which in turn lowers the amount of Corporation Tax you owe. ### Reimbursed expenses If you personally cover business costs (like travel or subsistence), you can reimburse yourself tax-free, provided the expense is valid and properly recorded. Reimbursed expenses are not treated as extra salary or dividends, so no additional Income Tax or National Insurance is due. ### VAT reclaim If your company is VAT-registered, you can often reclaim VAT on business purchases (assuming you have a valid VAT invoice). ## Record-keeping best practices Claiming business expenses is only half the story – without proper documentation, HMRC can reject your claims, even if the expense itself was allowable. To ensure you're keeping records correctly, follow these best practices: - Use [accounting software](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) to log expenses consistently - Store backups of receipts digitally - Track mileage with a log or app (include dates, destinations, and purpose) - Keep records for at least six years in case HMRC requests them - Set reminders for the deadlines for VAT returns, Corporation Tax, and annual accounts ## Common pitfalls to avoid - Mixing personal and business finances by using the same bank account - Claiming personal costs (holidays, clothes, streaming services) as business expenses - Forgetting to claim legitimate deductions such as home office expenses or pension contributions - Poor record-keeping – losing receipts or failing to log expenses - Misclassifying training or entertainment costs - Not setting aside enough for tax obligations, leading to cash flow problems Getting into a good routine of logging expenses weekly or monthly prevents mistakes, missed claims, and last-minute stress at year-end. ## FAQs ### [What counts as an allowable business expense for a limited company director? ](#2373e8628f1a83caf) Allowable business expenses are costs that are wholly, exclusively, and necessarily incurred for business purposes. Examples include travel to temporary workplaces, professional fees, business insurance, and office supplies. ### [How do allowable expenses affect my tax bill? ](#ac8bf53a30c6c7626) Claiming legitimate expenses reduces your company's taxable profit, which lowers your Corporation Tax. ### [What should I do if I’m unsure whether an expense is allowable? ](#2b7b3145f5fa5a47d) If you're uncertain, ask your accountant. They can confirm whether an expense qualifies under HMRC rules and ensure it's properly recorded in your company accounts. ### [What happens if I accidentally claim a disallowable expense? ](#b93f9be81bf8f4f75) If HMRC identifies disallowable claims they can reject the expense, adjust your tax return, and potentially issue penalties or interest. Always keep accurate records and speak with your accountant before submitting. ### [Are pension contributions made by the company tax deductible? ](#10b4b80008789672e) Yes. Employer pension contributions made directly by your limited company are an allowable business expense. This can be a tax-efficient way to extract profits, though limits apply, so it's recommended to seek financial advice. ### [Can I claim charitable donations through my limited company? ](#ed83b96d18f2dab9b) Yes. Donations to registered charities are allowable if they don't cause your company to make a loss. Political or non-registered donations, however, are not tax-deductible. ### [Can I claim expenses if I work from home as a director? ](#254930c71c6973bfa) Yes. HMRC allows you to claim a portion of your household running costs if you use your home for business purposes. You can either claim the flat rate allowance (£6 per week) or calculate a proportion of actual costs such as heating and electricity. ### [Can I claim travel costs as a business expense? ](#0e5bc64733d47b200) Yes, but only for business-related travel to temporary workplaces. You can claim mileage, public transport, parking, and subsistence (meals and accommodation) if the trip is wholly for business purposes. Regular commuting between home and your usual place of work is not allowable, if you expect to be there for 2 years or more. ### [Are client entertainment costs tax deductible? ](#d5ae562328fb3d870) No. While you can record client entertainment such as meals or event tickets as a business expense in your company accounts, HMRC does not allow it as a tax-deductible cost. You cannot claim back VAT or reduce Corporation Tax on these expenses. ### [Can I claim mobile phone or broadband costs through my company? ](#82dca605f58ca92f8) Yes, if the contract is in your company's name, the full cost can usually be claimed. For personal contracts, you can only claim the portion used for business. Keep detailed records or itemised bills to support your claim. ## Final thoughts [Running a limited company](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) can be complex, but you don't have to figure it out alone. Working with a [specialist accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) ensures you utilise every allowable deduction while staying fully compliant. Speak to your SG Client Director today for tailored advice on business expenses and tax planning, and if you're not yet an SG client, [get in touch to find out more](https://sg-accounting.co.uk/contact/). Dean Lacey Client Director Dean joined SG back in December 2023, and is FCCA qualified. Specialising in contractor accounting since 2010, he particularly enjoys building client confidence in managing their own tax affairs, and building up their businesses. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/dean-lacey/) [LinkedIn](https://www.linkedin.com/in/dean-lacey-69665065) **Categories:** Expenses, limited company, New to contracting, News, Running your business, Tax, VAT **Tags:** Dean Lacey --- ### [How Do I Get Started as a Contractor Through a Limited Company?](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** When you [get started as a contractor](https://sg-accounting.co.uk/limited-company-accountants-for-contractors/#starting-out), one of the first decisions you’ll need to make is how to structure your business. Some contractors are best suited to working through an umbrella company or as a sole trader, while others choose to run their business through a limited company. The right option depends entirely on your circumstances, your contracts, and the level of responsibility you’re comfortable taking on. Consider [the pros and cons of contracting through a limited company](https://sg-accounting.co.uk/blog/what-are-the-pros-and-cons-of-contracting-through-a-limited-company/), to help you make an informed decision. If you do decide that setting up a limited company is the right path for you, there are a few key steps you’ll need to follow to get up and running smoothly. In this guide, we’ll walk through what’s involved in forming your company, registering for taxes, understanding your role as a director, and how the right accountant can support you from day one. Key Takeaways - Using a limited company as a contractor offers potential tax benefits, but comes with more responsibilities - Decide on a company name, share structure and registered office address before incorporating - Get organised from day one with accounting software and good record keeping habits to stay compliant - Appoint a specialist accountant to help guide you through the process and deal with HMRC on your behalf Sorry, your browser doesn't support embedded videos. ## Contents ## Decide on Your Company Name and Structure The first step in setting up your limited company is choosing a business name. Choose carefully, as the name you pick will appear on invoices, contracts and other official documents and accounts. Your business name will also have to abide by Companies House’s rules: - It **must** include the word ‘limited’ or ‘ltd’ - It **can’t** be the same as, or too similar to, an existing company’s name. This can be checked on the [Companies House website](https://find-and-update.company-information.service.gov.uk/company-name-availability) - It **can’t** be offensive - It **can’t** include [‘sensitive’ words](https://www.gov.uk/government/publications/incorporation-and-names/annex-a-sensitive-words-and-expressions-or-words-that-could-imply-a-connection-with-government) without prior approval If you want your clients to know you by a name other than your registered business name, you can opt to use a trading name. This can be completely different from your registered name, but it must comply with the following: - It **can’t** include the words ‘limited’, ‘ltd’, ‘limited liability partnership’, ‘llp’, ‘public limited company’, or ‘plc’ - It **can’t** be the same as an existing [trademark](https://www.gov.uk/search-for-trademark) - It **can’t** be offensive - It **can’t** include [‘sensitive’ words](https://www.gov.uk/government/publications/incorporation-and-names/annex-a-sensitive-words-and-expressions-or-words-that-could-imply-a-connection-with-government) without prior approval On official company documents such as invoices or contracts, both your trading name and registered name must be included. For example: ‘***E.G. Business Consulting***’ is a trading name of ‘***Example Business Consulting Services Limited***’ Once you’ve decided on your company name, you’ll need to think about how you want to set up your share structure. Usually, contractors will appoint themselves as the sole director and shareholder of the company. However, there are also other options such as issuing shares to your spouse as well as yourself. HMRC have strict rules when it comes to appointing directors and issuing shares, so we recommend speaking with a specialist accountant before taking action. ## ## Set Up Your Registered Office Before incorporating your company, you’ll need to decide on your registered office address. This will be the address that will be displayed on Companies House’s public records and where HMRC will send official mail to. Understandably, many contractors prefer not to use their home address as their registered office for privacy reasons. Instead, you can use a formation agent’s address, virtual office service, or your accountant’s address (if they offer that service) as your registered office. At SG, we include the use of our address as your registered office in our [limited company package](https://sg-accounting.co.uk/prices/). Whichever option you choose, the address must be a physical location in the UK. Keep in mind that all legal correspondence and important notices from HMRC will be sent to this address, so make sure this location is checked regularly. ### ### Service Addresses All directors need to have an address associated with them when they are appointed, called a service address. This will be used to send correspondence to them as individuals. Like with the registered office, you can use either a home address or one of the alternatives for more privacy. Directors often use the business’ registered office address as their service address to keep things simple. ## Register Your Company with Companies House The next step is to officially register (incorporate) your limited company with Companies House. There are several ways to do this: - **Directly with Companies House** – this costs £100 and can be done online - **Through a company formation agent** – this is more expensive but often comes with other benefits such as a provided registered office address - **Via your accountant** – many specialist accountants can set up your company on your behalf. When incorporating, you also need to provide these documents: ### Memorandum of Association This is a legal statement signed by initial shareholders (referred to as subscribers in the document) agreeing to form the company. ### Articles of Association These are the rules about how your company is run. This includes everything from how the decision-making process will work, what directors can and can’t do, and how dividends will be distributed. HMRC has standard ‘models’ for these documents which are ready to use, but you can also amend these if your needs differ. Once Companies House has approved everything, they will issue you a Certificate of Incorporation. This is confirmation that your company is now a legal entity and shows your company number and date of formation. Keep this certificate safe as you’ll need it regularly such as for opening a business bank account or registering for taxes. ## Register for Taxes With your company incorporated, next you need to register for the correct taxes with HMRC. Ensuring your business is compliant from the start will help you avoid any legal problems or surprise tax bills in the long run. Here’s what you’ll need to consider: ### Corporation Tax Every limited company must register for Corporation Tax. After you incorporate, HMRC will send a letter to your registered office address with your UTR (Unique Taxpayer Reference) and details on how to register. The deadline to register is three months after starting business activities. ### ### PAYE Setup for Director Salaries Even if you’re the only employee, you’ll need to set up a PAYE scheme to pay yourself a salary through your company. This allows your company to deduct Income Tax and National Insurance contributions and report them to HMRC. To do this you will need to [register as an employer](https://www.gov.uk/register-employer). As an employer, you also have the legal obligation to take part in automatic pension enrolment, although you can apply for an exemption if you are the company’s only employee. ### ### VAT Registration Unlike Corporation Tax, VAT is not a mandatory tax for all limited companies straight away. Only businesses with a turnover of over £90,000 in the last 12 months need to register. As soon as you know that you will go over that threshold, you have 30 days to [register for VAT](https://www.gov.uk/register-for-vat). There are several VAT schemes available, with one of the most common being the Flat Rate Scheme (FRS). Rather than calculating VAT for individual purchases as you would on the standard scheme, you instead pay a fixed percentage of your gross turnover to HMRC. This is much simpler and can work well for limited company contractors, but we recommend[ comparing the VAT schemes](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) and talking to a specialist accountant so you can make an informed decision. ### ### Self-Assessment Tax Return As a director, you’ll also need to file an annual Self-Assessment tax return in addition to your company’s Corporation Tax return. This covers dividends, and any other personal income you receive. ## Open a Business Bank Account Opening a [business bank account](https://sg-accounting.co.uk/blog/how-does-business-banking-work-for-small-businesses-and-contractors/) isn’t just best practice, it’s a legal requirement. Your newly formed limited company is a separate legal entity to you, meaning you need to keep your personal and business finances separate. This also has the benefit of making it much easier to track your business income and [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/). ### ### Choosing the Right Bank Most banks, including your high street banks, can [set up a business bank account](https://sg-accounting.co.uk/business-banking-solutions/) for you. However, these traditional banks often take a long time to do this. That’s why we researched a number of banks that specialise in small businesses. We have working relationships with [Tide ](https://www.tide.co/)& [Zempler](https://www.zemplerbank.com/landing/business/go/generic/?PC=BAS047), but there are many options out there. Here’s what you should be looking for in a business bank: - Low fees (some even have no monthly or annual fees at all) - Quality of online services / app - Speed of setup - Integration with accounting software If you need more information on business bank accounts, you can [read more here](https://sg-accounting.co.uk/business-banking-solutions/) or view our [FAQs page](https://sg-accounting.co.uk/blog/business-bank-account-faqs/). ## Choose Accounting Software & Processes As a limited company director, you’re [legally responsible](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) for accurate record-keeping. But with the right software and processes in place, you can set yourself up for success. ### ### Choosing an Accounting Software There are many options available – [FreeAgent](https://www.freeagent.com/), [Xero](https://www.xero.com/uk/), and [QuickBooks](https://quickbooks.intuit.com/uk/). Here’s what to look for when [picking the best software for you](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/): - Integration with your business bank account - Invoicing features - Expense tracking & digital receipt storage - Features for [Making Tax Digital](https://sg-accounting.co.uk/blog/making-tax-digital-were-ready-are-you/ "What is Making Tax Digital?") compliance Some banks and accountants include software as part of their package, so check before you sign up separately. [We include FreeAgent](https://sg-accounting.co.uk/freeagent/), at no extra cost in our limited company package. ### ### Good Accounting Habits Accounting software is only as useful as your accounting habits allow it to be. To stay organised, get into the routine of: - Recording expenses regularly rather than leaving it until year-end - Raising invoices promptly and chasing overdue payment - Reviewing your business bank account weekly or monthly to make sure your records are accurate - Putting aside money into a separate savings pot for Corporation Tax, VAT, and personal tax bills ### ### Appointing an Accountant Even with the best tools, most contractors will benefit from [appointing a specialist accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/). They can help you choose the right software, provide expert advice and can handle a lot of your accounting tasks for you, giving you more time to focus on running your limited company. ## Understand Your Responsibilities as a Director By becoming the director of your limited company, you also agree to the [legal responsibilities](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) that come with the role. Understanding these from the start will keep you compliant and help you avoid penalties. ### ### Filing Annual Accounts and Returns Every limited company must file: - **Annual accounts** – A record of your company’s financial activity (submitted to Companies House) - **Corporation Tax return** – Shows your profits and how much tax you owe (submitted to HMRC) - **Confirmation Statement** – A yearly update for confirming your company details are correct (submitted to Companies House) ### ### Record Keeping You’re legally required to keep accurate company records, including: - Details of directors, shareholders, and company decisions - Financial records such as invoices, receipts and company expenses - Copies of contracts with clients Most records must be kept for at least six years, so make sure you have a system in place to back these up securely online. If the personal details of any directors or people with significant control (PSCs) change, you are responsible for letting Companies House know. ### ### IR35 Compliance One of the main responsibilities for contractors running a limited company is managing [IR35 status](https://sg-accounting.co.uk/blog/what-is-ir35/). For contracts with medium/large companies or companies in the public sector, the client is responsible for determining your IR35 status. However, for contracts with [small companies](https://www.gov.uk/annual-accounts/microentities-small-and-dormant-companies#:~:text=Corporation%20Tax.-,Small%20companies,-Your%20company%20will), it’s you, the contractor, that is responsible for determining your IR35 status. To stay compliant, it’s always best to: - Carefully review every contract you take on - Keep evidence of working practices that show you operate independently - Seek professional IR35 assessments if you’re unsure ### ### Insurance You’re also responsible for making sure your business is protected by the necessary insurances. Many contracts will require you to have some or all of the following insurance cover before you can begin: - Professional indemnity insurance - Public liability insurance - Employers’ liability insurance ## Hire a Specialist Accountant While it’s technically possible to run a limited company on your own, having an accountant by your side will make things much easier. From incorporation through to day-to-day bookkeeping and annual filings, [the right accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) will save you a lot of time and give you peace of mind. ### ### Why Choose a Contractor Specialist? A specialist contractor accountant understands the nuances of working as a contractor, including: - IR35 legislation – how it affects your contracts and the tax implications - [Salary and dividend](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) structures - VAT registration and which scheme is best for you - What you can and can’t claim as a business expense ### ### What to Expect from a Good Accountant [An accountant that provides real value](https://sg-accounting.co.uk/blog/how-much-does-a-contractor-accountant-cost-and-what-value-should-i-expect/) should offer more than just filing your annual return. Look for one that provides: - Company formation support - Use of their office as a registered office address - Accounting software integration and - Unlimited expert advice ### ### Authorising your Accountant with HMRC Once you’ve chosen your accountant, you can then authorise them as your agent with HMRC. This allows your accountant to deal with HMRC on your behalf for tasks such as filing returns and handling queries. To set this up, your accountant will first request authorisation through HMRC’s online system. Then simply provide your accountant with the code that HMRC will send via post to your registered office address. ## ## FAQs ### [How do I set up a limited company as a contractor?](#b2cba389dd48be4ce) You can set up your limited company through Companies House online or via an accountant. You’ll need to choose a company name, appoint at least one director, decide on your share structure, and provide a registered office address. Many contractor accountants, including us here at SG Accounting, can handle the company formation process for you. ### [How much does it cost to set up a limited company in the UK?](#a38db6cd33a349cdf) If you register directly with Companies House, it costs £100 to incorporate online. Formation agents and accountants may charge more but often include added services such as registered office use, tax registration, and setup of accounting software. ### [Do I need a company to become a contractor?](#b4ccc7bcb281fed4c) Not always. You can also work as a sole trader or through an umbrella company, which offer their own advantages and disadvantages based on your circumstances. Speak to an accountant if you need help understanding your options. ### [Do I need to register my limited company with HMRC?](#7e5b1a51db3d99b34) Yes. Once your company is incorporated, HMRC will issue a Unique Taxpayer Reference (UTR). You must then register for Corporation Tax within three months of starting business activities. Depending on your situation, you may also need to register for PAYE and VAT. ### [Do limited company contractors need to register for VAT?](#f1dfcfc1990f7fc98) You only need to register for VAT if your company’s turnover exceeds £90,000 in a 12-month period. However, some contractors choose to register voluntarily to reclaim VAT on business expenses or take advantage of the Flat Rate Scheme. ### [Do I need to pay National Insurance as a limited company director?](#a14d47a80310978bb) Yes, but only on your salary. National Insurance contributions are paid through PAYE on the amount you take as salary, not on dividends. ### [Can an accountant help me be more tax efficient as a contractor?](#3804d540d951eaecd) Yes. An accountant can help advise you on how you can structure your pay efficiently, ensure all allowable business expenses are claimed, and help keep you compliant with HMRC rules. They can also advise on pension contributions and other tax-saving opportunities tailored to limited company contractors. ## Final Thoughts If you’re [brand new to contracting](https://sg-accounting.co.uk/limited-company-accountants-for-contractors/#starting-out), getting started can seem like an overwhelming task. Thankfully, you don’t have to do it alone. With help from a specialist accountant like SG, you can be certain that you’re being both compliant and tax efficient. If you are unsure about anything in this guide or want to get started on setting up your company, [get in touch](https://sg-accounting.co.uk/contact/) and our team of experts will be happy to help you. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) **Categories:** New to contracting **Tags:** Kerry Newman --- ### [What Accounting Software Should I Use as a Contractor?](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** If you’ve chosen to contract through a limited company, choosing the right accounting software is one of the early decisions you’ll make. Good software helps you stay compliant, track your finances in real time, automate repetitive admin, and collaborate smoothly with your accountant. With so many options available, it can be difficult to know which one to choose – especially when you’re [just getting started](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/). In this guide, we compare the main accounting software options used by UK contractors. ## ## Key Takeaways - Accounting software is essential for Limited Company contractors to manage invoicing, expenses, payroll, tax, and compliance. - Using accounting software allows your accountant direct access to the real-time financial data they need- saving time and reducing errors. - Most contractor-friendly software integrates with your business bank account, automatically syncing transactions and reducing manual bookkeeping. - The top accounting software options for contractors include FreeAgent, Xero, and QuickBooks Online. - [FreeAgent is widely considered the leading solution for contractors](https://sg-accounting.co.uk/freeagent/) due to its automation, ease of use, and contractor-focused features. SG Accounting provides FreeAgent as part of our [fully inclusive package](https://sg-accounting.co.uk/prices/). Sorry, your browser doesn't support embedded videos. ## Contents ## Why Contractors Need Dedicated Accounting Software Running a Limited Company means managing more financial responsibilities than a sole trader. The right software helps you: - Create and send invoices - Scan and categorise [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) - Sync your business bank account automatically, reducing manual data entry - Manage [VAT](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/), CIS, payroll and Corporation Tax submissions - Stay compliant with HMRC’s Making Tax Digital requirements - Collaborate with your accountant easily, as they can access the same real-time data you do - For contractors – who often work with multiple clients and fluctuating workloads – automation and up-to-date financial data are invaluable ## How Accounting Software Helps Contractors and Their Accountants One of the biggest advantages of using contractor-friendly accounting software is the way it streamlines collaboration with your accountant: - Real-time access to your financial data - Your accountant can log in at any time to see your transactions, payroll, dividends, VAT position, and year-end figures – without needing spreadsheets or emailed records. This means: - Faster responses to queries - More accurate advice - Fewer mistakes - No chasing for missing paperwork ## Automatic Bank Feeds Most modern platforms – FreeAgent, Xero and QuickBooks – connect directly to your business bank account. This ensures transactions are downloaded and categorised quickly, giving you a clear and accurate picture of your finances every day. For contractors, this means: - No manual entering of bank transactions - Far less bookkeeping time - Cleaner data for tax calculations ## The Main Accounting Software Options for Contractors Below, we compare the three most widely used options for Limited Company contractors: ## FreeAgent [FreeAgent](https://sg-accounting.co.uk/freeagent/) is one of the most contractor-friendly accounting platforms available and is built specifically for freelancers, contractors and small Limited Companies. It is HMRC-recognised for MTD for VAT and MTD for ITSA. ### Key Features - Extremely intuitive interface - Automated bookkeeping with bank feeds - Smart tax forecasting, including a live “tax timeline” - Invoicing and recurring invoices - Time tracking and project monitoring - Mileage tracking and expense capture via mobile app - Easy, secure access for your accountant ### Why It’s Ideal for Contractors - Designed around the workflow of small Limited Companies - Requires minimal training - Your accountant can handle compliance while you manage day-to-day finances - Automation reduces admin to a few minutes per week ## Xero Xero is a flexible cloud accounting package with strong reporting and a large app marketplace. ### Key Features - Customisable with numerous add-ons - Good reporting tools - Strong bookkeeping features - Bank feeds and receipt capture ### Considerations for Contractors - More complex than FreeAgent - Some contractor-specific features require paid extras - Better suited to larger small businesses or those with complex needs ## QuickBooks Online QuickBooks is a well-known brand with a wide feature set for small businesses. ### Key Features - Accessible dashboard - Strong invoicing and expense tracking - Bank feed connections - Good customer support and resources ### Considerations for Contractors - Some Limited Company features require higher-tier plans - Interface can feel busy if your needs are simple - Not as contractor-focused as FreeAgent ## Which Software Is Best for Contractors? While all three platforms have their strengths, [FreeAgent consistently ranks as the top choice](https://sg-accounting.co.uk/freeagent/) for UK Limited Company contractors. This is because: - It’s built for freelancers and contractors specifically - It requires very little financial knowledge to use confidently - The automation – especially bank feeds – dramatically reduces admin - The tax timeline offers complete visibility of your liabilities - Accountant access is seamless, improving accuracy and efficiency Contractors tend to prefer software that works quickly, intuitively and without additional plug-ins or upgrades. FreeAgent delivers exactly that. ## FAQs ### [Do I really need accounting software as a Limited Company contractor?](#f022cb3794c7a1efa) Yes. Between MTD requirements, real-time compliance obligations, and Limited Company record-keeping, software is essential. ### [Will accounting software integrate with my business bank account?](#85ea856ba53068d3a) Yes – FreeAgent, Xero and QuickBooks all support automatic bank feeds, meaning your transactions are synced daily. ### [Does my accountant need access to my software?](#945fcc0fc5a8094e6) Absolutely. When your accountant has access to your real-time data, everything from VAT returns to year-end accounts becomes faster, more accurate, and far less stressful. ### [Is FreeAgent free with certain business bank accounts?](#ed3beb76d91f7de94) Yes. Some NatWest Group business accounts offer FreeAgent for free, though at SG Accounting [we include FreeAgent within our package](https://sg-accounting.co.uk/freeagent/) regardless of your bank. ## Final Thoughts Choosing the right accounting software is a crucial early step for any Limited Company contractor. While Xero and QuickBooks are strong contenders, FreeAgent stands out as the most contractor-friendly platform, thanks to its automation, ease of use, smart tax tools and seamless accountant collaboration. At SG Accounting, we provide FreeAgent as part of our [fully inclusive contractor package](https://sg-accounting.co.uk/prices/) because it gives you everything you need to stay in control of your finances, with your accountant always connected and ready to support you. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by senivpetro – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [Why Should I Use a Specialist Limited Company Contractor Accountant Instead of a General Accountant?](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** If you’re [starting out as a limited company contractor](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/), choosing the right accountant is one of the most important decisions you’ll make. While a general accountant can handle standard bookkeeping and tax returns, a specialist contractor accountant understands the unique rules, tax efficiencies, and compliance obligations that apply specifically to contractors. This expertise can save you time, increase your take-home pay, and help you avoid costly mistakes. ## Key Takeaways - Specialist accountants understand IR35, off-payroll rules, and contractor-specific tax planning. - They offer tailored advice on structure, setup, salary/dividends, and expenses. - They save you significant time through streamlined systems and proactive support. - A specialist reduces your compliance risk and provides peace of mind. Sorry, your browser doesn't support embedded videos. ## Contents ## Specialist Expertise Designed for Contractors A limited company contractor operates very differently from a traditional small business. A specialist accountant focuses exclusively on this niche and understands the legislation that affects you day-to-day. What this means for you - Confidence you’re operating compliantly under [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/) and off-payroll rules - Tailored guidance on [allowable expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) and tax planning strategies - Insight based on supporting contractors in your sector every day ### Why General Accountants Often Fall Short General accountants may be excellent at broad accounting tasks, but their knowledge of contractor-specific legislation is often limited – which can lead to missed opportunities or compliance risks. ## Support From the Very Start One of the biggest advantages of choosing a specialist is the guidance you receive before you even begin trading. What a specialist contractor accountant helps you with - Deciding between sole trader, umbrella, or [limited company](https://sg-accounting.co.uk/blog/what-are-the-pros-and-cons-of-contracting-through-a-limited-company/) - Registering your company with Companies House and HMRC - Setting up payroll, [VAT](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/), corporation tax, and [business banking](https://sg-accounting.co.uk/blog/how-does-business-banking-work-for-small-businesses-and-contractors/) - Understanding [your responsibilities as a company director](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) With the right structure and systems in place early, you avoid costly mistakes and gain clarity on your financial obligations from day one. ## Maximising Tax Efficiency the Right Way Contractors benefit from several tax planning options – but only if they’re handled correctly. A specialist accountant ensures you’re taking advantage of them safely and effectively. Common areas where specialists add value - [Salary and dividend](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) planning - Claiming [business expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) correctly - Making use of available allowances and reliefs - [VAT considerations](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/), including the Flat Rate Scheme Your accountant keeps you aligned with HMRC rules, files your returns on time, and ensures every action taken on your behalf stands up to scrutiny. ## Saving You Time Through Streamlined Systems As a contractor, your time is your most valuable asset. Specialist accountants use [cloud-based accounting tools](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) (such as [FreeAgent](https://sg-accounting.co.uk/freeagent/)) to remove admin from your working week. How this helps you - Automated bookkeeping and receipt management - Real-time visibility of your financial position - Reduced manual data entry and fewer errors With less admin to worry about, you can focus on completing contracts, finding new opportunities, and building your business. ## Ongoing, Contractor-Focused Advice Contracting involves frequent shifts in rules, tax bands, and compliance requirements. A specialist accountant provides continuous, unlimited support to help you navigate these changes effortlessly. ### What This Includes - Advice on new legislation and how it affects you - Guidance on taking breaks between contracts - Support with equipment purchases, investments, and planning ahead Instead of just producing accounts, a specialist helps you make confident, informed decisions throughout the year. ## FAQs ### [Why can’t a general accountant handle my contractor accounts?](#388efee9a86985e35) General accountants may not understand contractor-specific legislation such as IR35, off-payroll rules, or travel and subsistence regulations. This can lead to missed tax efficiencies or compliance issues. ### [Is a specialist accountant more expensive?](#91b20fea0f3307865) Not necessarily. Many contractor accountants offer fixed-fee packages that include everything you need, often at a lower cost than general firms that charge hourly. ### [Do I really need an accountant if I’m good with numbers?](#441717f6c3306f1bc) Even if you’re confident with finances, the accounting and contractor landscape is complex and constantly changing. A specialist accountant ensures you stay compliant and avoid penalties. ### [What software will I need as a contractor?](#a91571fac13fd9d37) Most specialist accountants provide cloud-based bookkeeping tools like FreeAgent as part of their service, giving you easy access to real-time financial information. ## Final Thoughts Running a limited company as a contractor offers fantastic flexibility and earning potential – but it also comes with responsibilities. A specialist contractor accountant helps you navigate these confidently, maximising your income, protecting you from compliance risks, and freeing up your time to focus on doing great work. If you’re ready to start contracting or want to get more from your existing setup, SG Accounting is here to help. [Get in touch](https://sg-accounting.co.uk/contact/) today to speak with a specialist who understands your world inside and out. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by wayhomestudio – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [Limited Company vs Inside IR35 - What Actually Changes?](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/) doesn’t stop you from contracting – it simply changes how you operate. When a role is outside IR35, you trade as an independent business through your Limited Company. When it’s inside IR35, the client or agency treats the role as employment for tax purposes, and income is typically taxed at source. Because the client decides IR35 status, not you, it’s important to understand what changes in practice once that decision is made. This guide explains the key financial, administrative and working differences between the two models – and how you can use that knowledge to plan ahead and even negotiate fairer rates. ## ## Key Takeaways - IR35 changes how you’re paid, not what you’re worth - Limited Company operation offers flexibility and efficiency, while inside IR35 roles bring simplicity and reduced admin - You can negotiate higher rates for inside IR35 contracts to maintain fair take-home pay - Keep your company ready for outside opportunities – the market shifts constantly - The best contractors adapt confidently to both structures ## Contents ## Quick Comparison – Limited Company vs Inside IR35 | Area | Outside IR35 (Limited Company) | Inside IR35 (Umbrella) | |:--|:--|:--| | Payment | Invoice client, paid gross to company | Taxed via PAYE before payment | | Tax | Salary + dividends + allowable expenses | Treated as employee income | | Expenses | Wide range claimable (business-related) | Limited, mainly travel to temporary workplaces | | Admin | Manage accounts, VAT, insurance | Minimal – handled by agency/client | | Control & flexibility | High – you decide how to deliver | Lower – client directs work | | Client risk | Contractor bears tax risk | Client bears IR35 liability | | Typical take-home | ~70–80 % of gross income | ~55–65 % of gross income | | Professional status | Independent business | Same skill, different tax treatment | *(Figures illustrative only – actual results vary by role and rate)* ## What Changes Financially? ### How You’re Paid Outside IR35, your company invoices the client or agency for its services. You then choose how to pay yourself – usually a small salary topped up by dividends. Inside IR35, payment is treated like a salary. Tax and National Insurance are deducted before you receive your income, often through the client’s payroll or an umbrella arrangement. You don’t invoice for services in the same way, and you can’t take dividends from that contract income. ### Deductions and Take-Home Impact Outside IR35, you pay Corporation Tax on company profits and can draw dividends, which are taxed at lower rates. Inside IR35, you pay full PAYE income tax and employee NI, while the fee-payer (client or agency) covers employer NI. That’s why take-home pay inside IR35 tends to be around 10-20 % lower for the same contract rate. You’re paying more tax overall, but you also have less admin and no corporate liability. ### Claiming Expenses When operating through your Limited Company, you can claim legitimate [business expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) such as insurance, [software](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/), professional fees, [accountancy costs](https://sg-accounting.co.uk/blog/how-much-does-a-contractor-accountant-cost-and-what-value-should-i-expect/) and travel to client sites (subject to HMRC’s 24-month rule). Inside IR35, the scope for claiming expenses is much narrower. Travel and subsistence are only deductible in very specific cases – because HMRC deem your place of work as ‘permanent employment’ – and most day-to-day business costs are not allowed. ## Negotiating Your Rate Using Take-Home Data If a contract is inside IR35, your tax burden is higher, and you don’t receive benefits like paid holidays, sick pay or employer [pension contributions](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/). To stay on a level footing with outside IR35 contractors or permanent employees, you may need to negotiate a higher day rate. Contractors who come prepared with clear figures are in a stronger position. Use reliable data from the Contractor Calculator take-home pay tools, which model the difference between inside and outside IR35 roles based on current tax rates. As a general guide, an inside IR35 rate around 20-25 % higher than the equivalent outside rate may achieve a similar net income. Example: If an outside IR35 contract pays £500 per day, a comparable inside IR35 rate might need to be around £600-£650 per day to offset the higher deductions. Be realistic, not every client has budget flexibility, but showing you understand the numbers and can back them up with credible data helps justify a fair adjustment. Negotiation is about maintaining parity for the value you deliver. ## What Changes Administratively? Operating through a Limited Company involves [ongoing responsibilities](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) such as: - Submitting annual accounts and Corporation Tax returns - Registering for [VAT](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) (if applicable) - Maintaining business insurance - Invoicing and record-keeping When you’re inside IR35 and running the contract through your limited company, you are still required to meet all of the above filing obligations. If however you run your IR35 contract through an umbrella company instead, most of this work disappears. If you already have a Limited Company, you can – and often should – keep it open. Many contractors [alternate between inside and outside engagements](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/). Keeping the company active ensures you can move quickly when an outside opportunity arises without needing to start from scratch later. Because managing company accounts, VAT returns and PAYE income from different roles can be complex, many contractors choose to use a [specialist accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/). An accountant can help you stay compliant, track earnings accurately across both inside and outside IR35 contracts and plan for tax efficiency. Using the same provider for both your accounting and umbrella services – as SG Accounting offers – keeps everything under one roof, making it far easier to manage mixed-status income within a single tax year. ## What Changes in Control and Working Style? [Outside IR35, you usually decide how and when to complete the work](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/). The client is buying a service or outcome, not your time. You manage your own tools, schedule and delivery approach. Inside IR35, the client has greater control. You may follow internal procedures, attend team meetings or work to set hours. These practical differences often feel subtle day to day but are significant legally. ### What Doesn’t Change - Your skills, experience and market value remain the same - You’re still self-employed between contracts, even if one engagement is taxed as employment - You can [move between inside and outside IR35 roles](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/) as opportunities arise - Good financial management and compliance matter in both models ## Managing Mixed-Status Portfolios Many modern contractors work both inside and outside IR35 during the year. You might take a long inside contract for stability, then switch to an outside role for greater flexibility and efficiency. To stay organised: - Maintain clear records for each engagement - Keep your Limited Company compliant, even if dormant for short periods - Track which income is PAYE (inside) vs company earnings (outside) This mixed approach is now common, and completely legitimate, as long as each role is handled according to its IR35 status. ## FAQs ### [What’s the difference between inside and outside IR35?](#dca888b7c1f069ef9) Outside IR35 means you operate as an independent business through your limited company and invoice the client directly. Inside IR35 means the contract is treated as employment for tax purposes, so Income Tax and National Insurance are deducted through PAYE before you’re paid. ### [How much does inside IR35 reduce take-home pay?](#f87a3f39916e1426f) Inside IR35 contracts typically result in 10–20% lower take-home pay compared to outside IR35 contracts at the same day rate. This is because you pay full PAYE tax and National Insurance instead of using a more tax-efficient salary and dividend structure through your limited company. ### [Can I still use my limited company for inside IR35 contracts?](#ab807788ef758f1d8) Yes. Many contractors keep their limited company active while working inside IR35 contracts. Others choose to run inside IR35 work through an umbrella company instead, while using their limited company for outside IR35 projects when opportunities arise. ### [Can I claim expenses if I’m inside IR35?](#53dba3ff87acb26ea) Expense claims are much more limited inside IR35. Most everyday business expenses cannot be claimed, and travel and subsistence are only allowed in specific situations. Outside IR35 contractors can generally claim a wider range of legitimate business expenses through their limited company. ### [Should I negotiate a higher rate for inside IR35 contracts?](#9020587beb0a649b6) Yes. Because inside IR35 contracts usually result in lower net income and don’t include employee benefits like holiday pay or pension contributions, many contractors negotiate higher day rates to offset the additional tax burden. ## Final Thoughts Knowing what actually changes under IR35 helps you plan, negotiate and stay compliant. Whether your next engagement is inside or outside IR35, you can still protect your income and operate confidently with the right setup. At SG Accounting, we help contractors manage both sides of IR35 – from Limited Company accounting and compliance to understanding take-home pay and rate negotiations. If you’d like to discuss your options or calculate the difference in take-home pay, our team can help you make an informed decision. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *photo by TheStandingDesk on Unsplash* ) **Categories:** News **Tags:** Kerry Newman --- ### [Moving Between Inside and Outside IR35](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** Since the [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/) reforms in 2021, contracting has changed for good. Many professionals now move between [inside and outside IR35](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) roles depending on the client, the project, or market conditions. If you’ve found yourself switching between the two, you’re not doing anything wrong – you’re adapting to how the modern contracting market works. Each role has its own rules, payment structure and advantages. With the right systems and advice, moving between statuses can be straightforward, compliant and stress-free. ## ## Key Takeaways - It’s normal to move between inside and outside IR35 roles - Keep your Limited Company active for flexibility - Separate and track PAYE vs company income carefully - Use the Contractor Calculator to plan realistic take-home pay - Stay compliant by ensuring each contract is individually assessed - Partner with an accountant who manages both accounting and umbrella needs - Inside IR35 doesn’t define your professionalism – it’s just a different way of working ## Contents ## Why Contractors Move Between Statuses ### The New Reality of Contracting A few years ago, most contractors either worked through their Limited Company full-time or operated inside IR35. Today, it’s common to do both. - Some clients [only offer inside IR35](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) roles due to internal policy or risk appetite - Others are happy to engage contractors outside IR35 for specific, outcome-based projects - Contractors prioritise continuity of work, taking whichever option makes commercial sense at the time ### It’s Not About Right or Wrong Inside IR35 isn’t “bad,” and outside IR35 isn’t “better” – they’re simply different. - An inside role means you’re taxed as an employee for that engagement - An outside role means your Limited Company invoices as an independent business Both are legitimate, as long as each is handled correctly and the paperwork matches the working reality. ## Key Differences to Plan For The main contrasts between inside and outside IR35 are practical rather than emotional. Once you understand them, switching between the two becomes much easier. | **Area** | **Outside IR35 (Ltd Co)** | **Inside IR35** | |:--|:--|:--| | **Payment** | Invoiced gross to company | Taxed via PAYE before payment | | **Tax timing** | Dividends & Corporation Tax | Real-time PAYE deductions | | **Expenses** | Broadly claimable | Limited and tightly defined | | **Admin** | More paperwork | Minimal admin | | **Control & flexibility** | Higher – you choose how to deliver | Lower – client controls method/timing | Inside IR35 may feel restrictive, but it also removes administrative burdens. Outside IR35 offers flexibility and efficiency but requires more record-keeping and responsibility. ## How to Manage the Transition Smoothly ### Keep your Limited Company ready If you’ve decided to take an inside IR35 role via an umbrella company rather than through your limited company, don’t close your company straight away. You may need it again soon, and closing and reopening later adds cost and complexity. If you already have a company, you [can keep it active or dormant while working inside IR35](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/). It remains a valuable structure for future projects. ### Track Income Correctly The key to staying compliant is keeping PAYE income and Limited Company income separate when using an umbrella company for your IR35 caught role: - File payslips and umbrella statements separately from company invoices - Don’t run PAYE through your company for inside IR35 roles – that’s handled by the fee-payer - Keep a clear record of which contract falls under which model A specialist accountant can make sure you report correctly and avoid crossover errors. ### Budget for Fluctuating Take-Home Pay Switching between statuses can cause variation in cash flow. Inside IR35 roles usually result in lower take-home pay but provide stability and regular income. Outside IR35 contracts offer higher efficiency but may have gaps between projects. Use reliable tools like the Contractor Calculator take-home pay comparison to estimate what each arrangement means for your finances. ### Use an Accountant Who Understands Both Models A contractor-focused accountant can manage all your income sources and help plan for tax across the year. If you also use an umbrella company, having the same provider for both simplifies everything: - One point of contact - Unified records - Consistent advice on compliance and reporting At SG Accounting, this joined-up support ensures nothing slips through the cracks. ## Working Habits That Help Across Both Setups Even when you’re inside IR35, it pays to operate like a business. - Maintain insurance, professional memberships and certifications. - Keep your personal brand visible through a company website or LinkedIn profile. - Treat each engagement as a client relationship, not a job. These habits not only support outside IR35 work but also signal professionalism that clients respect, whichever side of IR35 you’re on. ## How to Plan Your Contracting Strategy ### Balance Income Stability and Independence Inside IR35 roles often offer steady, long-term work, while outside IR35 contracts provide higher earnings potential and greater autonomy. Many contractors mix the two to balance security and flexibility throughout the year. ### Stay Informed and Adaptable IR35 interpretations continue to evolve. Keep up with HMRC updates and industry analysis so you can anticipate market shifts. The best contractors adapt quickly, taking advantage of opportunities on both sides of the legislation. ## Keeping Compliant When Switching ### Ensure Each Contract Is Assessed Individually Remember: every engagement requires its own Status Determination Statement (SDS). Clients cannot lawfully apply blanket decisions. If you suspect a role was marked inside IR35 without a proper review, you can request the SDS and ask for the reasoning behind it. If you disagree, you can use the formal disagreement process: submit your evidence in writing and the client must respond within 45 days. Staying informed about your rights keeps the process professional and compliant. ### Watch Timing and Reporting - Company tax year and personal PAYE reporting may overlap - A good accountant ensures both sets of records reconcile smoothly - This protects against overpayment or double taxation ## How Your Accountant and Umbrella Provider Support You Managing mixed IR35 income is much simpler when you work with an integrated provider. They can: - Keep your company compliant - Manage umbrella payments if you choose to run the IR35 role through an umbrella company - Handle Corporation Tax, [VAT](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) and personal tax under one plan - Track your income, expenses and deadlines automatically SG Accounting offers both accounting and umbrella services under one roof, helping you transition between contracts without confusion or duplication. ## The Mindset That Makes It Work Moving between inside and outside IR35 isn’t a setback – it’s flexibility. The contractors who thrive today are those who: - Stay professional and adaptable - Keep their business in good standing - View every engagement as an opportunity, not a restriction Adopting this mindset keeps your career stable, compliant and forward-looking, whatever changes the legislation brings next. ## FAQs ### [Can I move between inside and outside IR35 contracts?](#f81903045ef119060) Yes. It’s very common for contractors to work on both inside and outside IR35 contracts during the same year. Different clients have different policies and risk appetites, so many contractors switch between models depending on their clients. ### [Should I keep my limited company if I take an inside IR35 contract?](#cf47831e92b12e711) In most cases, yes. If you already have a limited company, it’s usually worth keeping it active or dormant while working inside IR35. This gives you flexibility to move quickly when a suitable outside IR35 opportunity becomes available again. ### [How do I manage tax when working both inside and outside IR35?](#dec951306a45bb352) You need to keep PAYE income from inside IR35 roles separate from your limited company income. Inside IR35 earnings are taxed at source through payroll, while outside IR35 income is invoiced through your company. A specialist accountant can help ensure everything is recorded correctly and reported properly to HMRC. ### [Does moving inside IR35 mean I’ve done something wrong?](#e900754c3dd57b6e3) No. Moving inside IR35 is now a normal part of modern contracting. Many clients use inside IR35 contracts because of compliance concerns or internal policy. It’s simply a different way of being taxed for that engagement; it doesn’t reflect your professionalism, skills, or experience. ### [How does inside IR35 affect take-home pay?](#4212bdeb10bbaea61) Inside IR35 contracts usually result in lower take-home pay because tax and National Insurance are deducted through PAYE before you’re paid. Outside IR35 contracts are generally more tax-efficient, but they also come with more admin and responsibility through your limited company. ### [Do I need an accountant if I work both inside and outside IR35?](#eca1078dbf0691564) Using a specialist contractor accountant is highly recommended when managing mixed IR35 income. They can help with PAYE reporting, company accounts, VAT, Corporation Tax, and ensuring your inside and outside IR35 income is kept separate and compliant. ## Final Thoughts Modern contracting means adapting to different IR35 outcomes with confidence. Whether you’re working through your Limited Company or via an umbrella, staying organised and informed keeps you in control. At SG Accounting, we help contractors manage both sides of IR35 – from Limited Company compliance to umbrella payroll – giving you a single, trusted point of contact for all your contracting needs. If you’d like to simplify how you manage inside and outside IR35 work, get in touch with our team today. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by wavebreakmedia\_micro – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [Can Contractors Claim Client Entertaining and Staff Entertainment Expenses](https://sg-accounting.co.uk/blog/can-contractors-claim-client-entertaining-and-staff-entertainment-expenses/) **Published:** August 19, 2026 **Author:** Kerry Newman **Content:** Entertainment expenses are one of the most misunderstood areas of tax for limited company directors. Many contractors assume that if an [expense](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) is business-related, it must be tax deductible. However, HMRC applies different rules depending on who receives the benefit. The tax treatment of taking a client out for lunch is very different from hosting a staff Christmas party or buying a small gift for an employee. Understanding these distinctions can help you claim legitimate expenses correctly while avoiding unexpected tax bills or disallowed deductions. In this guide, we’ll explain the rules around client entertaining, staff entertainment, trivial benefits and gifts. ## ## Key Takeaways - Client entertaining is generally not tax deductible for Corporation Tax purposes. - Staff entertaining can often be claimed as an allowable business expense. - Annual staff events may qualify for tax relief if certain conditions are met. - Directors can receive trivial benefits without triggering tax, subject to HMRC limits. - Different rules apply depending on whether the recipient is a client, employee or director. Sorry, your browser doesn't support embedded videos. ## Contents ## What counts as business entertainment? Business entertainment generally refers to hospitality provided to clients, customers, suppliers, employees or other business contacts. Common examples include: - Restaurant meals - Sporting events - Theatre tickets - Hospitality events - Christmas parties - Team-building events The tax treatment depends largely on who is being entertained. ### Can I take a client out for lunch and claim it through my company? Yes, your company can pay for the expense. However, this is where many contractors become confused. Although the expense can be recorded within your company accounts, client entertaining is generally not an allowable deduction for Corporation Tax purposes. This means the expense does not reduce your taxable profits in the same way as most business expenses. In addition, [VAT](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) recovery is typically restricted on client entertaining costs. ### Why isn’t client entertaining tax deductible? HMRC views client entertaining as a discretionary business cost rather than a necessary expense incurred in earning income. As a result, the company can pay for: - Client lunches - Client dinners - Sporting hospitality - Entertainment events but the cost will usually be added back when calculating taxable profits. This means there is normally no Corporation Tax relief available. ## What is staff entertaining? Staff entertaining refers to hospitality and events provided to employees. Unlike client entertaining, staff entertaining is often tax deductible. Examples include: - Christmas parties - Summer events - Team meals - Staff celebrations - Team-building activities Provided certain conditions are met, these costs can usually be claimed as allowable business expenses. ## Can my company pay for a Christmas party? Yes. Annual staff events such as Christmas parties are often one of the most tax-efficient forms of staff entertainment available to limited companies. HMRC allows annual events to qualify for tax relief where: - The event is primarily for employees. - It is open to all employees. - The total cost does not exceed £150 per head, including VAT. The £150 limit also includes the cost of any guests attending the event. ### What happens if the Christmas party costs more than £150 per person? This is an area where directors often get caught out. The £150 limit is not an allowance. It is an exemption threshold. If the cost exceeds £150 per head, the entire amount may become taxable rather than just the excess. This is why careful planning is important when organising staff events. ### Can a contractor with no employees have a Christmas party? Potentially, yes. A limited company with a sole director and no other employees may still be able to benefit from the annual event exemption. In some circumstances, the director’s spouse or partner may also attend. However, the specific facts matter, so professional advice should be sought where there is uncertainty. ## What are trivial benefits? [Trivial benefits](https://sg-accounting.co.uk/blog/trivial-benefits-for-limited-companies-tax-free-gifts-and-employee-rewards/) are small gifts or perks that can be provided to employees and directors without creating a tax charge. Common examples include: - Bottles of wine - Flowers - Chocolates - Gift hampers - Birthday gifts When structured correctly, trivial benefits can be a tax-efficient way to reward employees and directors. ### What are the rules for trivial benefits? To qualify as a trivial benefit, all of the following conditions must be met: - The benefit must cost £50 or less. - It must not be cash or a cash voucher. - It must not be provided as part of a contractual entitlement. - It must not be provided in return for work performed. If these conditions are satisfied, the benefit can generally be provided tax-free. ### Is there a limit on trivial benefits for directors? Yes. For directors of close companies, the total value of trivial benefits is generally limited to £300 per tax year. This means a director could potentially receive several qualifying benefits throughout the year, provided the overall annual limit is not exceeded. ### Can my company buy me a bottle of wine? Potentially, yes. A bottle of wine is one of the most common examples of a trivial benefit. Provided the cost is £50 or less and the other trivial benefit conditions are met, it can often be provided tax-free. This is one of the reasons trivial benefits remain popular among owner-managed businesses. ### Can my company give gifts to clients? Sometimes. Business gifts may be allowable in certain circumstances. However, HMRC applies restrictions. Generally, gifts are more likely to qualify where: - They carry a clear business message. - They display your company branding. - They are not food, drink, tobacco or vouchers. The rules can be complex, so it’s worth seeking advice before making large or regular client gift purchases. ### What records should I keep? You should retain records showing: - Who received the benefit - The date it was provided - The business purpose - Supporting invoices and receipts - The cost per person where relevant For annual staff events, it is particularly important to calculate and document the cost per attendee. Good records make it easier to demonstrate compliance if HMRC requests evidence. ## Common mistakes contractors make ### Assuming client entertaining is tax deductible While the company can pay for the expense, Corporation Tax relief is generally unavailable. ### Exceeding the £150 annual event limit Going over the threshold can affect the tax treatment of the entire event. ### Exceeding the £50 trivial benefit limit Even a small excess may prevent the benefit from qualifying. ### Providing cash gifts Cash and cash vouchers do not qualify as trivial benefits. ### Failing to keep records Without supporting documentation, legitimate claims may be difficult to defend. ## How entertainment expenses affect your tax bill Entertainment expenses do not all receive the same tax treatment. Client entertaining is generally not deductible for Corporation Tax purposes. Staff entertaining is often deductible when HMRC’s conditions are met. Trivial benefits can often be provided without triggering Income Tax or National Insurance liabilities. ## FAQs ### [Can I take a client out for lunch and claim it as a business expense?](#10209a20debe6553e) Your company can pay for the lunch, but the cost is generally not deductible for Corporation Tax purposes. ### [Can I reclaim VAT on client entertaining?](#44e5bc7026c6e02c0) In most cases, VAT recovery is not available on client entertaining expenses. ### [Can my limited company pay for a Christmas party?](#7f88127e4a084432e) Yes, provided the event meets HMRC’s conditions and the cost does not exceed £150 per head, including VAT. ### [Does the £150 Christmas party limit apply per event?](#f6060d8eb9f9aaab7) No. The exemption applies to annual staff functions and the total cost per attendee must remain within the limit. ### [Can a sole director have a Christmas party?](#f8a618d4752e44638) Potentially, yes. Depending on the circumstances, a sole director may still be able to benefit from the annual event exemption. ### [What is a trivial benefit?](#3b8c01e95d1752f89) A trivial benefit is a small gift or perk that meets HMRC’s conditions and can often be provided tax-free. ### [Can a director receive trivial benefits?](#586c9c4a70d753f31) Yes. However, directors of close companies are generally subject to an annual limit of £300. ### [Can my company buy me a bottle of wine?](#50d4487a98cfac27c) Provided the trivial benefit rules are met and the cost is £50 or less, a bottle of wine may qualify as a tax-free trivial benefit. ## Need advice on entertaining expenses? Entertainment expenses often involve some of the most misunderstood rules in the tax system. If you’re unsure whether a cost qualifies for tax relief, speak to your SG Client Director for tailored advice. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) **Categories:** News **Tags:** Kerry Newman --- ### [Are pension contributions an allowable business expense for directors?](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) **Published:** August 26, 2026 **Author:** Niamh Potter **Content:** Pension contributions are often one of the most tax-efficient expenses a limited company can pay on behalf of its directors. However, many business owners are unsure whether pension contributions qualify as an [allowable business expense ](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/)and how the tax relief works. The good news is that, in many cases, employer pension contributions made by a limited company can reduce taxable profits while helping directors save for retirement. In this guide, we'll explain how company pension contributions work, when they qualify as an allowable expense, and some of the key rules directors should be aware of. ## Key Takeaways - Pension contributions made by a limited company are usually an allowable business expense. - Employer pension contributions can reduce your company's taxable profits and lower Corporation Tax. - Contributions paid directly into a pension scheme do not normally attract Income Tax or National Insurance. - Pension contributions can be a tax-efficient way to extract value from your company while saving for retirement. - Annual pension allowances and other limits may affect how much can be contributed. Sorry, your browser doesn't support embedded videos. ## Contents ## Can a limited company pay into a director's pension? Yes. A limited company can make pension contributions on behalf of its directors and employees. These payments are known as employer pension contributions because they are paid directly by the company into a registered pension scheme. For many contractors and owner-managed businesses, this can be an effective way to build retirement savings while benefiting from Corporation Tax relief. Please note, you need to make your pension provider aware that you are making employer contributions and to check that they can accept these, so that the correct tax position is applied. If it's assumed that they are employee contributions, your provider may claim incorrect tax credits from HMRC. Some pension providers cannot accept employer contributions all together, so it's important to check. ## Are pension contributions an allowable business expense? In many cases, yes. Employer pension contributions are generally treated as an allowable business expense provided they are made wholly and exclusively for the purposes of the business and profit is available in order to make the contribution. This means the contribution can usually be deducted when calculating the company's taxable profits. As a result, the company may pay less Corporation Tax than it otherwise would have done. This favourable tax treatment is one reason pension contributions are commonly used by limited company directors. ## How do pension contributions reduce Corporation Tax? Allowable business expenses reduce taxable profits. For example, if a company generates profits of £100,000 and makes an employer pension contribution of £10,000, Corporation Tax is generally calculated on the remaining profit after allowable expenses have been deducted. The exact tax saving will depend on the company's circumstances and tax position. If for example the company pays Corporation Tax at the main rate (25%) – you will save £2,500 in tax by putting the £10,000 employers pension contribution through. However, unlike dividends, pension contributions are typically paid before Corporation Tax is calculated, making them an attractive option for many directors. ## Do pension contributions create a Benefit in Kind? In most cases, no. Employer pension contributions paid into a registered pension scheme are not normally treated as a taxable Benefit in Kind for the director or employee receiving them. This means the contribution can often be made without creating an immediate personal tax charge. This is one of the reasons pension contributions are often viewed as a tax-efficient business expense. ## How much can my company contribute to my pension? The amount a company can contribute will depend on a number of factors, including: - Your available annual allowance – for the 2026/27 tax year the standard annual allowance is £60,000. However, please review your circumstances as you may have a reduced allowance (for example a tapered allowance). - Previous pension contributions - Carry forward rules - Your wider retirement planning objectives Pension legislation can be complex, and allowances may vary depending on individual circumstances. If you're considering making significant contributions, professional financial advice is recommended. ## Do I need to take a salary before my company can contribute to a pension? Not necessarily. Employer pension contributions are generally separate from personal pension contribution rules. This means directors who take a relatively small salary topped up by way of dividends may still be able to receive employer pension contributions from their company, as they are often also the fee-earner within the company, generating the income. However, pension and tax legislation can be complex, so it is important to ensure contributions are structured correctly. If you are planning on making contributions for anyone who is not a fee-earner or director of the company, they should seek personalised advice, as HMRC may deem some contributions excessive, with corporation tax restrictions. ## Are pension contributions more tax efficient than salary? In many cases, they can be. Salary is typically subject to: - Income Tax - Employee National Insurance - Employer National Insurance Employer pension contributions often avoid these charges because the money is paid directly into a pension rather than to the individual. However, pensions are designed for long-term savings, meaning the funds cannot usually be accessed immediately. The most suitable approach will depend on your financial objectives and personal circumstances. ## Pension contributions versus dividends Dividends remain a popular way for directors to extract profits from their company. However, dividends are generally paid from profits that have already been subject to Corporation Tax. Pension contributions can be more tax efficient because they are typically treated as an allowable business expense before Corporation Tax is calculated. This does not necessarily mean pensions are always the best option, but it does explain why they often form part of a wider tax planning strategy. ## What records should I keep? To support pension contributions made through your company, you should retain: - Pension provider documentation - Contribution schedules - Payment records - Company accounting records - Board minutes where appropriate Good record keeping helps demonstrate that contributions have been made correctly and supports your company's tax position. ## Common mistakes directors make **Assuming there are no contribution limits** Pension allowances can affect how much can be contributed tax efficiently. **Focusing only on tax savings** While pensions can be highly tax efficient, funds are generally intended for long-term retirement planning. **Leaving pension planning until year-end** Considering pension contributions throughout the year often allows for better planning and decision-making. **Failing to seek advice** Pension rules can be complex, particularly where larger contributions or carry forward provisions are involved. **Making the pension provider aware that payment is coming from your company** Please note, you need to make your pension provider aware that you are making employer contributions and to check that they can accept these, so that the correct tax position is applied. If it's assumed that they are employee contributions, your provider may claim incorrect tax credits from HMRC. Some pension providers cannot accept employer contributions all together, so it's important to check. **How pension contributions fit into your business expense strategy** For many contractors and limited company directors, pension contributions are one of the most valuable allowable business expenses available. They can: - Reduce taxable profits - Lower Corporation Tax - Build retirement savings - Avoid certain employment taxes When used appropriately, pension contributions can play an important role in both tax planning and long-term financial planning. ## FAQs ### [Are pension contributions tax deductible for a limited company? ](#ea66a5401bf029a14) In many cases, yes. Employer pension contributions are generally treated as an allowable business expense and can reduce taxable profits, which in turn reduces corporation tax. ### [Can my company pay into my personal pension? ](#2922142b33b7998d5) A company can usually make employer pension contributions into a registered pension scheme on behalf of a director or employee. ### [Do company pension contributions create a Benefit in Kind? ](#52c1c8ecb2f5c2039) Typically no. Employer pension contributions paid into a registered pension scheme do not usually create a taxable Benefit in Kind. ### [Can I make pension contributions if I only take a small salary? ](#267ab1b2a2d0ea740) Potentially, yes. Employer pension contribution rules are generally separate from personal pension contribution limits. ### [Is there a limit on how much my company can contribute? ](#d9db26338a4ef6248) Pension allowances and other tax rules may restrict how much can be contributed without creating additional tax consequences. ### [Are pension contributions more tax efficient than dividends? ](#5e444b4e3d54dee1b) In some circumstances they can be, because pension contributions are generally paid before Corporation Tax is calculated. However, the most appropriate strategy depends on your personal circumstances and financial objectives. ### [What records should I keep? ](#b35aeb0ea7ad6786d) Keep contribution records, pension provider documentation, payment records and any supporting company documentation relating to the contributions. ## Final thoughts – need advice on pension contributions? Pension contributions can be one of the most valuable allowable business expenses available to limited company directors. If you're considering making contributions or would like advice on the most tax-efficient approach for your circumstances, speak to your SG Client Director for tailored guidance. Niamh Potter Client Director Niamh joined the team in December 2018, starting out with no prior accountancy experience and working her way up through the business over the years. She now supports clients in her role as Client Director at SG, alongside preparing year-end accounts. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/niamh-potter/) **Categories:** limited company, New to contracting, Pensions, Running your business, Salary/dividends, Tax **Tags:** Niamh Potter --- ### [What Are the Pros and Cons of Contracting Through a Limited Company?](https://sg-accounting.co.uk/blog/what-are-the-pros-and-cons-of-contracting-through-a-limited-company/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** One of the first key decisions every [new contractor](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) needs to make is how to structure their business. Whilst there are several ways to operate, such as working through an umbrella company or as a sole trader, many contractors decide that setting up their own Limited Company offers the best balance of professionalism and financial control. However, forming a Limited Company also comes with many more responsibilities. It’s not the right fit for everyone, and understanding both the benefits and potential drawbacks will help you make an informed decision. ## ## Key Takeaways - Contracting through a limited company can increase your take-home pay and offer valuable tax planning opportunities - You can claim allowable business expenses through your company to reduce your corporation tax - Setting up a limited company provides limited liability protection, keeping your personal assets separate from your business - Running your own company involves much more administration work and comes with additional legal responsibilities - A specialist contractor accountant can manage filings and help ensure compliance Sorry, your browser doesn't support embedded videos. ## Contents ## Benefits of Contracting Through a Limited Company Running your own Limited Company comes with a number of benefits that can make contracting more financially efficient: ### Take-Home Pay One of the main reasons contractors choose to operate through a Limited Company is the potential for higher take-home pay. When working outside [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/), you can take a small salary and draw the rest of your income as dividends, which are taxed differently from regular earnings. This structure can reduce your overall tax burden and allow you to keep more of what you earn. By getting professional advice from a [specialist accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/), you can find the right balance between [salary and dividends](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) to make the most of your income. ### Claimable Business Expenses As a Limited Company contractor, you can claim certain costs as [business expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/), which will reduce your taxable income. This includes travel, [software](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/), equipment, [accountancy fees](https://sg-accounting.co.uk/blog/how-much-does-a-contractor-accountant-cost-and-what-value-should-i-expect/), [insurance](https://sg-accounting.co.uk/blog/what-insurance-do-i-need-as-a-limited-company-contractor/), [pension contributions](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) and relevant industry training, among other things. Claiming these correctly can offer significant tax benefits, but it’s crucial that you do this properly. It’s not always obvious what qualifies as an allowable expense and making mistakes can lead to penalties from HMRC. Getting advice from a specialist contractor accountant can help you navigate the complex rules for what can and can’t be claimed. ### Professional Credibility Many clients and agencies view limited companies as more professional, which can help you secure higher-value contracts. It signals that you are serious about your work and that you see contracting as a long-term career, not just a temporary arrangement. ### Limited Liability Protection By setting up as a Limited Company, your company will be considered a separate legal entity to you as an individual. As such, you can have peace of mind knowing your personal assets are protected if the business encounters any legal or financial issues. ## Drawbacks of Contracting Through a Limited Company Running a Limited Company requires a lot more attention than simply remaining a sole trader or using an umbrella company. Whilst the financial rewards and flexibility are significant advantages, they come with more responsibilities. Understanding [what’s expected of a Limited Company director](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) can help you decide whether it’s worth choosing this option based on your circumstances. ### Administrative Work As a company director, you are legally responsible for ensuring your business meets [all its filing obligations](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) with HMRC and Companies House. This includes: - Submitting annual accounts and confirmation statements to Companies House - Filing tax returns with HMRC - Maintaining accurate records - Managing invoices and payroll. Failing to meet these obligations can lead to fines, penalties or even legal action. But don’t worry, having a good accountant by your side will make it much easier to stay on top of everything. ### Compliance and IR35 Risk The [IR35 legislation](https://sg-accounting.co.uk/blog/what-is-ir35/) is an important consideration for contractors operating through a limited company. It determines whether you are genuinely self-employed (outside IR35), or if you are essentially being employed by the company (inside IR35). HMRC treats contracts inside IR35 as though you are a regular employee, meaning you will have to pay the relevant tax and National Insurance. With the impact this can have on your take-home pay, it’s important to understand how IR35 applies to your contracts. You can always speak to your accountant if you need professional advice on IR35 and how it will affect you. ### Time Commitment Running a limited company involves more time and effort than working under an umbrella company or as a sole trader. You will need to manage your company’s finances, stay compliant with tax legislation, and ensure that all filings are completed on time. Many contractors choose to outsource these responsibilities to a specialist accountant so they can focus on their work and clients. ### Director Responsibilities As the director of your Limited Company, you have [additional responsibilities and legal duties](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) you must adhere to. These include acting in the best interests of your company, keeping accurate financial records, and complying with tax and employment laws. While these responsibilities can seem demanding at first, they quickly become manageable with the right support and processes in place. ## Alternatives to a Limited Company While a Limited Company can be a great option for many contractors, it’s not the only way to operate. Depending on your situation, contract type, and income level, another structure might be more practical or better suited to your needs. ### Umbrella Company An umbrella company is a popular choice for contractors who prefer simplicity and less administrative responsibility. When you work under an umbrella, you become an employee of that company. The umbrella handles your tax, National Insurance, and payroll, and pays you a salary after deductions. Whilst it is convenient and low maintenance, you have less control over your finances and fewer tax planning opportunities. As such it’s often a good option for short-term contracts, those working inside IR35, or contractors who want to avoid the admin that comes with running their own business. ### Sole Trader Operating as a sole trader is the simplest way to start contracting. You work for yourself and report your income directly to HMRC through a self-assessment tax return. There’s no need to register a separate company or file annual accounts with Companies House. The trade-off is you don’t have limited liability, meaning there’s no legal separation between you and your business. Any debts or liabilities are your own personal responsibility. Sole traders also have less tax planning options. The sole trader structure is typically suited for smaller or part-time contracts thanks to its simplicity. ## FAQs ### [What does it mean to contract through a limited company?](#11d60b4c1b5a9c523) Contracting through a limited company means you operate as a separate legal entity, providing your services to clients through your own company rather than being employed directly. You become both the company director and shareholder, which gives you greater control over your finances, taxes, and business decisions. ### [Why do contractors choose to set up a limited company?](#f71de1c1bd2d0772c) Many contractors choose to form a limited company because it offers flexibility, professional credibility, and tax efficiency. It allows you to manage your income through a mix of salary and dividends, claim allowable business expenses, and build a strong professional brand that appeals to clients and agencies. ### [How does a limited company compare to being a sole trader?](#c67bac6428cc89e10) Operating as a sole trader is simpler and requires less paperwork, but it does not offer limited liability protection. This means you are personally responsible for any debts or legal issues. A limited company, on the other hand, separates your personal and business finances, offering more protection and better tax planning opportunities. ### [Can I switch from an umbrella company to a limited company later?](#9a2c208ab36cf0657) Yes. Many contractors start under an umbrella company to test contracting and later switch to a limited company once they have stable work and income. A specialist accountant can help you transfer smoothly, ensuring that all financial and tax records are correctly set up for your new company. ### [Is contracting through a limited company suitable for short-term projects?](#f4a7819ca5f54453e) It depends on the nature of your contracts. If you work on occasional or short-term projects, running a limited company might involve more administration than it’s worth. In these cases, working under an umbrella company may be more practical. Speak with an accountant if you’re not sure which to choose based on your circumstances. ### [Do I need an accountant to run a limited company?](#e32dcd0c556708afe) While not legally required, having an accountant is highly recommended. A specialist contractor accountant can manage your accounts, file returns, handle payroll, ensure compliance with IR35, and help you make the most of available tax efficiencies. ## How SG Accounting Can Help Whichever option you choose, our team of specialist contractor accountants are here to help guide you. Whether you’re just starting out or looking to switch from one company structure to another, we can guide you through it. If you have any questions, don’t hesitate to contact your Client Director. Not yet signed up with us? [Get in touch](https://sg-accounting.co.uk/contact/) to sign up today! Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by benzoix – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [81,000 HMRC Letters: Crypto tax has entered a new phase](https://sg-accounting.co.uk/blog/81000-hmrc-letters-crypto-tax-has-entered-a-new-phase/) **Published:** September 16, 2026 **Author:** Kerry Newman **Content:** If you thought crypto tax was something HMRC wasn’t paying much attention to, recent events are suggesting otherwise. [As reported recently by the BBC](https://www.bbc.co.uk/news/articles/c0ej09nywdno), HMRC sent 81,000 warning letters to people they believe have crypto-related tax obligations. Their message is clear: crypto tax compliance is becoming an increasing priority. At the same time, new reporting rules and enhanced data-sharing arrangements mean HMRC now has access to more information about crypto transactions than previously. Whether you hold cryptocurrency as an investment, trade regularly, earn staking rewards or use multiple wallets and exchanges, it’s really important to understand what these changes could mean for you. ## Why Is HMRC Focusing on Crypto? The crypto market has matured significantly over the past few years, along with HMRC’s approach to taxation. Many crypto investors presume that their activity is difficult for tax authorities to track, especially if assets are held across multiple exchanges, wallets or platforms. However, recent developments mean that assumption is becoming increasingly risky. Three key changes are driving this change: 1. The introduction of CARF (Crypto-Asset Reporting Framework) 2. HMRC’s Guidelines for Compliance 13 (GfC13) 3. HMRC research highlighting the challenges taxpayers face when reporting crypto correctly Taken together, these developments signal a new era of crypto tax compliance. ## CARF means more Crypto Data is being shared The Crypto-Asset Reporting Framework (CARF) came into force in the UK on 1 January 2026. Under these rules, many crypto service providers are now required to collect and report information about their users. The UK will also receive information from participating overseas jurisdictions, giving HMRC greater visibility of crypto activity that takes place even outside the UK. For crypto investors, this means transactions are becoming far more transparent. If you’ve ever bought, sold, swapped, transferred or earned crypto across multiple platforms, HMRC may have access to more information about your activity than you realise. That doesn’t mean you’ve done anything wrong. It does mean however that keeping accurate records and reporting transactions correctly has become more important than ever. ## Crypto Tax isn’t always straightforward One of the biggest challenges for crypto investors is that taxable events sometimes aren’t obvious. Selling cryptocurrency for cash is often recognised as taxable, but tax implications can also arise when: - Swapping one cryptocurrency for another - Receiving staking rewards - Earning crypto income - Spending cryptocurrency on goods or services - Participating in certain DeFi activities For investors using multiple wallets and exchanges, transaction histories can quickly become fragmented and hard to track. As a result, it is not uncommon for people to accidentally miss transactions or misunderstand their tax position. ## HMRC wants more than just a number HMRC’s Guidelines for Compliance 13 place a strong emphasis on ensuring tax returns are accurate, complete and supported by evidence. It’s no longer enough to guess your crypto position or rely on incomplete information. The key question is not simply: **“What is my crypto gain?”** It’s: **“Can I show how that figure was calculated?”** If HMRC asked you questions about your return, you should be able to demonstrate where the numbers came from, how transactions were identified and how your gains, losses and income were calculated. ## Why HMRC’s research matters In May 2026, HMRC published research highlighting that many crypto investors struggle to understand their tax obligations. Importantly, the research recognised that compliance issues are not always caused by deliberate non-disclosure. In a lot of cases, investors simply find crypto tax rules confusing or have difficulty bringing together records from multiple platforms. This is also the reality faced by many crypto holders. As crypto portfolios become more complex, calculating an accurate tax position manually becomes increasingly challenging. ## The standard is changing The recent warning letters, combined with CARF and HMRC’s evolving compliance approach, suggest that expectations are changing. Historically, some investors may have focused on producing a reasonable estimate of their crypto gains. Today, the expectation is increasingly that taxpayers can provide a complete and well-supported calculation based on their full transaction history. The question is shifting from: **“What’s my crypto tax bill?”** to: **“Can I evidence exactly how it was calculated?”** ## Don’t wait until HMRC contacts you Receiving an HMRC letter doesn’t necessarily mean you’ve done something wrong. It can however be a sign that your crypto activity has been identified and may require a review. The best approach is to get ahead of the process. Reviewing your crypto position now, ensuring your records are complete and addressing any gaps before HMRC raises questions can help reduce stress and avoid potential complications later. Crypto may be digital, but the tax obligations are very real. ## How SG Accounting and Recap can help If you’re unsure about your crypto tax position, professional support is available. SG Accounting works alongside [crypto tax specialists Recap](https://recap.io/) to help investors understand their obligations, accurately calculate their gains and income, and ensure their tax returns are supported by complete transaction data. Whether you’ve made a handful of trades or manage a complex portfolio across multiple exchanges and wallets, our specialist team can help simplify the process and provide clarity on your reporting obligations. As an SG Accounting client, you’ll also receive an exclusive 20% discount on Recap crypto tax software. **Need help with crypto tax?** [**Get in touch with our specialist tax team today**](https://sg-accounting.co.uk/crypto-tax/) **to discuss your situation and stay ahead of the changing compliance landscape.** **Categories:** Cryptocurrency, limited company, News, Running your business, Tax **Tags:** Kerry Newman --- ### [VAT Schemes: Which one is right for your business?](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) **Published:** August 26, 2026 **Author:** Frances Bridge **Content:** It's important to ensure your business is using the correct VAT scheme, as it directly affects your cash flow, admin workload, and overall tax efficiency. So, whether you're approaching the VAT limit or you're already registered, it's important to fully understand your options so as to help make smarter financial decisions and avoid potentially costly mistakes. In this blog we'll breakdown each VAT scheme individually, to showcase how they work, give you practical steps to help you choose the best fit, and reveal real-life client experiences. ## Key Takeaways - Choosing the right VAT scheme for your business can improve your cash flow and reduce your admin - Standard VAT best suits those businesses that have high reclaimable VAT and produce regular invoicing - Cash Accounting helps businesses that deal with late-paying clients - Flat Rate Scheme simplifies VAT and can reduce the amount of VAT payable to HMRC, but limits VAT reclaim on business purchases - Annual Accounting reduces the overall amount of admin, but requires accurate forecasting Sorry, your browser doesn't support embedded videos. ## Contents ## Understanding your VAT Scheme options The reason for VAT schemes is to help businesses manage their VAT in a way that suits their size, cash flow, and admin capacity. Choosing a scheme that doesn't suit your business' needs can lead to issues such as paying VAT too early, missing out on reclaim opportunities, or even overpaying HMRC. Below is a breakdown of the four main VAT schemes which are available to small businesses. ### Standard VAT Accounting Scheme VAT within the standard scheme is accounted for when invoices are issued, rather than when they're paid. The standard scheme is best suited for businesses with high input VAT, regular invoicing, and strong bookkeeping. #### Pros: - Full VAT recovery on eligible purchases - Works well with accrual accounting #### Cons: - If clients pay late, it can create cashflow pressure #### **CASE STUDY – SG Accounting client** An SG Accounting client frequently purchased high‑value subcontractor services. Under the Flat Rate Scheme they were unable to reclaim input VAT, meaning a large portion of their costs were effectively inflated each month. As their business expenses grew, the Flat Rate Scheme became increasingly disadvantageous. They switched to the Standard VAT Scheme, allowing them to reclaim VAT on all eligible business purchases, which immediately reduced overheads and improved their overall profitability. ### Flat Rate Scheme (FRS) Under the Flat Rate VAT Scheme (FRS) you pay a fixed percentage of your gross turnover, rather than calculating the VAT due on each individual transaction. It's best for those service-based businesses with low expenses and a turnover under £150,000. You're allowed to remain using the FRS until your company's VAT inclusive turnover exceeds £230,000. #### Pros: - Simplified VAT reporting - It can provide the potential to save money, especially with the 1% first‑year discount and fixed rate percentages which are lower than the standard rate. - Following the 1st year discount of 1% on the Flat Rate Scheme, SG will monitor to see if Standard VAT is better, and your Client Director will be in contact to discuss the potential savings to see if you would like to make the switch. #### Cons: - Limited ability to reclaim VAT on purchases. Using the FRS, you can only reclaim the VAT you have been charged on a single purchase of capital expenditure goods, where the total cost is £2,000 or more. - It isn't cost-effective if you buy lots of equipment or stock ## Cash Accounting and Annual Accounting ### Cash Accounting Scheme Under the cash accounting scheme, you only pay VAT once your client has paid you and reclaim VAT once you've paid your suppliers. It's best for businesses with delayed invoice payments or low input VAT. #### Pros: - Better cash flow - You don't pay VAT on unpaid invoices #### Cons: - It's not available if your company's turnover exceeds **£1.35m** #### **CASE STUDY – SG Accounting client** An SG Accounting client invoices large corporate clients, many of which pay 45-60 days late. Before applying 'Cash Accounting' to their VAT scheme, they were paying VAT before receiving payment, meaning they were experiencing quite a significant cash-flow strain. They switched to Cash Accounting, which immediately eased pressure and stabilised their monthly finances. ### Annual Accounting Scheme Using the Annual Accounting Scheme, you'll submit one VAT return per year, with monthly or quarterly advance payments. It's best for businesses wanting predictable cash flow and reduced admin. #### Pros: - Less paperwork - Easier budgeting #### Cons: - Requires accurate forecasting - If turnover fluctuates, payments may not match the actual VAT total that's owed, which could result in considerable under or over payments. - It can't be used if your taxable turnover exceeds £1.35 million. ## Summary points - **The Flat Rate Scheme** simplifies VAT but limits reclaim opportunities. - **Cash Accounting** improves cash flow for late paid invoices. - **Annual Accounting** reduces admin but requires stable turnover. ## Choosing the right scheme for your business Selecting the right VAT scheme will depend on your business model, cash flow, and expenses. ### Key questions to ask - Do clients pay you late? - Do you have high reclaimable VAT? - Do you want simpler admin? - Do you regularly purchase equipment or stock? Your SG Client Director can help you model each scheme to see which offers the best financial outcome. ## FAQs ### [What VAT scheme is best for contractors? ](#2e4e0ce7683c3c410) Contractors with low expenses often benefit from the Flat Rate Scheme thanks to simplified reporting and potential financial savings due to the lower % applied to your gross invoices. ### [Can I switch VAT schemes later? ](#8b30b69f1d4b7d273) Yes. You're able to switch schemes if your business changes. For example, if turnover grows or expenses increase. Your SG Client Director can advise on timing and HMRC requirements. ### [Is the Flat Rate Scheme still worth it in 2026? ](#1e937cc39374e4f69) It depends on your expenses. If you're a limited cost trader, you may pay more VAT under the 16.5% rate, making FRS less beneficial. Speak to your SG Client Director to discuss your personal circumstances. ### [Does Annual Accounting mean I only pay VAT once a year? ](#0789fa492c1e7fd89) No, you submit one return, but payments are made monthly or quarterly in advance. ## Final Thoughts Choosing the right VAT scheme can significantly improve your business's financial health. If you're unsure which scheme suits your situation, your SG Accounting Client Director can help you compare options and make the best decision. If you're not yet an SG client and want this level of tailored advice from your accountant, [get in touch to find out how we can help you](https://sg-accounting.co.uk/contact/). Frances Bridge Client Director Frances joined us in February 2024, and is part ACCA qualified. Since becoming an accountant in 2012, she particularly enjoys building relationships with her clients, and helping them make the most of their finances. In her spare time she enjoys travelling the world and spending time with her son George. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/frances-bridge/) [LinkedIn](https://www.linkedin.com/in/frances-bridge-b5654ba/) **Categories:** limited company, Running your business, Salary/dividends, Tax, VAT **Tags:** Frances Bridge --- ### [How to protect yourself and your business from HMRC tax scams in the UK](https://sg-accounting.co.uk/blog/protect-yourself-business-hmrc-tax-scams-uk/) **Published:** November 18, 2025 **Author:** Kerry Newman **Content:** UK tax scams are becoming increasingly sophisticated, especially around the Self-Assessment Tax return deadline. Fraudsters often try to impersonate HMRC to trick individuals and business owners into revealing personal or financial information. Whilst HMRC have reported a 12% drop in scam referral between August 2024 and July 2025, scams still very much exist, and it's important to be on your guard. In this blog we explain how to spot a fake HMRC message, how to avoid phishing and refund scams, and protect both you and your business from financial fraud. ## Key Takeaways - Learn how to identify fake HMRC calls, emails and texts. - Protect your business from phishing scams and refund fraud. - Know what action to take if you receive a suspicious message. - Know how to report tax scams to HMRC and Action Fraud. ## Contents ## Understanding HMRC Tax Scams **How HMRC tax scams work** Criminals will pose as HMRC using emails, texts, phone calls, or social media messages to steal personal data and money. In the 12 months to July 2025, HMRC received over 170,000 scam reports, including 47,000 fake tax refund offers. These scams have been known to: - Promise a tax rebate or a refund that you weren't expecting. - Request personal details from you, including bank details. - Threaten lawsuits, fines or arrest if you don't comply and respond immediately. Scam artists will usually use urgency as a catalyst to create panic, whereas genuine HMRC messages will never apply the same pressures, requesting you to act quickly. ## How to spot fake HMRC communication The following red flags should help you identify fake HMRC communication, and whether a message is genuine: - **The sender's email address:** genuine HMRC emails always end with @hmrc.gov.uk. - **Spelling mistakes:** whilst we're all human and small mistakes can occur, poor grammar or unusual wording can often signal a scam. - **QR codes:** only trust codes that direct you straight to the gov.uk website. - **Text messages:** HMRC will never request personal or financial details by text. - **WhatsApp:** HMRC will never use WhatsApp for tax refunds or rebates. - **Social media:** HMRC never contacts taxpayers through private messages. - **Phone calls:** HMRC would never threaten legal action or arrest. Ensure to hang up immediately if a call is heading that way. ## Tips to protect yourself and your business from scams ### Don't click on suspicious links - Always hover over links before clicking, to check where it leads. - Avoid any URL that doesn't direct to gov.uk ### Never open unknown attachments - HMRC rarely send attachments via email. - Always ensure to verify QR codes on the official HMRC website. ### Never respond directly Instead of replying to a suspicious message, get in touch with HMRC through its official phone number or website. ### Protect your bank and card details - Don't ever share your payment information through text or email. - Genuine HMRC refunds are paid automatically into your registered account. ### Don't succumb to pressure Scammers will often use urgency to make you act quickly. Take the time to verify any message before responding. ### Question unexpected contact If their contact is out of the blue, it's better to hang up and contact HMRC directly. ### Consult with your Client Director If you're still unsure whether the communication was genuine, [run it past your Client Director](https://sg-accounting.co.uk/contact/) to verify. ### File your tax return early By filing early, it reduces the pressure during peak scam seasons and helps you remain alert. ### Check HMRCs known scams list [Visit gov.uk](https://www.gov.uk/government/publications/phishing-and-bogus-emails-hm-revenue-and-customs-examples/phishing-emails-and-bogus-contact-hm-revenue-and-customs-examples) for the latest examples of tax scam messages and fake emails. ### Report any suspicious activity Finally, if you believe you've been the recipient of suspicious activity, report it to <phishing@hmrc.gov.uk>, text 60599, or contact [Action Fraud](https://www.reportfraud.police.uk/). ## What should you do if you believe you’ve been targeted? You should act immediately, to ensure your details are protected: - Change your passwords and contact your bank. - Forward phishing emails to <phishing@hmrc.gov.uk>. - Text scam messages to 60599. - Report online fraud to Action Fraud (03001232040). You're also able to visit the Government's ['Stop! Think Fraud' campaign](https://stopthinkfraud.campaign.gov.uk/), and the [National Cyber Security Centre's business toolkit](https://cybertoolkit.service.ncsc.gov.uk/) for guidance on protecting your data and staff. ## FAQs ### [How can you tell if an HMRC email is genuine? ](#e3a37c32cc195616f) Real emails from HMRC will come from email addresses ending in hmrc.gov.uk. They'll never ask you for personal or payment details or include attachments or links to claim refunds. ### [What should you do if you clicked on a suspicious HMRC link? ](#d8c51f2cf87033aaa) Immediately change your passwords, contact your bank, and report the incident to HMRC and Action Fraud. ## Final Thoughts Tax scams can affect anyone and everyone, from individual taxpayers to small business owners. Staying informed, verifying every message, and acting cautiously can protect you from financial loss and identity theft. If you're unsure about a tax message or need help managing your HMRC correspondence safely, [contact your Client Director](https://sg-accounting.co.uk/contact/) for expert, trusted tax support. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) **Categories:** limited company, New to contracting, News, Running your business **Tags:** Kerry Newman --- ### [What does a limited company accountant cost?](https://sg-accounting.co.uk/blog/what-does-a-limited-company-accountant-cost/) **Published:** December 18, 2018 **Author:** Kerry Newman **Content:** Being a director of a limited company, comes with additional responsibilities, like filing paperwork and accounts with Companies House and HMRC by specific dates. Failure to do so can lead to you to being penalised. Finding the time to stay on top of this, alongside working can be stressful. That’s why most contractors decide to build a relationship with an experienced [contractor accountant. ](https://sg-accounting.co.uk/) This article looks what you can expect to pay a contractor accountant and what this fee includes. ![Getting to know your accountant](https://sg-accounting.co.uk/wp-content/uploads/2018/02/free-tax-planning-copy.jpg "Accountant Talking | SG Accounting") ## **Accountant’s fees** To start with, there’s no set fee when it comes to working with a limited company accountant. Typically, contractor accountants charge on a monthly basis, and the fee will depend on what is included in the package. Our accounting packages start at £49+vat per month for sole traders, and £119+vat per month for limited companies. [Take a look at our packages](https://sg-accounting.co.uk/prices/) to see what’s included. When choosing an accountant, cost should be a factor, but it shouldn’t be the deciding factor. Our article, ‘How to choose a contractor accountant’ gives tips on what to consider when choosing an accountant to look after your limited company. ## **What is included in the monthly cost?** When choosing an [accounting package](https://sg-accounting.co.uk/prices/), you should ask if it includes the core services that are fundamental to ensuring your limited company is fulfilling its legal obligations. These core services include: - Completing your company’s annual accounts - Processing payroll for you and any other staff members - Submitting quarterly VAT returns (if you are VAT registered) - Managing any correspondence from Companies House Additional services you may be charged for include: - Administration of forming your limited company - Providing a registered office address – where all correspondence will be sent to - Preparation and submission of your personal tax return (Self-Assessment) - Submitting your company’s Confirmation Statement to Companies House - Costs that arise from taking on extra staff (e.g. payroll) - Completing tax returns for employees - Providing references for mortgage applications One area where it is important to check that the accountant has experience in is conducting IR35 reviews. An IR35 review will look at the details of your contract and your working practices to determine your IR35 status. If you take on a contract without an IR35 review and HMRC deem you are working inside IR35, you will be taxed at source as if you are an employee. ![Advisor helping out a client while sat in a booth in front of a laptop](https://sg-accounting.co.uk/wp-content/uploads/2018/05/advisor.jpg "advisor | SG Accounting") With over 20 years’ experience working with contractors, we understand how important expert IR35 advice is. We are pleased to say that all our monthly accounting packages include IR35 reviews and advice at no extra charge. ***If you’d like to find out further details on our monthly accounting packages or if you would like to chat with one of our Directors to see how our services can benefit your limited company, give us a call on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance, New to contracting **Tags:** New - Guide, New - Service --- ### [Director’s loans explained: The complete guide for limited company directors](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) **Published:** August 26, 2026 **Author:** Alex Gould **Content:** Director's Loans are still one of the most underused and misunderstood areas of running a limited company. Whether, as a limited company director you're navigating unexpected personal expenses, managing your cash flow, or just trying to remain compliant, it's essential to understand how Director's Loans work. In this guide we explore the rules, tax implications, risks and best practices, including real client experiences to help you remain on the right side of HMRC. ## Key Takeaways - All information relating to your Director's Loans must be recorded correctly in your Director's Loan Account (DLA) - If you don't repay the loan within nine months of your company's year-end you may trigger Section 455 tax (35.75%) - Loans which total a value of over £10,000 can become a Benefit in Kind (BiK), which will create further tax liabilities - HMRC closely monitors DLAs that become overdrawn, especially if it happens regularly or avoidance behaviour is detected ## Contents ## What is a Director's Loan? A Director's Loan is money you take out of your limited company which isn't in the form of a dividend, salary, or an expense repayment. Legally any company funds belong to the business, and therefore personal withdrawals must be recorded correctly within your Director's Loan Account. ## CASE STUDY: SG Accounting – client experience One SG Accounting client withdrew £8,000, believing it was their personal money, which wasn't correctly recorded. At year-end their Director's Loan account was overdrawn and triggered a Section 455 tax charge of 35.75%. With help from their SG Accounting Client Director, they were able to repay the loan using their available dividends before the ninth month deadline, which enabled them to avoid the tax bill entirely. This case highlights how early advice from your trusted accountant can prevent costly mistakes further on. ## How Director's Loan accounts work Your Director's Loan Account (DLA) works by recording all your non-salary, non-dividend transactions between yourself and your company. It can either show: - if your company owes you money (you've put personal funds in) - if you owe the company money (you've taken funds out) **Common entries include:** - Cash withdrawals - Company funds being used to pay personal expenses - The reimbursement of personal money that has been used for business purposes **Key points** - Avoid paying for your personal expenses with company money, as this can create messy accounts and potential future tax issues - Only pay for legitimate business expenses with your company's account - Document all personal withdrawals to avoid any scrutiny from HMRC ## Taking and repaying a Director's Loan There are specific procedures you need to follow when taking a Director's Loan. **Repayment deadline** Any loan taken during the company year, must be repaid within 9 months of the company year-end. This will ensure you avoid paying S455 tax. **Tax implications and Section 455** At the repayment deadline if your Director's Loan Account is overdrawn, HMRC will charge Section 455 tax at 35.75% on the outstanding balance. **For example:** You take a loan of £6,000 and don't repay it by the deadline – Section 455 tax is applied at 35.75% = £2,145 owed in additional tax. If you repay the loan, HMRC will refund you the S455 tax paid, but please be aware that this can take some time. You won't be eligible to request the refund until the filing deadline of the company year in which the repayment transaction falls. **Benefit in Kind (BiK) rules** Director's Loans can become BiKs if: - They exceed £10,000 - No interest is charged - If interest that is charged is below HMRC's official rate This will then trigger: - P11D reporting - Class 1A National Insurance - Personal Income Tax on the cash equivalent value Interest: If the loan exceeds £10,000 and is repaid to the company alongside interest at HMRC's official rate, this will remove the requirement to complete a P11D or pay the associated tax. ## FAQs ### [What will happen if I can’t repay my Director’s Loan? ](#c5f7f1957f81e83b2) If you’re unable to repay the loan, you have the option to declare a dividend to cover the amount taken, provided your company has the profit available to do this. Alternatively, you may look to make payments back to the limited company over a period of time to repay the loan. Once repaid, you will then be able to request a refund from HMRC for the S455 tax charge paid. ### [Are Director’s Loans always taxable? ](#589cd199ff0340336) No. For S455 tax at 35.75% – this won't be applied if the loan is repaid within 9 months of the company year-end (the filing deadline). For P11D reporting – Tax will only arise if the loan exceeds £10,000 or more at any point during the tax year. If this happens, the loan will need to be declared on the Director's P11D and tax paid. Alternatively, the Director can look to repay the loan to the business with interest applied (at HMRC's official rate) and this will then remove the requirement for the P11D to be completed. ### [Can my loan be reclassified as salary by HMRC? ](#b1b7c35c9b73089a3) Yes. If your DLA is overdrawn often, or is appearing to replace your salary, then HMRC can treat withdrawals as income, and as a result charge Income Tax and National Insurance. ### [What is bed and breakfasting? ](#284d31c0dce5b41c3) Bed and breakfasting is when a director repays a loan before tax-yearend to avoid the additional tax, then immediately takes the value back out of their company as another loan. HMRC restricts this behaviour, and any repayments made of £5,000 or more and subsequently taken out again within a 30-day period may be subject to full tax. ## Final thoughts Director's Loans are a useful tool for short-term cash flow needs, and it's reassuring to know they're there if needed, but it's important to remember they come with strict rules and significant tax implications. For example, funds withdrawn from the limited company as a Director's Loan may often result in withdrawing required funds needed to pay future tax bills from the limited company such as VAT, PAYE or Corporation Tax. Therefore, it's important to ensure that as a result you still have the necessary cash flow to pay the taxes as and when they become due. Before you withdraw any funds from your company, ensure you discuss your plans with your SG Accounting Client Director to make sure you're acting compliantly, and are therefore protected. If you're not yet an SG client and need personalised advice on Director's Loans, tax planning, or managing your Director's Loan Account, [get in touch](https://sg-accounting.co.uk/contact/) to find out how we can help you and your business thrive. Alex Gould Client Director Alex joined SG back in October 2017, and is ACCA partially qualified. Specialising in the complex needs of Limited Company contractors since joining SG, Alex enjoys overcoming the challenges his clients face on a daily basis, and aiding them in maximising their contractor take home pay. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/alex-goulds/) [LinkedIn](https://www.linkedin.com/in/alexander-gould-416248b5/) **Categories:** limited company, New to contracting, Running your business, Salary/dividends, Tax, VAT **Tags:** Alex Gould --- ### [Trivial Benefits](https://sg-accounting.co.uk/blog/trivial-benefits/) **Published:** May 12, 2025 **Author:** Kerry Newman **Content:** If you’re a limited company director, you may find there are times when you want to give a gift from your business to your employees (if you have any), or even to yourself. Based on the gift’s circumstances you may find that the cost isn’t classed as a taxable benefit. In this blog we take a closer look at Trivial Benefits to understand how they work, what you’re able to purchase, and how it works from a taxation point of view. ## What are Trivial Benefits? In a nutshell, a Trivial Benefit is a gift that is exempt from tax and National Insurance Contributions, which an employer of a close company can occasionally give to directors or employees. ## What is a Close Company? A Close Company is a UK Limited Company with 5 or fewer shareholders, or by any number of shareholders who are also directors. A Trivial Benefit must: - Be £50 or less per person. Please note, if you are a director of a limited company, you’re capped at £300 per tax year. This means you could take a maximum of 6 trivial benefits worth £50 each in one tax year - Not be in the form of cash or a cash voucher - Not be an ongoing cost, such as a gym membership - Not be given to an employee who would otherwise receive the benefit as part of their contractual obligation - Not be given as a reward or recognition for their professional achievement So long as the above criteria are adhered to, then the benefits will not be subject to tax and therefore you will not need to declare them on a [P11D form](https://www.gov.uk/guidance/how-to-complete-forms-p11d-and-p11db). ## Tax Relief on Trivial Benefits If the benefit you wish to give adheres to the above points then you will qualify for corporation tax relief on the [business expense](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) and will not be subject to personal tax. The same rule applies for VAT and therefore you will also be able to reclaim VAT on the expense if classed as a trivial benefit (provided you are not using the flat rate scheme for VAT). ## Examples of Trivial Benefits The following examples of Trivial Benefits are typically what you’re able to give: - A birthday gift for an employee, such as a bottle of wine or box of chocolates - A work anniversary gift, such as a restaurant voucher. Remember that the voucher cannot be a contractual perk - A Christmas gift, such as a hamper - A summer BBQ - A new baby or wedding gift So long as each benefit costs £50 or less and is non-contractual, it’s classed as a Trivial Benefit. ### The following examples are **not** classed as Trivial Benefits: - Cash or cash equivalents (such as a £50 note) - Gift cards which you’re able to exchange for cash - Any benefit that costs more than £50 (even by 1p!) - Regular or contractual perks (such as a weekly takeaway) - Childcare costs - Any bonuses given - Company cars - Health insurance, travel and entertainment expenses ## Trivial Benefits – final thoughts from SG Trivial Benefits are a simple, tax-efficient way to reward your team — but only if used correctly. If you’re unsure about what qualifies or how to apply the rules for directors or employees, we’re here to help. Your SG Accounting Client Director specialises in helping businesses stay compliant while making the most of available allowances and incentives. [Get in touch today](https://sg-accounting.co.uk/contact/) for personalised advice or to chat about how we can support your employee benefits strategy. **Categories:** Running your business, Tax **Tags:** Kerry Newman --- ### [Can you claim your holiday party as a business expense?](https://sg-accounting.co.uk/blog/can-you-claim-your-holiday-party-as-a-business-expense/) **Published:** November 9, 2023 **Author:** Jen Winslow **Content:** As the festive season approaches, many Limited Company directors are gearing up for their annual company party. The good news is that HMRC is quite accommodating of these kinds of events, as they consider staff entertainment to be a legitimate business expense. There are, however, a few rules you need to follow for you to be able to claim your event. **Understanding the Rules** You must ensure your event meets the following criteria for it to be considered a legitimate business expense for Tax and National Insurance exemption: 1. The total cost of the event is under £150 per person, per year, including additional expenses such as accommodation or travel 2. The event is open to all employees 3. The event occurs annually 4. The value of the event is reported to any employees on a salary sacrifice scheme Keep in mind that the same rules apply whether your event is in-person or virtual. **Is there a limit on the number of employees that can attend?** Whether you’re on your own or have many employees working for you, so long as you follow the above conditions, you can still claim for your event. There is no limit to the number of employees that can attend and invitations can even be offered to family members of staff. Just remember that they need to follow the £150 limit too. **Remember, this is an exemption, not an allowance!** It’s vital to keep in mind that exceeding the £150 per person limit, even by a small amount, will render the event no longer exempt from Tax and National Insurance. To prevent this, you can calculate the cost of your event in advance: 1. Total up all the associated expenses. 2. Divide this total by the number of employees in your company. If you host multiple events throughout the year, you must not forget that the £150 limit applies to the entire year, not per event. For more comprehensive information on staff events, you can refer to the [gov.uk](https://www.gov.uk/expenses-benefits-social-functions-parties/whats-exempt#:~:text=You%20might%20not%20have%20to,Christmas%20party%20or%20summer%20barbecue) website. **How SG Accounting can assist you** While you’re enjoying your party, we can help you stay compliant. As expert accountants, we can guide you through the complicated rules and regulations and maximise your take home pay. To see how we could support you, [get in touch](https://sg-accounting.co.uk/contact/) with a member of our team today. **Categories:** Expenses, limited company --- ### [VAT schemes – which one is right for you?](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/) **Published:** August 18, 2025 **Author:** Alex Gould **Content:** If your limited company is approaching the VAT registration threshold, or you are already VAT registered, ensuring you choose the correct VAT scheme for your business is more than just a compliance task. By having the correct scheme you can improve your cash flow, reduce admin, and even lower your VAT bill. In this blog we explore the main VAT schemes available, who they are best suited to, and how to decide which one is the right choice for your business. ## Standard VAT Accounting Scheme Under the standard scheme, you account for VAT on your invoices at the point of issue and reclaim the VAT on purchases when you receive invoices from your suppliers. **Who is it for:** The Standard VAT accounting scheme is best for companies with high input VAT to reclaim, and companies which issue invoices regularly and have reliable bookkeeping. **What are the pros:** It allows for the full VAT recovery on eligible purchases and matches up well with accrual-based accounting. **What are the cons:** It can lead to cash flow pressure, as you may end up paying VAT before your client pays you. ## Cash Accounting Scheme You only pay VAT to HMRC when your client pays you, and you are only able to reclaim VAT on purchases when you pay your suppliers. **Who is it for:** Those who have delayed invoice payments, and companies that have lower input VAT or minimal stock. **What are the pros:** It improves cashflow and there is less risk of paying VAT on unpaid invoices. **What are the cons:** It can’t be used if your VAT-taxable turnover exceeds £1.35million. ## Flat Rate Scheme (FRS) Instead of calculating VAT for each individual sale and purchase, you pay a fixed percentage of your gross turnover to HMRC. The percentage you pay depends on your business type. **Who is it for:** Freelancers, contractors or service-based businesses with low expenses, and small businesses with an annual taxable turnover of £150,000 or less. Once you’re on the FRS scheme, you can remain on this unless your turnover is going to exceed £230K. **What are the pros:** It allows for simplified VAT reporting, and provides the potential to save money, especially in your first year of VAT registration, where you will receive a 1% discount. **What are the cons:** You can’t reclaim VAT on most purchases, and if you buy a lot of equipment or stock, it may not be cost-effective. You can, however, reclaim VAT on certain capital assets, provided they are £2,000 or more. ## Annual Accounting Scheme You submit one annual VAT return, instead of quarterly. Payments are made in advance either monthly or quarterly, based on your estimated VAT liability. **Who is it for:** Stable businesses that want to reduce their admin, and those that prefer predictable cash flow. **What are the pros:** There’s less paperwork and better budgeting with regular payments. **What are the cons:** It can result in over or underpayments, if income varies significantly and if you regularly reclaim VAT, the scheme won’t suit you as you will only be able to receive 1 refund a year. ## VAT Margin Scheme Is a scheme used solely by those businesses which sell second-hand goods, antiques or art. You pay VAT on the difference between what you paid and what you sold the item for, not the full sale price. **Who is it for:** **What are the pros:** It reduces VAT liability on resale items and is useful for low-margin reselling businesses. **What are the cons:** It requires complex record-keeping, and you’re not able to reclaim VAT on purchases covered by the margin scheme. ## Which of the VAT Schemes is the right one for you? It depends on your business model, your turnover, [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/), and how you manage your cash flow. Here are some simple guidelines: **Business Type Recommended Scheme** **Freelancer/contractor** Flat Rate Scheme (if your expenses are low) **Retail/stock-based business** Standard or Margin Scheme **Growing Small Business** Cash Accounting or Annual Accounting **Established limited company** Standard Scheme ## How your Client Director can help you Choosing the incorrect VAT Scheme can cost you hundreds if not thousands over time. If you’re new to running a limited company, your Client Director will provide you with personalised advice based on your circumstances as to which scheme is best for you. As your business grows or if you’re switching over to us from another accountancy, your Client Director will review your scheme based on your business’ finances, industry and growth plans, and make suggestions complimenting your business’ success. As always, they are here to offer you tailored advice, to help you make the most of your business. [Get in touch with them directly today.](https://sg-accounting.co.uk/contact/) **Categories:** New to contracting, Running your business, Tax, VAT **Tags:** Alex Gould --- ### [5 Mistakes People Make When Doing Their Own VAT Return](https://sg-accounting.co.uk/blog/5-mistakes-doing-own-vat-return/) **Published:** January 18, 2018 **Author:** Kerry Newman **Content:** Completing your VAT Return can be a stressful task if you leave it to the last minute, or don’t keep proper records of your income and expenses. Here at [SG Accounting](https://sg-accounting.co.uk/about-sg-accounting/), we have seen many VAT Returns, and here are the common mistakes made by clients when submitting their own VAT Returns: ## **1. Box 6 figure for Flat Rate Scheme companies** If your company is registered for the Flat Rate Scheme, the box 6 figure on your VAT Return should be the gross sales for the period. You charge VAT at 20% of your net sales, but your Flat Rate Percentage is applied to your gross sales, and therefore this is the figure that should be included on your VAT Return. ## **2. Nil VAT Returns must be filed if there is no trading activity** It is a common misconception that if you do not trade in a period then your company does not need to submit a VAT Return as the liability would be nil. As your company is VAT registered, you must file a VAT Return, reporting to HMRC that no sales were made and therefore no VAT is due. If you are using Standard Rate rules for VAT, there may be some VAT reclaimable, creating a refund from HMRC for the quarter. Likewise, if you are on the Flat Rate Scheme and have a single purchase of capital expenditure goods costing £2,000 or more (VAT inclusive), the input VAT may still be able to be reclaimed. ## **3. Box 4 figure entered by mistake when using the Flat Rate Scheme** If you are on the Flat Rate Scheme and do not have a single purchase of capital expenditure goods costing £2,000 or more inclusive of VAT, then your box 4 figure will be nil. However, it is a very easy mistake to accidentally include a figure in box 4, meaning you will have to write to HMRC to amend the Return. ## **4. Your Flat Rate Percentage** If your company is registered for the Flat Rate Scheme, since April 2017 when the new rules regarding ‘**limited cost businesses’** came into play from HMRC, it can be confusing as to the correct percentage that needs to be applied – even more so if you are still in your 1% discount period. However HMRC have provided a calculator that’s simple to use online so that you know if you are caught by this ([Click here to use the calculator](https://www.tax.service.gov.uk/check-your-vat-flat-rate/vat-return-period)). If you are in your 1% discount period and a limited cost business, a percentage of 15.5% would be applied. **[Expenses](https://sg-accounting.co.uk/guides/expenses-guide/) that are** **re-charged** to your client are treated as vatable income and should be included on your VAT Return. This means that an invoice must be raised for these transactions and recorded on your accounting spreadsheet. [If you have queries about submitting your VAT Return, or would like us to submit it on your behalf, please do not hesitate to contact us.](https://sg-accounting.co.uk/contact/) If you’d like to see our prices, [click here](https://sg-accounting.co.uk/prices/). **Categories:** New to contracting, Tax --- ### [The tax benefits of making pension contributions through your Limited Company](https://sg-accounting.co.uk/blog/the-tax-benefits-of-making-pension-contributions-through-your-limited-company/) **Published:** August 18, 2025 **Author:** Frances Bridge **Content:** If you’re busy running your own Limited Company, you’ll no doubt be on the lookout for ways in which you’re able to make smart, tax-efficient savings for your future. One of the most powerful ways of doing so is by making pension contributions directly from your company. Your Client Director is here to assist you in making informed decisions based on your take home needs, whilst building long-term financial security. In this blog we take a closer look at pensions, explain how they work, and the tax advantages they’re able to provide to limited company directors. ## 1.Company contributions are treated as business expenses When your limited company makes a direct pension contribution (known as an employers contribution), it’s classed as an [allowable business expense](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/). This means that the payment is allowed to be deducted from your Limited Company’s profits prior to the calculation of Corporation Tax. **For example:** If your Limited Company earns \*£60,000 profit and makes a £10,000 pension contribution, you’ll only be liable to pay Corporation Tax on the remaining £50,000. Corporation Tax is currently 19-25% for the 2025/26 tax year (depending on your profit level). Therefore the contribution could provide you with a maximum saving of £2,500. ## 2.There are no employer or employee NICs on pension contributions Unlike bonuses or salaries, the pension contributions your company makes are not subject to National Insurance Contributions (NICs), for either the employer or employee. So: - No 15% Employer NIC - No 8%+ Employee NIC This means that you’re able to extract money from your company more efficiently than by paying yourself via additional salary or dividends, which are subject to income tax and dividend tax respectively. ## 3.Pension contributions are not taxed as personal income So long as you stay within your personal allowance of £60,000 per tax year (as of the 2025/26 tax year), you personally won’t pay any tax on it (depending on your income). This is in contrast to: **Salary –** which is subject to Income Tax and NICs **Dividends –** which attract dividend tax By using your company to contribute to your pension, you’re effectively moving your company’s profits into your personal pension tax-free. ## 4. You’re building a tax-efficient retirement fund Money grows in your pension tax-free, meaning that there’s no Capital Gains Tax or Income Tax on investment returns within the pension. Once you reach the minimum pension access age (currently 55, rising to 57 in 2028), you’re able to start withdrawing: - 25% tax-free lump sum - The remaining 75% taxed as income (at your applicable tax rate at the time) This creates a long-term tax planning opportunity, especially if you’re expecting to be in a lower tax bracket during your retirement. ## 5. It reduces your company’s Corporation Tax bill In summary, pension contributions through your Limited Company: - Reduces your company’s taxable profit - Lowers your Corporation Tax bill - Are not subject to National Insurance - Do not count as personal income for tax purposes ## Key considerations before making pension contributions - Ensure you use a registered pension scheme, such as SIPP or SSAS - Make sure that contributions are ‘wholly and exclusively’ for business purposes (this is a HMRC requirement) - Make your pension provider aware that you would like to make an ’employer’ pension contribution - Be mindful of the annual allowance – contributions above this may incur additional tax - Make regular contributions or one-off lump sums depending on cashflow - Speak to a financial adviser for expert pension and investment guidance ## How your Client Director can help We make tax-efficient retirement planning simple for our clients, and your Client Director can: - Review your company’s profitability and cash flow - Give advice on how much you’re able to contribute - Ensure you remain compliant with HMRC - Suggest a financial adviser that can provide you with expert tailored pension advice Are you ready to optimise your pension contributions and reduce your tax bill? [Get in touch with your Client Director](https://sg-accounting.co.uk/contact/) to build a smart financial future for both you and your company. \*If you have personal income of £260k+ or withdrawing down a pension, this limit may be reduced. **Categories:** New to contracting, Pensions, Running your business, Tax **Tags:** Frances Bridge --- ### [Directors Loan: 5 things you should know](https://sg-accounting.co.uk/blog/directors-loan-5-things-you-should-know/) **Published:** February 5, 2019 **Author:** Kerry Newman **Content:** It’s not a well-known fact, but it is possible to loan money from your limited company. This is referred to as a Directors Loan, and it is defined as “money which is taken out of a limited company which isn’t a salary, dividend or expense repayment.” Some individuals may prefer to borrow money from their ltd company than taking out a loan from a bank or spending money on a credit card. However, you could end up with a big tax bill if you don’t understand how a Directors Loan works. ## Here are 5 things we feel you need to know before taking a Directors Loan: ### 1. Only directors can take out a loan It may seem obvious, but only a director of the limited company is entitled to take out a loan from the company. An employee can take out a loan from their employer although similar rules it would be classified differently. ### 2. Big brother is watching you HMRC- the gate-keeper of all things tax related, keeps an eye on everybody who takes out a Directors Loan. They’re able to do this as they can see it on your annual company’s return. ![HMRC is can keep track of your accounts.](https://sg-accounting.co.uk/wp-content/uploads/2019/02/Bigbrotheriswatching.jpg "Bigbrotheriswatching | SG Accounting") It’s therefore vital that your Directors Loan Account is accurate and that you keep up to date records which details: \* Cash withdraws and repayments you make \* Any personal expenses paid with company money or on a company credit card \* Interest added to the loan ### 3. You can use the money for anything you like There are no restrictions on what you can use the loan for. It could be that you’ve personally had an expensive couple of months and you need the money to cover credit card repayments. You may need to purchase an expensive piece of equipment. Or, it could be that you need the money to start a new business. ### 4. To avoid paying tax repay the loan on time The rules state that you have to pay back the loan within nine months of your company’s year-end in order to avoid paying tax on it. Therefore, timing is key. For instance, if you take out the loan on the first day of your company’s accounting year, you effectively have 21 months to pay it back! ![Calendar showing date of due payment of directors loan.](https://sg-accounting.co.uk/wp-content/uploads/2018/11/Calendar.jpg "Calendar | SG Accounting") ### 5. Complex tax rules exist for Directors Loans If you pay tax on a Directors Loan depends on when you pay back the loan. If you fail to pay it back within nine months of the company’s year-end it will be classed as an overdrawn directors account and Corporation Tax at 32.5% will be due. This is ultimately refunded by HMRC if the loan is repaid in the future though. Be careful as it’s going to take at least a year to get it back though. Additionally, unpaid loans are seen as a company asset, and if the company goes ‘bust’ the liquidator may pursue you for any monies outstanding from the loan. If the loan is over £10,000 it will be treated as a ‘benefit in kind’ which then has to be recorded on the form P11D. The company must also pay Class 1A National Insurance at the rate of 13.8%. We always advise the contractors we work with to approach Directors Loans with caution. Whilst, they can be used to help you out in times when it’s not possible to take a salary or dividend from the company, you could end up with a hefty bill if it’s not paid back on time. If you interested in finding out further details on Directors Loans, speak to us on 01962 867550 or send us a message via our website. **Categories:** Finance --- ### [Everything you need to know about Director’s Loan](https://sg-accounting.co.uk/blog/everything-you-need-to-know-about-directors-loan/) **Published:** December 2, 2019 **Author:** Kerry Newman **Content:** Being a director of a limited company comes with lots of responsibilities. One aspect of the role, which sometimes gets played down, is understanding the myriad of complex rules and legislation that come with running a limited company. A Director’s Loan is one of these complicated pieces of legislation that director’s need to be familiar with. Don’t panic if you don’t know much about it, as this guide goes into great depth and looks at what a director’s loan is, discusses the guidelines you need to follow and covers the tax obligations of a director’s loan. ![Business man with suit and tie.](https://sg-accounting.co.uk/wp-content/uploads/2019/12/BusinessMan.jpg "BusinessMan | SG Accounting") ## **Director’s Loan explained** One of the advantages of a limited company is your personal liability is limited. But on the flipside, any money that is held within the company belongs to it and not you personally. This is something that can easily be overlooked, but it can have serious consequences for you as a director if you take money out of the company without following the correct procedures. HMRC defines a Director’s Loan as “*money that is taken from the company that isn’t either a salary, dividend or expense repayment, or money that you’ve previously paid into or loaned the company.*” In summary, any money that is taken out of the company for any reason other than what has been explained, must be recorded in your personal director’s loan account. ## **Who can take a Director’s Loan?** The clues in the name, only a director can take a Director’s Loan. For clarification, a director is someone who manages the day-to-day activities, including operational, financial and administrative, of the company. A director is appointed by the company’s shareholders and in small limited companies, the shareholder and director may be the same person. It’s a legal requirement that UK limited companies have one director, and that person must be over 16 years and must not be disqualified from being a director. The director doesn’t have to reside in the UK, but the company must have a UK registered address. ## **Why take a Director’s Loan?** There may be times when you need extra money, such as having to pay for unexpected repairs to your property. Whatever, the reason, any money that you take out of the company which isn’t a salary, dividend or expense repayment is classed as a Director’s Loan and must be recorded in your personal Director’s Loan Account (DLA). At the end, you may either owe the company money or it will owe you money. Either way, you must record this as an asset or liability on the balance sheet section of your company’s annual accounts. ## **What is a Director’s Loan Account?** A Director’s Loan Account is a record of transactions (asides salary and dividends) between the company and its directors. Two transactions are typically recorded on a Director’s Loan Account, these are; 1. Cash withdraws from the company 2. Personal expenses that are paid for using company money or credit card We get a lot of questions about expenses. As a rule, a legitimate business expense is deemed by HMRC as, “*being incurred wholly, exclusively and necessarily for the running of the business.*” If it has a dual purpose i.e. has a personal use as well as business use, it’ll be classed as a personal expense. Examples of allowable business expenses include; accounting or bank fees, marketing and advertising costs, insurance costs and rent. Our [**Expenses Guide**](https://sg-accounting.co.uk/guides/expenses-guide/) has a full list of allowable business expenses. To avoid confusion and to stop your company’s accounts from becoming ‘messy’ we strongly advise against paying for personal expenses with the company’s money. ## **How to take a Director’s Loan** Taking a Director’s Loan is not as straightforward as withdrawing money from the company’s account. Firstly, you need approval from the company shareholders, particularly if the loan is over £10,000. If you’re the only shareholder, getting approval is fairly easy. A copy of this approval must be kept in writing. ![Man signing directors loans agreement.](https://sg-accounting.co.uk/wp-content/uploads/2019/12/Signingacontract.jpg "Signingacontract | SG Accounting") ## **When to repay a Director’s Loan** HMRC rules state that loans must be repaid within nine months of your company’s year-end (the date your company’s accounting period ends) otherwise you’ll pay additional tax. ## **Are Director’s Loans taxable?** This is the most frequently asked question about Director’s Loans. The answer unsurprisingly isn’t straight forward. If tax is due on the loan, depends on when the loan is repaid. If you repay the entire loan within nine months and one day of your company’s year-end, no tax is owed. If your Director’s Loan Account is overdrawn on this date, additional Corporation Tax of 32.5% is owed – it’s referred to as Corporation Tax, but it’s actually called Section 455 CTA Tax. Example: Say you borrowed £6,000 on 11th May 2019 and your company’s year-end is 31st October 2019. You’ll have until 1st August 2020 to repay the loan. If you don’t it, you may have to pay 32.5% of £6,000 = £1,950 in addition to your Corporation Tax. If you pay off some of the loan within the nine months and 1-day threshold, you’ll pay tax at 32.5% on the outstanding amount e.g. £3,000 x 32.5% = £975. There’s good news though, as the tax charge is repaid to you by HMRC, once you clear the full amount of the loan. ## **How to repay the loan** The easiest way to repay a Director’s Loan is to use a dividend payment or salary to move the money back into the company’s bank account. ## **What if I can’t repay the loan?** ![Question Mark](https://sg-accounting.co.uk/wp-content/uploads/2019/11/questionemark.jpg "questionemark | SG Accounting") We’re sure you intend to repay the loan; however, life isn’t straightforward, and you may find yourself in a situation where you don’t have the funds to repay it. For instance, a contract may suddenly end, or your next contract gets pushed back, leaving you with a shortfall in your finances. The ideal scenario is that you have enough money in the company’s bank account to clear the loan by taking a dividend that is equivalent to the loan amount. This will deem the loan to be a dividend under the Income Tax (Trading and Other Income) Act 2005. However, if by failing to repay the loan and placing the company in financial difficulties that it has to be liquidated, the liquidator can chase you for repayment. In extreme cases, you could up in court or even be made bankrupt. Being declared bankrupt has serious consequences, for example, you can be prevented from being a director of another limited company, you can’t start or manage another company without the consent of the court and you’re prevented from a taking a loan over £500 without informing the lender of your bankruptcy. ## **Bed and Breakfasting** ‘Bed and Breakfasting’ is a term referred to describe a situation that aims to avoid paying tax on a Director’s Loan. Bed and Breakfasting is said to occur when a director repays the loan in full before their year-end to avoid penalties, to then immediately take another loan, with the intention never repaying it. HMRC has implemented a measure to prevent this; when a loan over £10,000 is repaid by the director, no other loans in excess of £10,000 can be taken within 30 days. If this happens, the entire loan will be taxed. It’s important to point out that loans that are taken outside of the 30 days may still be taxed, particularly if it’s in excess of £15,000: The rules state that if a director takes a loan that is over £15,000, and before any repayment is made there is an intention by the director to take out a future loan over £5,000 that isn’t matched to another repayment, the Bed and Breakfast rules will apply. The rules surrounding Bed and Breakfast are very complex and we advise you to seek advice from an accountant. ## **Is a Director’s Loan a Benefit in Kind?** Benefits in Kind sometimes referred to as ‘perks’, are benefits you receive from the company that isn’t included in your salary or wage. It could be a service you use personally but which the company pays for. HMRC levy a tax on Benefits in Kind to prevent them from replacing your salary. HMRC will deem a Director’s Loan to be a Benefit in Kind if: 1. The loan exceeds £10,000 at any time 2. You’re not paying interest on the loan 3. The interest you’re paying is below HMRC’s average beneficial loan rate If the loan meets any of the criteria set out above, it’ll be classed as a Benefit in Kind and you’ll be required to include it on a P11D. If the loan is under £10,000 and no interest is charged this is not a benefit. You’re also required to include the loan’s cash value equivalent on your personal self-assessment tax return. ![Rent a room scheme - could you benefit?](https://sg-accounting.co.uk/wp-content/uploads/2019/10/rolledupfivepoundnote.jpg "rolledupfivepoundnote | SG Accounting") To calculate the cash value equivalent, you’ll have to refer HMRC’s list of [**official rates.**](https://www.gov.uk/government/publications/rates-and-allowances-beneficial-loan-arrangements-hmrc-official-rates/beneficial-loan-arrangements-hmrc-official-rates) As an example, say you took out a loan of £6,000 in May 2019, the cash value equivalent will be £150. Your limited company would pay Class 1A National Insurance on the loan’s cash value equivalent, £150 x 13.8% = £20.70. You as a director of the limited company would also pay Income Tax on the cash value equivalent. The amount depends on which tax band you fall into. If you a basic tax rate payer, you’d pay £30 (£150 x 20%). To avoid paying these charges, we recommend paying interest on the loan at the same rate (or higher) to HMRC’s average beneficial loan rate. ## **Does HMRC monitor Director’s Loans?** Yes, they do! In fact, they pay close attention to accounts that are regularly overdrawn. If they make the decision that your loan is, in fact, a salary, they’ll charge Income Tax and National Insurance on the amount. Our advice is to monitor your account closely to ensure your withdrawals don’t go over £10,000. ## **Should I take out a Director’s Loan?** Taking a Director’s Loan can be handy in certain circumstances, such as if you experience unexpected expenses. However, you should plan on paying it off as soon as possible to avoid the S455 tax charge. If you find you’re struggling to repay the loan, you should consider repaying it using a dividend payment (only if the company’s profits allow it) – as a side note, personal tax charges may apply to the dividend payment. In summary, before considering a Director’s loan, seek professional advice from an experienced accountant because as you see, there are lots to consider. **If after reading this comprehensive guide, you have any further questions please get in touch with us on 01962 867550 or send us a message via our [website](https://sg-accounting.co.uk/contact/).** **Categories:** Tax **Tags:** Switching - Service --- ### [How do dividends and salary work for Limited Company directors?](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) **Published:** May 21, 2026 **Author:** Frances Bridge **Content:** When [running a limited company](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/), understanding how to pay yourself is key to working tax-efficiently and staying compliant with HMRC. Balancing salary and dividends correctly can help you optimise your take-home pay while ensuring your company meets all its legal obligations. This article explains how salary and dividends differ, how dividends are taxed, what to watch out for with Director’s Loan Accounts, and the importance of careful planning for Corporation and personal tax. ## Key takeaways - Salary and dividends are taxed differently – understanding both helps improve tax efficiency - Dividends can only be paid from available profits and must be properly documented - Keep your Director's Loan Account balanced to avoid additional tax charges - Always plan ahead for Corporation Tax and personal self-assessment payments - Seek tailored advice from your accountant before withdrawing funds from your company Sorry, your browser doesn't support embedded videos. ## Contents ## Salary vs Dividends – What’s the Difference? ### Salary A salary is employment income, meaning it's subject to Income Tax and National Insurance Contributions (NICs). It can be paid even if your company hasn't made a profit and can count toward your state pension and statutory benefits. However, because salaries attract both employer and employee NICs, many limited company directors review their salary levels each year with their accountant to ensure they're paid efficiently. ### Dividends Dividends are payments made to shareholders from post-tax company profits. They're not subject to NICs and are generally taxed at lower rates than salaries, making them an attractive way to distribute profits. To remain compliant: - Only pay dividends if your company has sufficient retained profit - Record all dividend declarations via board minutes - Provide dividend vouchers to all shareholders (most accounting software can generate these automatically) Dividends taken when there are not sufficient profits in the company are considered illegal dividends and may be reclassified as a director's loan or disguised salary by HMRC. This could result in additional tax or penalties. ## Dividend Tax Bands and Allowances (2026/27) Here are the current dividend tax thresholds for the 2026/27 tax year: | **Band** | **Income Range** | **Tax Rate on Dividends** | |---|---|---| | Dividend Allowance | First £500 | 0% | | Basic Rate | Up to £50,270 | 10.75% | | Higher Rate | £50,271 – £125,140 | 35.75% | | Additional Rate | Over £125,140 | 39.35% | Important details: - Dividend tax is calculated based on the date of declaration, not the date of payment. - For example, a dividend declared on 1st April 2027 but paid on 7th April 2027 counts toward the 2026/27 tax year - Tax on dividends must be paid via self-assessment by 31st January following the end of the tax year - If your first self-assessment tax bill exceeds £1,000, Payments on Account may apply, requiring advance payments toward the next tax year's liability - Dividends are taxed after all other forms of income. This means that income from sources such as employment, rental properties, or pensions will first use up your basic rate band, with any dividend income then taxed at the applicable dividend tax rates within the remaining tax bands ## Director’s loan accounts and common mistakes ### What Is a Director's Loan Account (DLA)? A DLA records any transactions between you and your company that are not salary, dividends, or reimbursed expenses. If you withdraw funds beyond what your company owes you, the account becomes overdrawn, meaning the company is effectively lending you money. ### Common mistakes to avoid - Declaring dividends without profits – leads to an illegal dividend - Poor documentation – failing to create minutes and dividend vouchers - Mixing withdrawals – confusing DLAs with dividends or reimbursed expenses - Ignoring repayment deadlines – not clearing an overdrawn DLA within 9 months of the company's year-end can trigger a Section 455 tax charge (currently 35.75%) ## Planning for corporation tax and personal tax bills ### Corporation Tax Dividends are paid from post-tax profits, meaning your company must pay Corporation Tax (currently between 19% and 25%, depending on profit level) before dividends can be distributed. ### Personal Tax Because dividends are paid gross (with no tax withheld), each shareholder must: - Calculate their own dividend tax liability - Ensure you’re setting enough money aside personally to cover the tax payable, as this is a personal tax - Pay through self-assessment by 31st January following the tax year end ### Avoiding cash flow shocks Tax bills, especially the first one, can catch [new limited company directors](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) off guard. To prevent this: - Set up a separate business savings account for corporation tax and a personal savings account to set aside the personal tax payable on dividends withdrawn - Regularly review company performance and retained profits before declaring dividends - Speak to your accountant to plan dividend timing effectively ## FAQs ### [What is the most tax-efficient salary for 2026/27? ](#ae96a718c68ba2e62) This depends on your situation, but many directors choose a salary up to the Employee's National Insurance threshold (£12,570 for most people). This helps reduce National Insurance costs while keeping your entitlement to state benefits. It's best to discuss your circumstances with you accountant to determine what's right for you. ### [Can I pay myself a dividend if my company hasn’t made a profit? ](#f3b058536b33d3983) No. Dividends can only be paid from retained profits after Corporation Tax. If you take a dividend without enough profit, HMRC may treat it as a director’s loan or disguised salary, which could lead to extra tax or penalties. ### [How much tax will I pay on dividends in 2026/27?](#3985e2fa815a7a04b) For the 2026/27 tax year, the dividend allowance is £500. After that, dividend tax rates are: - 10.75% for basic rate taxpayers - 35.75% for higher rate taxpayers - 39.35% for additional rate taxpayers Remember, the tax is based on the date the dividend is declared, not when it's paid. ### [What happens if my Director’s Loan Account is overdrawn? ](#2c7cf4f69848e6297) If you owe money to your company and don’t repay it within nine months of the year-end (the filing deadline), a Section 455 tax charge of 35.75% may apply. You can reclaim this tax if the loan is repaid within 4 years, but it’s better to avoid letting the account go overdrawn. ### [Do I need to file a self-assessment tax return if I only take dividends? ](#8a407ced8a5ca65ea) Yes. Dividend income must be reported on your self-assessment tax return. You'll need to pay any personal tax due by 31st January after the end of the tax year. ### [Can I pay myself dividends monthly instead of once a year? ](#38686b3c5993c5dc6) Yes. You can take dividends as often as you like, as long as your company has enough post-tax profits. Many directors choose to pay themselves monthly or quarterly to keep their income steady. ## ## Final thoughts Each director's circumstances are different. The right balance of salary and dividends will depend on your company's profits, your personal tax position, and your long-term financial goals. Before taking money out of your limited company, check that you are following HMRC's rules and setting aside enough for future tax payments. If you're ever unsure, speak with your Client Director. And if you're not yet an SG client, [get in touch today!](https://sg-accounting.co.uk/contact/) Frances Bridge Client Director Frances joined us in February 2024, and is part ACCA qualified. Since becoming an accountant in 2012, she particularly enjoys building relationships with her clients, and helping them make the most of their finances. In her spare time she enjoys travelling the world and spending time with her son George. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/frances-bridge/) [LinkedIn](https://www.linkedin.com/in/frances-bridge-b5654ba/) **Categories:** Expenses, limited company, New to contracting, News, Running your business, Salary/dividends, Tax, VAT **Tags:** Frances Bridge --- ### [What Responsibilities Do You Have as a Limited Company Director?](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** If you’ve decided on a limited company as the best business model for you, and want to know more about what that means in terms of your directorial responsibilities, then this article is for you. As a [limited company director](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/), you’re not just running a business; you’re responsible for keeping it compliant with both HM Revenue & Customs (HMRC) and Companies House throughout the year. That means submitting key documents on time, paying the right taxes, keeping detailed records, and ensuring your company meets its statutory obligations. This guide walks you through the key responsibilities of a limited company director, explains the most important filing deadlines, and shows how working with a specialist accountant can make compliance simple and stress-free. ## ## Key Takeaways - Company directors are legally responsible for keeping their business compliant with HMRC and Companies House requirements - Submitting annual accounts, tax returns, and confirmation statements on time avoids getting penalties and protects your company’s reputation - Good record keeping is essential for compliance and should cover financial transactions, payroll, and company registers for at least six years - An accountant can manage filings, advise on tax efficiency, and help keep your company compliant throughout the year using digital tools Sorry, your browser doesn't support embedded videos. ## Contents ## Key Responsibilities as a Limited Company Director Being a director isn’t just about making strategic decisions – it’s also about ensuring your business complies with the law. Below are the main areas directors needs to keep in mind. ### Filing Annual Accounts Each year, your company must prepare and submit a set of annual accounts (also called statutory accounts) to Companies House. These accounts include: - A balance sheet showing the company’s financial position - A profit and loss statement summarising income and expenses - A director’s report and auditor’s report may also be required, (for larger companies) - Other important financial activities Annual accounts are due nine months after the end of your financial year. For example, if your year ends on 31 December 2026, your accounts must be filed by 30 September 2027. Filing late will trigger automatic penalties from Companies House, so it’s important you stay on top of your bookkeeping. ## Corporation Tax Return (CT600) Every limited company must also submit a Corporation Tax Return (form CT600) to HMRC each financial year. This document reports the company’s profits, [allowable expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/), and tax due. You’ll need to: - File your CT600 within 12 months of your company’s accounting period end - Pay Corporation Tax within 9 months and 1 day after your accounting period end These two dates are often confused so make a note of them, so you don’t miss the deadlines! HMRC will issue late filing penalties and interest on unpaid tax. With the help of a good accountant, you can ensure your tax return includes all eligible deductions and allowances, avoid costly errors, and potentially reduce your overall bill. ## Confirmation Statement Each year, your company must file a confirmation statement (which used to be known as the annual return) with Companies House. This statement verifies that your company details are correct, including: - Registered office address - Company directors and secretaries - Shareholders and share capital - People with significant control (PSCs) You must file this at least once every 12 months. You can submit it early if there are any major changes to your company details but make sure there’s never more than a year between filings. Filing also ensures your company record stays accurate and publicly up to date which is especially important if you’re applying for finance or dealing with clients who may review your company details. ## PAYE and Payroll Obligations If your company pays any salary (even if only to yourself as the director) you need to operate PAYE (Pay As You Earn) through HMRC. Under PAYE, you must: - Register as an employer. - Deduct Income Tax and National Insurance from wages. - Submit Real Time Information (RTI) reports each time you pay employees or yourself. - Pay HMRC the total owed for tax and NI contributions. Again, late or incorrect RTI submissions can trigger automatic fines. Most accountants will handle payroll setup and monthly submissions for you, ensuring compliance and accurate record-keeping. ## VAT Responsibilities (If Registered) If your business turnover exceeds the VAT threshold of £90,000, you must register for [Value Added Tax](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you) (VAT). Once registered, you’re responsible for: - Charging VAT on sales (output tax) - Claiming back VAT on purchases (input tax) - Submitting VAT returns quarterly via Making Tax Digital (MTD) software - Paying any VAT owed to HMRC by the due date Even if your turnover is below the threshold, you can still voluntarily register for VAT. This will give your business more credibility and can sometimes improve your cash flow – your accountant can advise on what’s best for your situation. ## Important Filing Deadlines with HMRC and Companies House Filing all the correct documents on time is one of the most important responsibilities you have as a director. Here’s a quick reference guide: | **Filing Type** | **Submitted To** | **Deadline** | |:--|:--|:--| | Annual Accounts | Companies House | 9 months after financial year end | | Corporation Tax Payment | HMRC | 9 months + 1 day after year end | | Corporation Tax Return (CT600) | HMRC | 12 months after year end | | Confirmation Statement | Companies House | Every 12 months | | PAYE / RTI Returns | HMRC | On or before each payday | | VAT Returns (if registered) | HMRC | Every quarter (1 month + 7 days after VAT period end) | ### Top Tips for Staying Compliant - Set digital reminders for all key dates - Automate submissions where possible using [accounting software](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) integrated with HMRC’s systems - Work with a proactive accountant who tracks these for you and provides early alerts By staying organised throughout the year, you’ll avoid the stress of last-minute filings and reduce the risk of financial penalties. ## Record-Keeping Obligations HMRC and Companies House expect companies to maintain complete and accurate financial and statutory records. You must keep records of: - Income and expenses – invoices, receipts, and bank statements - Sales and purchases – including credit notes and VAT invoices - Payroll information – payslips, RTI submissions, pension data - VAT records – if registered, digital records must meet MTD requirements - Company registers – shareholders, directors, persons with significant control (PSCs) - Board meetings and decisions – minutes and resolutions ### Retention Periods - Accounting and tax records – 6 years from the end of the financial year - PAYE records – 3 years after the tax year they relate to - VAT records – 6 years If HMRC investigates or audits your company, these records must be readily available. Digital record-keeping tools can automate much of this process and keep everything securely stored. ## Risks of Non-Compliance Ignoring your legal and filing duties can have serious consequences – both for your company and for you personally as a director. ### Financial Penalties - Companies House late filing penalties start at £150 and can reach £3,000 for accounts more than six months late - HMRC penalties include daily fines, surcharges, and interest on unpaid tax - Persistent lateness may also increase scrutiny from HMRC or trigger audits ### Legal and Reputational Risks - Late or inaccurate filings appear on your company’s public record - Non-compliance may affect your credit rating and ability to secure loans or contracts - You can even be struck off the register if filings remain overdue for too long ### Personal Liability Directors are legally responsible for ensuring their company meets its obligations. In serious cases (such as fraudulent or wrongful trading, failure to keep records, or deliberate non-payment of taxes) directors can be personally fined, disqualified, or prosecuted. The good news is that these risks are completely avoidable with good organisation and the right professional support. ## How a Specialist Accountant Helps You Stay Compliant and Stress-Free Running a business means juggling many responsibilities – but managing compliance doesn’t have to be one of them. A [specialist accountant](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) can take care of the complex filings and keep your company fully compliant year-round. ### Keeping Track of Deadlines Your accountant will remind you what you need to send them and, following your approval, will then submit your documents to HMRC and Companies House on time. This helps avoid missing key dates and facing penalties. ### Ensuring Accurate Filings Professional accountants prepare statutory accounts, tax returns, and payroll submissions in line with legal standards. This accuracy ensures HMRC and Companies House have consistent, correct information about your company. ### Maximising Tax Efficiency Accountants can support the decisions you need to make as a Director, by reviewing your circumstances and helping you balance your [salary and dividends](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) for maximum tax efficiency. They can also highlight [allowable expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) and reliefs you can claim, to help you to reduce your overall tax bill. ### Simplifying Record-Keeping Through cloud-based systems and Making Tax Digital compliant tools, your accountant can keep everything stored safely online. Here at SG Accounting, we offer [FreeAgent](https://sg-accounting.co.uk/freeagent/) software as part of our monthly package at no additional cost. ### Providing Ongoing Advice A good accountant goes beyond just compliance – they’re someone who can advise on cash flow, business growth, and strategy. They’ll help you adapt as tax laws change, keeping your company fully compliant. In short, a specialist accountant saves time, reduces risk, and gives you peace of mind – letting you focus on what really matters: running your business. ## FAQs ### [What are my main responsibilities as a limited company director?](#817b71013ebf8aa84) You’re responsible for filing annual accounts and a confirmation statement with Companies House, submitting a corporation tax return to HMRC, paying any tax due, and maintaining accurate company records. You must also operate PAYE and VAT systems if applicable. ### [When are my company’s filing deadlines?](#dfe2a208379d10d40) Annual accounts must be filed within 9 months of your company year-end. Corporation tax must be paid within 9 months and 1 day, and the CT600 return filed within 12 months. A confirmation statement is required every 12 months. ### [What happens if I miss a filing deadline?](#8a77b30a6e81504d9) Late submissions result in penalties from HMRC or Companies House. Persistent non-compliance can lead to director disqualification, company strike-off, or personal fines. ### [Do I need PAYE if I’m the only employee?](#896ea127d6be37eaa) Yes. If you pay yourself a salary as a director, you must register for PAYE, deduct Income Tax and National Insurance, and submit RTI returns to HMRC. ### [How long do I need to keep my business records?](#0cb2b4f0e55c47747) You should retain most financial records for six years after your company year-end, and PAYE records for three years. Digital record-keeping software can help you stay compliant. ### [What does a confirmation statement include?](#a06936d6eb80eba25) It confirms your company’s key information: registered office address, directors, shareholders, share capital, and persons with significant control (PSCs). ### [How can an accountant help me as a director?](#b87bb137abbe190fe) An accountant can remind you of all filings and deadlines, ensures accuracy, provides tax planning advice, and handles HMRC correspondence – helping you stay compliant and avoid stress. ## Final Thoughts Being a company director comes with both opportunities and responsibilities. With clear planning and the right accounting support, compliance becomes simple. Get in touch with us today to see how we can help you. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) **Categories:** News **Tags:** Kerry Newman --- ### [How Does Business Banking Work for Small Businesses and Contractors?](https://sg-accounting.co.uk/blog/how-does-business-banking-work-for-small-businesses-and-contractors/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** For [new limited company owners and contractors](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/), one of the most common questions is: do I need a business bank account? According to government guidance, “there must be a clear division between the company’s finances and those of the owners and directors.” In practice, this means opening a dedicated business bank account for your limited company. This guide explains why that requirement exists, how to choose the right account, the benefits it offers, and answers to the most common questions from contractors and limited company directors. ## ## Key Takeaways - Government guidance states you must keep your company’s money separate from your personal money - Opening a dedicated business bank account is the best way to stay compliant - A business bank account simplifies accounting, improves compliance, and presents a professional image - Compare banks based on features, software integration, and reliability, not just fees - Having multiple business bank accounts can support cash flow and tax management Sorry, your browser doesn't support embedded videos. ## Contents ## Why Limited Companies Need a Separate Business Bank Account When you register a limited company, it becomes legally distinct from you as an individual. As such, gov.uk clearly states that “your company’s banking must be separate from your personal banking”, and the simplest way to do this is to open a business bank account in your company’s name. Mixing personal and company funds can lead to: - Accounting confusion and inaccurate records - Problems with HMRC during tax submissions - Difficulties during audits or financial reviews - A less professional image with clients and suppliers Having a separate business bank account ensures your company’s finances remain compliant and organised. ## Key Benefits of a Business Bank Account There are several practical reasons to use a business bank account: - Keeps business and personal finances separate, making bookkeeping and tax returns easier - Helps demonstrate compliance with Companies House and HMRC requirements - Presents a professional image to clients and suppliers - Provides access to business-specific banking features such as overdrafts or merchant services - Integrates easily with [accounting software](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) like [FreeAgent](https://sg-accounting.co.uk/freeagent/) or Xero Having the right account helps your company manage money efficiently and professionally. ## How to Choose the Right Business Bank Account With so many options available, it’s important to compare features carefully before opening your account. Consider the following: ### Fees and Charges Review monthly fees, transaction costs, and other service charges. Some digital banks offer free introductory periods, while traditional banks may include added services. ### Features Look for tools that suit your business size and needs. Contractors may prefer simple mobile banking, while larger limited companies might require multi-currency or payroll options. ### Integration with Accounting Software Choose a bank that connects directly to your accounting software. This allows real-time transaction syncing and helps maintain accurate records. ### Customer Support and Accessibility Check whether you want in-person service or app-based support. Make sure the bank’s customer service is reliable and accessible. ### Reliability and Reputation Read customer reviews and confirm your chosen bank is fully regulated and protected by the Financial Services Compensation Scheme (FSCS). ## Business Banking Solutions for Contractors and Limited Companies Contractors and small limited companies often have different banking needs from larger businesses. Many banks now offer accounts designed for independent professionals, which often include: - Fast setup, usually within 24-48 hours - Low or no monthly fees for smaller transaction volumes - Real-time accounting integration - Built-in expense tracking and tax tools At SG Accounting, we have close working relationships with Tide and Zempler, both of which are fee-free and easy to get set up with. ## Integrating Your Business Bank Account with Accounting Software Choosing a bank that integrates with accounting software will save you time and reduce the risk of mistakes. Platforms like [FreeAgent](https://sg-accounting.co.uk/freeagent/) can connect directly to your business bank account, automatically importing transactions. This provides: - Real-time visibility of income and expenses - Quicker reconciliations - Fewer manual errors ## Should You Have More Than One Business Bank Account? In some cases, having more than one business account can make financial management easier. You might open additional accounts to: - Separate money for taxes, payroll, or savings - Manage cash flow more effectively - Provide a backup in case of banking issues Just ensure that each account is clearly documented and reconciled regularly. ## Common Mistakes to Avoid Avoid these common errors when setting up your business banking: - Mixing business and personal funds - Choosing a bank based only on low fees - Waiting too long to open your account after incorporation - Ignoring accounting software integration - Failing to review your setup regularly as your business grows A properly managed business account keeps your company compliant and ready for growth. ## FAQs ### [Is a business bank account required for a limited company?](#62a58610d15646bbb) According to government guidance, you must keep your company’s money separate from your personal finances. The best way to do this is by using a dedicated business bank account. ### [What are the main benefits of having a business bank account?](#a8a54e36983025fe3) It simplifies tax and accounting, supports compliance, improves professionalism, and often provides access to tools and integrations that personal accounts do not. ### [Which bank should I choose for my business account?](#2bbb311937de50c00) It depends on your needs. Traditional banks offer in-person service, while digital banks provide quick setup and lower fees. Compare features before choosing. ### [Can I have more than one business account?](#dc7c389927ddd9f32) Yes. Some companies open additional accounts to manage tax funds or savings. Just make sure you keep all your records organised. ### [Will my business bank account link with my accounting software?](#9edfc3a321d94d292) Most modern banks integrate directly with accounting platforms like FreeAgent and Xero. ## Final Thoughts For limited companies and contractors, the best way to stay compliant is by keeping your personal and business funds separate through a dedicated business account. If you need help choosing the right business bank account or want to integrate it with your accounting system, our team at SG Accounting can help. Contact us today to explore tailored business banking and accounting solutions for your company. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by Drazen Zigic – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [How do Limited Company dividends work?](https://sg-accounting.co.uk/blog/limited-company-dividends/) **Published:** May 6, 2025 **Author:** Kerry Newman **Content:** **Understanding how dividends work is key to running your Limited Company tax-efficiently and maximising your overall take-home pay.** While it's always wise to speak with your SG Client Director for tailored advice, having a solid grasp of the basics can help you make smarter financial decisions. In this blog, we'll break down what dividends are, how they're paid, and what you need to know as a Limited Company owner in the UK. ## What are dividends? Dividends are the distribution of company profits among its shareholders. As a Limited Company owner, you can pay yourself a salary and then supplement your income with dividends. The rules for taxing dividends are different from salaries, and many Limited Company directors will add their spouse / civil partner as a shareholder in their Limited Company, allowing them to draw more tax-free income from their company. ## When are you able to draw dividends? You're able to draw dividends from your Limited Company at any time you wish, provided there are sufficient profits within the company. Drawing dividends when this is not the case would be considered an illegal dividend or director's loan, potentially leading to an investigation by HMRC. Most Limited Company directors typically draw dividends monthly, quarterly, or annually, although it's entirely up to you how often you draw dividends. Just be sure to keep the correct records when doing so, to ensure HMRC can't class them as a 'disguised salary', should they decide to investigate. It's essential to document your decision to declare a dividend through minutes, and you must provide all shareholders with a dividend voucher (if using [FreeAgent](https://sg-accounting.co.uk/freeagent/) it will create these automatically for you). This creates a clear audit trail, which is useful to have in case HMRC wish to take a closer look. Additionally, all dividend vouchers are required for your annual tax return. ## What are the tax and National Insurance Contribution (NIC) implications? Dividends do not incur NICs, therefore due to lower tax rates, and not being subject to NI, dividends can yield a better net take home if withdrawn in an efficient manner. The dividends you receive are taxed as personal income, and there's a tax-free allowance of up to £500 per person. The current tax thresholds for the 2025/26 tax year for dividends are as follows: – Basic rate (taxed at 8.75%): up to £50,270 – Higher rate (taxed at 33.75%): from £50,271 to £125,140 – Additional rate (taxed at 39.35%): over £125,140 A dividend is taxed at the point of declaration, not when it's drawn, so timing your declarations is important. For instance, if you declare a dividend on April 1st, 2025, but it's not paid until April 7th, it will be included in your 2024/2025 tax return. Depending on your previous withdrawals during that tax year, this could push you into a higher tax rate. Your SG Accounting Client Director will guide you through this, helping you keep track of the applicable tax rate, assessing if it's worth drawing dividends, and determining the best timing for doing so. ## Final thoughts Please note that when declaring dividends, you will be paying these at gross to the shareholders. That means that any tax liability will need to be set aside personally and be paid via your self-assessment tax return. Any dividends declared in a given tax year will be payable by the following 31st January at which that tax year ends. For example, if declared in 24/25, the tax will be payable by 31st January 2026. If this is your first self-assessment tax return, and your liability is over £1,000, it is likely payments on account will trigger. If unaware, please reach out to your SG Client Director for more information. Dividends are deemed as taxable income and can be included in total taxable pay for references and mortgages, depending on the provider. Each person's situation is unique, and your individual circumstances will dictate when and how you choose to draw dividends. Always seek advice from your accountant before withdrawing any money from your business account to ensure you're taking the correct amount and [following all the regulations and guidelines set out by HMRC](https://www.gov.uk/guidance/director-information-hub-dividends). If you're searching for a new accountant, [get in touch with us at SG Accounting today](https://sg-accounting.co.uk/contact/). **Categories:** limited company, New to contracting, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [What do Limited Company directors need to file with HMRC and Companies House throughout the year?](https://sg-accounting.co.uk/blog/limited-company-directors-responsibilities/) **Published:** March 18, 2025 **Author:** Kerry Newman **Content:** As a director of your Limited Company, you have legal responsibilities such as filing and submitting various forms and returns to Companies House and HMRC throughout the financial year. Failing to do so will result in penalties, fines and unnecessary stress. If you’re new to the world of contracting, you may be unaware of what those deadlines are, and what’s expected of you and when. In this blog we highlight the key dates a Limited Company director will need to be aware of, in order to keep up to date with your legal responsibilities that come with being a director. Also to keep you on the right side of HMRC! ## **The tax year 2025 – 26** The UK’s tax year runs from 6 April to 5 April the following year. The following dates outline some or all of the obligations you’re required to meet throughout the financial year: #### **April 2025** **6 April –** The start of the 2025/26 tax year **19 April –** Deadline for employers to submit their Final Payment Submission (FPS) and the Employer Payment Summary (EPS) for the 2024/25 tax year **22 April –** Deadline for electronic PAYE payments for March 2025 #### **May 2025** **31 May –** If you employ any staff, you must provide your employees with their P60s Shows the total amount you’ve been paid through your Limited Company, including the amount of tax you’ve paid in that tax year. for the 2024/25 tax year #### **July 2025** **6 July –** Deadline for employers to report employee benefits and [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) using the P11D form Summarises the value of benefits in kind given to employees and directors in a tax year. , and to submit the accompanying P11D(b) **19 July –** Is the payment deadline for Class 1A National Insurance Contributions as per P11D submissions **31 July –** The second payment on account You must make payments on account every year if the total amount of outstanding tax from the previous tax year exceeded £1,000. for the 2024/25 tax year is due for Self Assessment Tax Return #### **October 2025** **5 October –** Deadline to register for Self-Assessment As a director/shareholder of your Limited Company, you must submit an annual Self Assessment, detailing your personal income and allowances to HMRC. It may include employment income, dividends paid to yourself from your company, and any other sources of income such as rental or sole trader income. if you’re self-employed or have income that’s not taxed at source **31 October –** Deadline for submitting your paper Self-Assessment Tax Return for the 2024/25 tax year (if applicable and you don’t file your self-assessment tax return online) #### **January 2026** **31 January –** Deadline to submit your online Self-Assessment Tax Return for the 2024/25 tax year Deadline to pay any tax owed for 2024/25 The first payment on account for the 2025/26 Self-Assessment Tax Return #### **April 2026** **5 April –** End of the 2025/26 tax year ### **Accounting Filing Deadlines and Confirmation Statements** **Annual Accounts –** Limited Companies must file their annual accounts with Companies House by the deadline, which typically is 9 months after the end of your company’s financial year. For example, if your year end is 31 March 2025, the filing deadline is 31 December 2025. **Confirmation Statement** Contains information about your company, the director/s, and any other administrative arrangements. It must also contain information about any Persons of Significant Control that are involved in your business. – Limited Companies must file a confirmation statement with Companies House once a year, which confirms your company details. The deadline is typically 12 months after the previous confirmation statement or incorporation date. **Corporation Tax** You’ll need to pay Corporation Tax to HMRC if your company made a profit during the accounting period. – Limited companies typically are required to pay Corporation Tax 9 months and 1 day after the end of your company’s financial year. For example, if your year end is 31 March 2025, the payment deadline is 1 January 2026. Limited companies must file a Corporation Tax Return (CT600) Once a year you must file a CT600 form with HMRC, which includes details of your company’s income, minus any tax allowances or business expenses. What’s left is your taxable profit, and this will be used to calculate the total amount of Corporation Tax your company is due to pay. with HMRC, this is typically once a year if the period is no more than 12 months long. For example, if your year end is 31 March 2025, the submission deadline is 31 March 2026. This would normally be filed the same time as your accounts are submitted with Companies House. ### **Quarterly VAT Deadlines** If you are VAT registered, you’d normally file your VAT returns If your company is VAT registered, it is most likely that you are required to submit VAT returns to HMRC every 3 months in line with the quarters selected. You must keep your VAT records digitally and use compatible Making Tax Digital software to submit your VAT returns. quarterly. Your deadlines will depend on your VAT accounting period, but will usually align with your company year end. For example: **7 May 2025 –** Deadline for the VAT period ending 31 March 2025 **7 August 2025 –** Deadline for the VAT period ending 30 June 2025 **7 November 2025 –** Deadline for the VAT period ending 30 September 2025 **7 February 2026 –** Deadline for the VAT period ending 31 December 2025 The filing deadline mirrors the payment deadline for VAT payable to HMRC. ### **Ongoing Monthly Deadlines** **PAYE and National Insurance** Employee’s NI must be paid if your salary exceeds the Primary Threshold. If you also pay yourself or any employees/directors above the Secondary Threshold your company must also pay Employer’s NI. Income Tax will be payable on behalf of employees above the personal allowance. – Full Payment Submission (FPS) and Employer Payment Summary (EPS) are due by the 19th of each month. Most companies will pay PAYE to HMRC on a quarterly basis and paid by the 22nd in the months of July, October, January and April. **CIS (Construction Industry Scheme) Returns –** Due by the 19th of each month. ### **SG’s top tips on how to stay organised** 1. **Use accounting software –** [Tools like FreeAgent](https://sg-accounting.co.uk/freeagent/) can help automate reminders and streamline your record-keeping 2. **Consult with your SG Client Director –** Your Client Director here at SG is always on hand to help you keep on top of your tax and accounting responsibilities, and understand what’s required from you. Get in touch with them whenever you have a question 3. **Stay informed –** Whilst your SG Client Director is here to help you run your business from a tax and accounting point of view, it’s also important that you keep up to date with HMRC’s latest guidance to ensure compliance. [Follow SG’s LinkedIn page](https://www.linkedin.com/company/sg-accounting) to see the latest news and information that affects Limited Company directors ## **Final thoughts** Staying on top of your tax obligations doesn’t need to be stressful, and by keeping these dates in mind and using the correct tools and support that’s available around you, you’ll meet your deadlines with ease and confidence. As always if you have any questions about anything to do with your company’s accounting and tax, your Client Director is always on hand to help. If you’re yet to join SG Accounting, [get in touch today to find out more](/contact/). **Categories:** New to contracting, News, Running your business, Tax **Tags:** Kerry Newman --- ### [Dormant Limited Companies in the UK: Rules, tax implications and how to stay compliant](https://sg-accounting.co.uk/blog/dormant-limited-companies-in-the-uk-rules-tax-implications-and-how-to-stay-compliant/) **Published:** May 21, 2026 **Author:** Alex Gould **Content:** [If you’re running a Limited Company](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) in the UK, there might be times when you decide to stop trading, but don’t want to close your business entirely. Whether you’re taking a break, planning, or restructuring, making your company dormant can be a practical solution. But if you do decide to make your company dormant, it does come with rules. From Companies House filings to HMRC obligations, it’s important to understand exactly what’s required to stay compliant. In this blog, we explain what a dormant company is, when it makes sense to make your company dormant, and how to manage it efficiently and compliantly. ## Key takeaways - A dormant company will not have any significant accounting transactions during the financial year - A dormant company's accounts can only be filed if the company has never traded - You are still required to file a confirmation statement annually - Informing HMRC may reduce filing requirements, but optional filings can be beneficial - Closing VAT and PAYE schemes can reduce admin and ongoing obligations ## Contents ## What is a Dormant Limited Company? A dormant Limited Company is one that has had no significant accounting transactions during its financial year. This will often apply to business owners who have paused trading, or for companies that have been set up in advance of future activity. ## Can you file dormant company accounts? This can be where directors easily get caught out. You're only able to file dormant company accounts if your company has never traded since incorporation. If your company has traded at any point, even if it's now inactive, you must continue filing full statutory accounts each year. You must also continue submitting an annual confirmation statement to confirm company details such as its directors, shareholders, and registered office address. ### SG Accounting Client Experience One of our contractor clients paused trading due to a market slowdown but didn't want to lose their company setup. By working with their Client Director, they: - Maintained full compliance with Companies House - Avoided unnecessary filings with HMRC - Kept the flexibility to restart trading quickly This approach meant they were ready to go again as soon as new opportunities arose. ## Why make your company dormant? Depending on your business goals, dormancy can be a strategic decision. Some common reasons can include: - **Taking a break from trading** (e.g. maternity/paternity leave, sabbatical, or economic slowdown) - **Protecting your company name** Secure your brand or idea for future use. Trademarks are also recommended - **Business restructuring** Pause activity while reorganising or preparing for a sale - **Avoiding dissolution** Keep your company active legally without closing it permanently Dormancy allows you breathing space, without losing your business identity in the process. ## HMRC, VAT and PAYE – What you need to know **HMRC Requirements** You should inform HMRC as soon as possible when your company becomes dormant. You can do so by: - Updating your Corporation Tax account online - Writing to HMRC - Calling the Corporation Tax helpline HMRC may then issue an exemption from filing a Company Tax Return. **However, you may still choose to file if:** - You have allowable expenses creating a loss - You want to carry forward losses to offset future profits ## VAT and PAYE: Reduce admin quickly If your company is no longer trading, consider simplifying [your obligations](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/): - **VAT:** De-register to stop quarterly VAT returns - **PAYE:** Close your PAYE scheme if there are no employees (including directors) ## Allowable expenses while dormant Dormant companies may still incur running costs, such as: - [Accountancy fees ](https://sg-accounting.co.uk/blog/how-much-does-a-contractor-accountant-cost-and-what-value-should-i-expect/) - Bank charges - Registered office services - [Software subscriptions ](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) If these are [valid business expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/), they may create a loss that can be carried forward to offset future profits, and your client director will be able to assist with this. ## FAQs ### [What is a dormant company in the UK?](#52c28a7efc784e12f) A dormant company is a Limited Company with no significant financial transactions during its financial year. ### [Can you file dormant company accounts if you’ve traded before?](#9305daa4356329e38) No. Dormant Company Accounts are only allowed if the company has never traded since incorporation. ### [Do you still need to file a confirmation statement?](#4436ad03d7faa2977) Yes. This is a legal requirement regardless of whether your company is active or dormant. ### [Do you need to inform HMRC if your company is dormant?](#1879f95060854aa27) Yes. Informing HMRC may reduce your filing requirements and prevent unnecessary penalties. ### [Should you still file a tax return if your company is dormant?](#245c705b045aebe9c) In some cases, yes, particularly if you want to carry forward losses. Your client director will be able to advise you on this. ### [Can you reduce admin if your company is dormant?](#a17af8a97c92e4596) Yes. De-registering for VAT and closing PAYE schemes can significantly reduce compliance work. ## Final thoughts Making your company dormant can be a smart, flexible option, but only if it's managed correctly. Understanding the difference between "non-trading" and "dormant" is key, especially when it comes to filing requirements and tax efficiency. If you're unsure what applies to your situation, getting expert advice can save you time, stress, and potential penalties. [Speak to your SG client director today](https://sg-accounting.co.uk/contact/) to find out more. Alex Gould Client Director Alex joined SG back in October 2017, and is ACCA partially qualified. Specialising in the complex needs of Limited Company contractors since joining SG, Alex enjoys overcoming the challenges his clients face on a daily basis, and aiding them in maximising their contractor take home pay. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/alex-goulds/) [LinkedIn](https://www.linkedin.com/in/alexander-gould-416248b5/) **Categories:** Expenses, limited company, Running your business, Tax, VAT **Tags:** Alex Gould --- ### [Dormant Companies Explained for Limited Company Contractors](https://sg-accounting.co.uk/blog/dormant-companies-what-contractors-and-freelancers-with-a-uk-limited-company-need-to-know/) **Published:** May 21, 2025 **Author:** Frances Bridge **Content:** If you have a Limited Company you may find there are times when you’re not trading but you want to keep your company active, or you may decide to set a company up but not trade straight away. In both cases you’d put your company into a dormant state. But what is a dormant state, how does it work, and how can SG Accounting help? In this blog we take a closer look at dormant companies, to help you understand your options when it comes to dormancy. ## What is a dormant Limited Company? A dormant Limited Company is one without significant accounting transactions during a financial year. For contractors and freelancer, this will usually mean they’ve ceased trading, are no longer issuing invoices, incurring regular expenses, or receiving payments, or a company has been set up which isn’t trading yet. However, it’s important to understand that by simply stopping trading you’re not able to file Dormant Company Accounts (DCA) if your company has traded in the past at any point. You’re only ever able to file DCA if your company has **never traded** since its incorporation. Once your company has traded historically, even if there are only a few to no current transactions, you must continue to file a full set of statutory accounts annually. You are also required to continue to submit an annual Confirmation Statement, regardless of your current trading status. This is a legal requirement and confirms your company’s details (such as directors details, your registered office address, shareholders, etc). ## Reasons why you’d put your company in a dormant state Making your company dormant can be a strategic move, depending on what your business goals and circumstances are. The below examples include some of the common reasons why contractors and freelancers may choose dormancy: - **Taking a break from trading –** you may be taking a sabbatical, maternity / paternity leave or a downturn in the market may be the reason for dormancy. By doing so you’re able to keep the structure of your company, without closing it down fully - **To protect your business’ name and costs –** by registering a company and then making it dormant you’re able to reserve the company’s name, and allows you to protect intellectual property for future use - **Preparing for a future venture –** you may decide to set up a company and put it in a dormant state so that you’re ready to hit the ground running when your next investment or project begins - **Restructuring or selling parts of your business –** if your company is undergoing internal reorganisation, is winding down, or you’re preparing to sell assets or shares, by putting it into a dormant state you can keep it alive legally, without actively trading - **Avoiding dissolution –** closing a company is final and cannot be undone, so dormancy allows you that flexibility to reactivate your company should your plans or circumstances change in the future ## Are HMRC filings still necessary? If your company is no longer trading, then you’re able to inform HMRC by notifying your local Corporation Tax office that your company is now in a dormant state. There are a few ways in which you can do this: 1. Send a letter to HMRC 2. Update your company’s status via your online Corporation Tax account 3. Call HMRC’s Corporation Tax helpline directly HMRC may then issue you with a ‘Notice to deliver a Company Tax Return’ exemption for that period. However, you’re still able to file with HMRC if you choose to do so, especially if: - You have allowable expenses (such as accounting fees, bank charges, or any software subscriptions) that result in a loss - You want to ensure that those losses are caried forward to offset against future profits if the company resumes trading Filing even when your company is dormant can be a proactive move to preserve tax efficiency in the long run. ## VAT and PAYE: Reducing Compliance Burdens If your company is no longer trading: - **VAT:** If you are VAT-registered but no longer making taxable supplies, consider de-registering from VAT to stop quarterly VAT returns and simplify compliance - **PAYE:** If you have no employees (including yourself as a director), you can close your PAYE scheme with HMRC to remove the need for monthly RTI filings. By taking these steps you can significantly reduce the admin that’s involved in keeping a non-trading or dormant company compliant. ## Are there any allowable expenses? Even if your company is in a dormant state, there can be minimal ongoing costs that could be considered allowable business expenses, such as: - Annual accountancy fees - Bank charges on the company account - Registered office service or mail handling - Software subscriptions used to maintain records (e.g., accounting software) If these types of costs are genuinely incurred for the business, then they may contribute to a trading loss that can be carried forward. ## Limited Company dormancy – in conclusion If you’re a contractor or freelancer that has made the decision to cease trading, or you’ve set a company up but are yet to start trading, it’s important to: 1. Understand that if your company has ever traded, you must continue to file full statutory accounts with Companies House each year; Dormant Company Accounts can only be filed if the company has never traded. 2. Continue to file a Confirmation Statement annually. 3. Consider whether filing with HMRC might be beneficial for loss relief purposes. 4. Evaluate whether it’s worth de-registering from VAT or closing the PAYE scheme. 5. Keep track of any allowable expenses, even while dormant. By doing so you’re able to keep your company compliant, reduce unnecessary filings, and keep your options open for the future. If in doubt, it’s always wise to speak with your SG Client Director to ensure you’re meeting your obligations while minimising overheads. ## How SG Accounting can help Your SG Client Director is only ever a phone call or email away, and is ready to help guide you through each and every stage of running your Limited Company. [Get in touch with them](https://sg-accounting.co.uk/contact/) to discuss any specific questions you may have about dormant companies, the process or the future of your company. **Categories:** Expenses, News, Running your business, Tax **Tags:** Frances Bridge --- ### [Spring Budget 2017](https://sg-accounting.co.uk/blog/spring-budget-2017/) **Published:** March 9, 2017 **Author:** Kerry Newman **Excerpt:** The Chancellor Philip Hammond has delivered his first Budget speech and outlined plans for what he called ‘a fair, stable and competitive tax system’. **Content:** The Chancellor Philip Hammond has delivered his first Budget speech and outlined plans for what he called ‘a fair, stable and competitive tax system’. In stark contrast to the often celebratory style of his predecessor George Osborne, Hammond was somewhat subdued as he vowed to deliver a Budget fit for a ‘longer term Britain’, post Brexit. Despite the Office for Budget Responsibility upgrading its growth forecasts from 1.4% to 2%, the Chancellor pledged there is ‘no room for complacency’. ‘Spreadsheet Phil’, as he is becoming fondly known, didn’t disappoint as he pressed ahead with a number of policies announced in the Autumn Statement. So, which changes will affect you? We have reviewed the detail and put together a short summary of the most relevant issues that affect contractors and small business owners. Keep an eye on our Blog Page over the coming days for further information. - **Income tax rates** From 6 April 2017, the Personal Allowance and Higher Rate Threshold limits will, as planned, be increased to £11,500 and £45,000 respectively. The government reaffirmed its plans to deliver a Personal Allowance of £12,500 and a Higher Rate Threshold of £50,000 by the end of this Parliament. Hammond also announced a further reform to dividend taxes which will affect contractors working through their own limited company. Currently the first £5,000 of dividends received each tax year are not subject to personal tax – this will be reduced to just £2,000 from April 2018. What does all of this mean for the new tax year starting in April? Read our handy guide to tax planning in 2017/18 here. - **National Insurance** The Chancellor announced an increase in Class 4 National Insurance Contributions (NICS) for the self-employed. Historically, employed workers paid higher rates of National Insurance in return for a greater entitlement to state benefits. Since 2016, the self-employed are entitled to broadly the same benefits and as such, Hammond took the opportunity to increase Class 4 NICS from 9% to 10% in April 2018 with a further 1% increase planned in April 2019. Limited company contractors need not worry about these changes as for NIC purposes, they are not considered self-employed. - **Corporation Tax rates** Reaffirming the Conservative pledge that ‘Britain is open for business’, Corporation Tax rates will fall from 20% to 19% in April this year with further reductions planned to introduce a 17% rate by 2020. This is a welcome relief for those operating via their own company and goes a long way towards mitigating the impact of the new dividend tax rates. - **VAT** Whilst the mandatory VAT registration threshold will rise from £83,000 to £85,000 in April 2017, most contractors and small business owners will choose to register voluntarily, regardless of turnover. However, Hammond announced plans to revise the Flat Rate Scheme in his Autumn Statement and a consultation period has recently been concluded. Read our summary of the changes and how they might affect you [here](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/). - **Making Tax Digital** Plans to introduce quarterly reporting requirements for businesses continue. However, acknowledging the concerns expressed over the timetable for implementation, Hammond announced a delay of one year for those businesses with turnover below the annual VAT registration threshold. Despite this concession for smaller businesses, an additional compliance burden is set to come into force for most over the next few years – by 2019 0r 2020 depending on circumstances. We will continue to monitor developments and make announcements when necessary. - **IR35** Although Hammond made reference to reducing the so-called tax gap between the employed and self-employed, there are no new measures surrounding IR35 specifically in this year’s budget. As expected though, IR35 reforms for public sector contractors go ahead from April 2017. A minor change was announced giving a choice to the end client or agency about whether to take account of any allowable expenses prior to calculating the tax deductions from the contractors pay, but the draft legislation otherwise remains unchanged. Affected contractors still have the right to claim legitimate expenses at the end of each year. Having tested the new HMRC ESS tool, designed to provide an IR35 assessment based on the answers to a series of stock questions, we are actually quite pleased to report that most professional contractors should pass the test. The fact that the tool essentially bypasses years of case law on IR35 status is another matter entirely. Time will tell how effective the tool is – and whether public sector organisations actually use it. For those contractors working within the Public Sector, read our blog [here](https://sg-accounting.co.uk/blog/contracting-public-sector/) which outlines the options available to you. For private sector contractors, the Spring Budget is definitely a case of ‘no news is good news’. - **SG View** In summary, another mixed bag for contractors and small business owners. Planned increases to dividend taxes will inevitably increase the tax payable but for most, it wouldn’t equate to more than £225 per year. Changes to the Flat Rate Scheme will also claw back some of the benefit from being VAT registered. However in contrast, increases in the Personal Allowance and Higher Rate Thresholds will allow higher dividend withdrawals without incurring higher rate tax. Furthermore, reducing Corporation Tax rates will certainly help soften the blow. SG Accounting was established in 1995 to service the accountancy and taxation needs of professional contractors and freelancers. We are based in Winchester, and also spend much of our time travelling to meet our clients around the UK. Bringing a true personal service to contractors across the country, we believe in saving you time and tax! When you call us, you’ll speak to an accountant, not a sales team. If you would like to discuss any of the issues raised in this year’s Spring Budget, please feel free to call us direct on 01962 867550 or visit our website [www.sg-accounting.co.uk](https://sg-accounting.co.uk/). **Categories:** News --- ### [How to challenge a client’s IR35 determination](https://sg-accounting.co.uk/blog/how-to-challenge-a-clients-ir35-determination/) **Published:** October 21, 2020 **Author:** Kerry Newman **Content:** The rules for how to determine IR35 status aren’t changing, only the entity in charge of making the determination. Whoever makes the decision is expected to use reasonable care in making the determination, and judge each contract on its own merits. As a result some end-hirers are placing a blanket inside IR35 status on all contractors, so that they firstly don’t have to deal with the responsibility of deciding a contractor’s status or have to pay for the tax implications, should they miss-identify. So what can you do if your contract is determined as inside IR35? In this blog we explore just that, and give you the tools to challenge an incorrect status, with help from your SG accountant. **CEST – HMRC’s IR35 determination tool** Private sector clients will most likely be new to the concept of defining a contractor’s IR35 status, and as such many will use the only tool available to them. HMRC’s [CEST (Check Employment Status Tool)](https://www.gov.uk/guidance/check-employment-status-for-tax) allows clients to answer a number of questions concerning a contractor’s contract and working practices, and then in turn will reveal whether a contractor is inside or outside of IR35. The tool has come under fire, as it’s not 100% accurate and some HMRC investigations have even contradicted its own tool. Sadly for contractors if nothing changes between now and April 2021, this tool will likely be used to determine their IR35 status. **Challenging an IR35 decision** If you disagree with a client’s IR35 decision, you’re able to challenge it using the client-led disagreement process: 1. Request the ‘status determination sheet’; that each business is required to provide 2. Send it directly to your SG accountant with a copy of your latest contract. They will then carry out a review 3. You could also run your contract through the CEST tool yourself. Whilst we acknowledge that the tool is flawed, for many contractors it will still arrive at an outside IR35 decision 4. Present your evidence to your end-hirer / client, which will kick-off the ‘client-led disagreement’ process. HMRC have stated that they will stand by the decision made by CEST, so long as the answers given are factually correct. So for most clients, an outside IR35 decision should be enough to reassure them 5. At present there is no further guidance except that the end-hire/client will have 45 days to respond to your appeal After this process regardless of your status outcome, it should be your final decision whether you decide to contract via your Limited Company (whilst paying the relevant taxes) or through an Umbrella company. We’d suggest talking to your end client about increasing your day rate, to cover any unsuspected losses. **Ongoing support from SG** As always your SG accountant is on hand to support you with all things IR35 related. Included in your monthly accounting package is unlimited IR35 advice from your accountant, free use of our Umbrella services should you need it, and support challenging client status determination. Simply get in touch with your personal accountant for further advice and support. Note: All the information and advice in this blog post was correct at the time of writing. **Categories:** Client IR35 Hub --- ### [How Much Does a Contractor Accountant Cost, and What Value Should I Expect?](https://sg-accounting.co.uk/blog/how-much-does-a-contractor-accountant-cost-and-what-value-should-i-expect/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** If you have decided to contract through a Limited Company and wonder how to handle your accounting responsibilities and what it might cost to engage an expert, then this article is for you. [Becoming a Limited Company contractor](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) can open the door to greater earning potential and tax efficiency – but it also brings additional responsibilities. One of the first decisions you’ll face is whether to appoint an accountant, and the first thing you might ask when considering this is: how much does a contractor accountant cost, and what value should you expect for your money? This guide outlines typical fees, what’s included, what adds value, and how to choose a specialist who understands Limited Company contracting inside out. ## ## Key Takeaways - Contractor accountant fees usually fall between £80–£150 per month for Limited Company support. - Good value includes bookkeeping software, submissions, payroll, and proactive tax planning built around a contractor’s needs. - A specialist Limited Company contractor accountant provides tailored advice that general accountants can’t match. - Always assess value, expertise, and service – not just price. Sorry, your browser doesn't support embedded videos. ## Contents ## Typical Costs for Contractor Accountants (Limited Company) [Contractor accountants](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) typically operate on a fixed monthly fee. Costs vary based on the level of support you need and whether bookkeeping is included. ### Typical Price Range - £80-£120 per month – Standard Limited Company contractor package - £120-£150+ per month – Premium packages with bookkeeping, unlimited advice, and regular reviews - £900-£1,500 annually – For firms offering annual payment options ## What’s Usually Included in a Contractor Accounting Package? Specialist Limited Company contractor accountants generally cover the essentials needed to run your company compliantly and tax efficiently. ### Core Inclusions - Annual Accounts & Corporation Tax Return - Director payroll - Quarterly VAT returns - Confirmation Statement filing - Cloud bookkeeping software - Tax planning tailored to contractors - Support with dividends, expenses and company structure - IR35 guidance and contract advice For Limited Company contractors, these aren’t optional – they’re the foundations of staying compliant. ## What Might Add Cost? Some providers charge extra for services that others include as standard. Understanding this helps you compare like-for-like. ### Common Extra Costs - Self-Assessment Tax Return: £250-£400 - Accounting software: £200-500 per year - Registered Office & Mail Handling: £10-£15/month - Bookkeeping services: £30-£80/month (if not included) - Company formation: Free with some accountants, otherwise £100-£200 When comparing packages, check what’s truly included – two accountants charging the same fee can offer very different levels of support. ## What Value Should a Specialist Contractor Accountant Provide? Cost matters – but true value comes from expertise and proactive support, particularly for Limited Company contractors. ### 1. Contractor-specific Tax Efficiency A contractor accountant should help you with the information you need to make key decisions as a Director such as: - Optimising your salary/dividend mix - Identifying [allowable expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) - Choosing the right [VAT scheme](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/) - Timing of dividends and major purchases - Maximising your take-home pay while staying compliant This level of advice can save significantly more than the cost of the monthly fee. ### 2. IR35 Expertise [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/) is a critical issue for Limited Company contractors. An accountant who truly understands IR35 will be able to provide: - Working practices guidance - Advice on operating [inside vs outside IR35](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) - Support if your [IR35 status changes](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/) between assignments Understanding IR35 can protect both your compliance and your take-home pay. ### 3. Compliance and Peace of Mind A good contractor accountant ensures: - Timely, accurate filings - No missed deadlines - No avoidable penalties - HMRC correspondence handled on your behalf - Clear, proactive communication For contractors juggling client delivery, this peace of mind is invaluable. ### 4. Reduced Admin and Time Savings Your accountant should help streamline your workflow through: - Automated bookkeeping - Online expense capture - Easy invoice creation - Real-time tax overviews - Managed payroll and VAT This frees you to focus entirely on your contract work. ### 5. Unlimited, Human Support Top-tier contractor accountants offer: - Unlimited queries - Fast response times - A named point of contact - Support that adapts as your business grows This is particularly important for contractors who want reassurance and clarity, not generic call-centre support. ## How to Choose a Good-Value Contractor Accountant Price is only one part of the decision. You should also ask: - Do you specialise in Limited Company contractors only? - Is your monthly fee all-inclusive? - Is [bookkeeping software](https://sg-accounting.co.uk/blog/what-accounting-software-should-i-use-as-a-contractor/) included? - Do I get a named accountant? - What’s your IR35 experience? - Are personal tax returns included or extra? - Are there any hidden fees? ### Green Flags - Transparent, fixed pricing - Contractor-only focus - Proactive tax planning - Unlimited advice - Clear onboarding and switching process ### Red Flags - Extra fees for basic submissions - Generalist accountancy with no contractor specialism - Slow or unhelpful responses - Lack of IR35 knowledge ## FAQs ### [How much should I expect to pay for a Limited Company contractor accountant?](#74b7934823cc8bcc1) Most pay £80–£150 per month depending on how comprehensive the package is. ### [Is a specialist contractor accountant worth it?](#7112a02742adcab27) Yes. Limited Company contractors benefit greatly from niche tax planning, IR35 support, and industry-specific compliance guidance. ### [Do contractor accountants handle personal tax returns?](#ec06f705dec469fa0) Many do, but some charge extra. Others include it within premium packages. ### [Can I switch accountants easily?](#f8b0d2c55342cc39f) Very easily. Your new accountant should manage the entire professional clearance process for you. ### [Why do prices vary so much?](#0c17824f36b94259f) Some firms include everything in the monthly fee, while others add charges for essentials like VAT returns, payroll, or bookkeeping software. ## Final Thoughts A contractor accountant shouldn’t just file your returns – they should help you run a compliant, efficient, tax-optimised Limited Company with confidence. Expect to pay around £80–£150 per month, but focus on value, expertise, and contractor-specific support rather than price alone. At SG Accounting, we offer a [fully inclusive, great-value package](https://sg-accounting.co.uk/prices/) designed specifically for Limited Company contractors – no hidden fees, unlimited support, market-leading software, and specialist advice whenever you need it. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) **Categories:** News **Tags:** Kerry Newman --- ### [What Insurance Do I Need as a Limited Company Contractor?](https://sg-accounting.co.uk/blog/what-insurance-do-i-need-as-a-limited-company-contractor/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** If you’ve decided to contract through a limited company and are wondering about what insurances you need, then this article is for you. [Setting up a limited company as a contractor](https://sg-accounting.co.uk/blog/how-do-i-get-started-as-a-contractor-through-a-limited-company/) means taking on the responsibility for protecting your business, meeting client expectations, and demonstrating that you operate as a genuine company. Having the right insurance in place is part of that picture and in many cases, it’s not just recommended but required before a contract can begin. Below, we look at the main types of insurance you need to consider as a limited company contractor, how they protect you day-to-day, and how they can support your [IR35 status](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/). ## ## Key Takeaways - Having the right insurance protects your business and shows clients you operate as a genuine limited company. - Professional indemnity insurance covers mistakes, negligence, or professional disputes with clients. - Public liability insurance protects you if someone is injured or property is damaged because of your work. - Employers’ liability insurance is a legal requirement if you employ anyone, even family members. ## Contents Sorry, your browser doesn't support embedded videos. ## Professional Indemnity Insurance This type of insurance protects you if a client claims that you’ve made a mistake, gave them incorrect advice or breached professional duties. Even where you’ve delivered everything correctly, misunderstandings can happen, and you may still have to defend yourself. Having professional indemnity will cover any costs needed to pay compensation to correct a mistake or settle a claim, and it can also cover legal defence costs. Professional indemnity insurance typically covers: - Negligence or professional errors - Breach of confidentiality - Copyright or intellectual property issues - Defamation - Advertising or communication mistakes - Errors made by subcontractors or outsourced workers Because contractors often work autonomously and are responsible for delivering the agreed upon service, clients tend to expect that you carry your own professional indemnity cover. Some won’t allow you to start work without it, and many specify minimum cover limits in the contract. If you use subcontractors, it’s important to understand that mistakes made by anyone working on your behalf can still fall under your liability. Having professional indemnity insurance ensures that you are protected. ## Public Liability Insurance Public liability protects your business if someone is injured or if property is damaged as a result of your work. Contracts that involve on-site work or the use of specialist equipment often require proof of public liability insurance. Some clients will include it as part of their standard onboarding process, even for desk-based contracts. If you work across multiple locations or travel to client offices, check that your policy covers the areas where you operate and any subcontractors you may use. While these types of claims can be rare, the financial consequences can be serious so make sure your business is covered. ## Employers’ Liability Insurance This cover protects your company if someone who works for you becomes ill or injured as a result of their job. Having the minimum level of cover (£5,000,000) is a legal requirement if you employ anyone, even if that person is a spouse or family member. It’s also common for agencies to require contractors to hold employers’ liability insurance regardless of company size. Keeping an up-to-date certificate is important as clients may request it at any point during a contract. ## How the Right Insurance Supports Your IR35 Status Insurance plays a meaningful role in demonstrating that you operate as a genuine business rather than as an employee. Under [IR35 rules](https://sg-accounting.co.uk/blog/what-is-ir35/), one of the indicators of being “in business on your own account” is whether you take on financial risk. If you hold professional indemnity and public liability insurance, you are showing that: - You operate independently as a supplier, not as staff - You take responsibility for professional mistakes and third-party risks - You behave like a business and have the right protections in place It’s worth noting that insurance alone cannot place you [outside IR35](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/). However, having insurances does strengthen your broader position when combined with other business indicators such as having your own equipment and the ability to send a substitute in your place. ## Choosing the Right Insurance Package Here are some considerations when putting your insurance in place: - Review the insurance requirements in your contract - If you work with subcontractors, ensure your policy includes their activity - Review your cover annually, especially as your services or working arrangements change - Keep your insurance documents organised so they can be provided quickly when requested Insurance may feel like an added expense, but the cost of not having it can be far higher. Claims, legal disputes, contract delays or IR35 challenges can all have a significant impact on your business. It’s always worth making sure you’re fully protected. ## Preferential Insurance Rates When you [sign up with SG Accounting](https://sg-accounting.co.uk/sg-accounting-signup-form/), you’ll get preferential rates with a choice of insurance partners offering contractor-specific and general packages. This could be Professional Indemnity, Public Liability, Employers Liability, cyber cover or even general office insurance. And all new clients get their first 3 months of Fee Protection Cover for free. **Use our bespoke links for a 10% discount with:** [![Click here to use our bespoke Qdos link and get a discount](https://sg-accounting.co.uk/wp-content/uploads/2024/01/qdos-button.png "| SG Accounting")](https://my.goqdos.com/) **Use code SG10 for Qdos** [![Click here to use our bespoke Kingsbridge link and get a discount](https://sg-accounting.co.uk/wp-content/uploads/2024/01/kingsbridge-button.png "| SG Accounting")](https://sg.kingsbridge.co.uk/) ## FAQs ### [What insurance do I need as a limited company contractor in the UK?](#7b19478d6634aa50d) Most contractors are expected to have professional indemnity insurance, public liability insurance and employers’ liability insurance. These policies protect you against claims of professional mistakes, injury or property damage, and they are often required by agencies or clients before a contract can begin. ### [Is professional indemnity insurance required for contractors?](#8acc887c75515484a) Professional indemnity insurance is not a legal requirement, but most clients and agencies will specify a minimum level of cover and will not allow you to start work without it. It protects you if a client claims that you made an error, gave incorrect advice or caused financial loss. ### [Do I need public liability insurance if I work on site at a client’s office?](#635af7e28b90e0a30) Most clients will require proof of public liability if you are going to be working on-site. This insurance covers you if your work causes injury or property damage while working at a client’s premises. ### [Is employers’ liability insurance legally required for my limited company?](#b74b455ddd742c541) Yes, if your company employs anyone, including a spouse or family member, you must have employers’ liability insurance with a minimum of £5 million in cover. Some agencies expect contractors to hold this policy regardless of company size, so it is worth checking the requirements in your contract. ### [Can insurance help my IR35 status as a contractor?](#927e95a1ef5b5cf7c) Insurance does not decide your IR35 status, but it can support it. Holding business insurance shows that you take on financial risk and operate as an independent company rather than as an employee. ## Final Thoughts If you operate as a limited company contractor, the right insurance is essential both for protecting your business and for demonstrating professionalism to agencies and end clients. If you need help understanding which insurances you need, speak with your client director or [get in touch](https://sg-accounting.co.uk/contact/) if you’re not already an SG client. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by rawpixel.com – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [Contracting in Cybersecurity](https://sg-accounting.co.uk/blog/contracting-in-cybersecurity/) **Published:** January 9, 2018 **Author:** Kerry Newman **Content:** ContractorUK lists cybersecurity contractors as one of the most sought-after IT specialists. This statement is backed-up by a report that was released in December 2017 by The Recruitment & Employment Confederation (REC). The report states that the demand for cybersecurity staff will soar during 2018, pushing cybersecurity contractor’s day rate above its current average of £500. The REC report highlighted that only 16% of recruiters surveyed believe that the demand for cybersecurity specialists will be met. This skills shortage is fantastic news for IT contractors who are thinking of entering the market or current IT contractors who are looking to reskill. ![Code hacking](https://sg-accounting.co.uk/wp-content/uploads/2018/01/hacking-1685092_960_720.jpg "Hacking | SG Accounting") **Demand for cybersecurity contractors** For a long time, the cybersecurity industry has been playing catch-up to the digital age. As businesses become more reliant on digital technology and invest further in ‘big-data’, they are recognising the importance of protecting themselves and their customers’ data from ‘cyber-attacks’. It is estimated that around [4000 cyber-attacks](https://www.entrepreneur.com/science-technology/business-cyber-attacks-top-4000-per-day-your-guide-to/284754) occur daily. Cyber-attacks can cost a business thousands of pounds, even millions in some cases. In 2015, Tesco reportedly lost around £2.5 million through a breach in security at a UK bank. It’s not just businesses that are targeted by cyber-criminals. In May 2017 the NHS was the target of a global ransomware attack, called WannaCry. A ransom was demanded and many doctors surgeries and hospitals were unable to access files. **Areas recruiting cyber-security specialists** The demand for cybersecurity specialists is growing, particularly in areas that handle a large amount of data. The obvious one is the finance and banking sector, but it is also stretching to service providers, manufacturing, healthcare and advertising. The latest figures we could find show that [14%](https://www.computerweekly.com/news) of all jobs in IT are centred around cybersecurity. This data is taken from 2015, and from what we have read, we expect it to be much higher today. ![Retraining and Paperwork for Cybersecurity](https://sg-accounting.co.uk/wp-content/uploads/2018/01/william-iven-19843.jpg "Working | SG Accounting") **So, you want to work in cybersecurity?** Cybersecurity certainly looks like a booming area to get involved in, but can anyone become a cybersecurity contractor? Whilst, cybersecurity is a specialist area of IT contracting, cybersecurity professionals don’t work alone in the business, they interact with the business. So, if you are a contractor with experience in areas like financial and accounting systems, regulations and policy, you may find that it is easy to cross over into cybersecurity. If you don’t have the technical knowledge that is required for cybersecurity, supporting roles are also available in areas like risk analytics & management, research, education and training. **Ready to take the step into cybersecurity?** If you feel you have the right technical knowledge and personal qualities to become a cybersecurity contractor, one of your first steps should be to get in touch with a client-focused specialist contractor accountant, like ourselves to assess if you are operating in the most tax-efficient manner. Based on the average day rate of a cybersecurity contractor (£500), the most tax-efficient manner should be working via your own limited company. However, this depends on your personal circumstances and the specifics of the contract. If you’re thinking about setting up a limited company, you may find our article ‘6 tips for setting up a limited company’ an interesting read. **Categories:** News, Running your business **Tags:** Switching - Service --- ### [4 Things Not to Say to Your Accountant](https://sg-accounting.co.uk/blog/4-things-not-say-accountant/) **Published:** December 5, 2017 **Author:** Kerry Newman **Content:** When hiring an accountant, there are standard questions to ask. How much are fees, can they manage your tax preparations and filings, is your data safe, and what is expected from you in return (i.e. do you need to fill out online forms). But what questions should you steer away from? ## 1. Do not ask your accountant to lie When looking for an accountant, you search for someone with knowledge, experience, and integrity. After all, it is *your* money in their hands. You want to make sure they are the most reliable and cost-effective. So, asking this same professional to lie isn’t going to happen. Most accountants won’t lie. Accountants are there to make your life easier. Hiring someone who fabricates your financial records on request makes your life complicated and puts your business in jeopardy – financially and legally. ## 2. Do not pretend to understand Your accountant covers lots of topics. If you don’t understand something, then ask. For instance, if your accountant is covering [claimed expenses](https://sg-accounting.co.uk/guides/expenses-guide/) but you are unsure what this encompasses then ask for clarification. If you don’t, you could miss out on saving money. Your accountant offers heaps of information regarding regulations, tax deadlines, and more. It’s okay to admit you don’t comprehend how it applies to you as a contractor. By asking questions and taking the additional time to learn, you discover new ways your business can develop. ## 3. Do not neglect an accountant’s advice An accountant comes equipped with all-inclusive wisdom ready to assist you and your finances. They are present for you to rely upon for solutions to your business needs. Dismissing what your accountant says as insignificant can have costly ramifications. ## 4. Do not fictionalise or hide records Hiding facts from your accountant prevents them from delivering a successful outcome. If you conceal information from your accountant and a problem arises with HMRC due to these withheld figures then your accountant cannot execute preventative measures protecting your business from financial damage. The more information you supply, the better the job your accountant can do. **If you have any questions, [feel free to contact us today](https://sg-accounting.co.uk/contact/).** **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [5 Common Mistakes Found on Self Assessment Tax Returns](https://sg-accounting.co.uk/blog/common-mistakes-tax-returns/) **Published:** December 14, 2017 **Author:** Kerry Newman **Content:** Tax return time is a stressful period for most of us. Have I got all the records I need? What if I forget to include something vital? Most crucially of all, have I put enough money away to pay my bill? These are the questions that keep many a contractor awake at night as January creeps to its wintery end. Making simple, avoidable mistakes on your tax return can cause delays in calculating what you owe – or are owed – and string the agony out for longer than is really necessary. Here are five common mistakes that you may kick yourself for making. ## **1. Not declaring all income/Capital Gains** There are severe penalties for failing to declare all relevant income and Capital Gains. For deliberate errors, e.g. omitting a source of income on purpose, you could potentially be prosecuted. These are the types of income/Capital Gains you need to declare: - Income from employment - Benefits including maternity/paternity pay, statutory sick pay, job seekers allowance - Pension income - Interest, dividends from savings, bank accounts, building societies investments or Trusts etc. - Property income - Foreign income including evidence of tax already paid abroad - Capital gains - Employee share schemes - Dividends ## **2. Trying to claim expenses that can’t be claimed** There are [complex rules governing what expenses you can deduct](https://sg-accounting.co.uk/guides/expenses-guide/), and there are costly penalties for incorrect claims. If you are in any doubt check with your accountant. It’s far better to check these things carefully – some things you may think can be claimed, can’t. But there are also a few things you may not have thought to claim. To help make sure you are being as tax-efficient as possible, [please speak to one of our experienced accountants](https://sg-accounting.co.uk/contact/). ## **3. Not enclosing supplementary pages** For additional income not covered by the main tax return, you will need to include supplementary pages. Additional information which may be relevant includes: - Interest from gilt edged and other UK securities, deeply discounted securities and accrued income profits - Life insurance gains - Stock dividends, non-qualifying distributions or close company loans written-off - Post cessation receipts - Income from share schemes - Lump sums or compensation payments from your employer, or foreign earnings not taxable in the UK - Taxable lump sums from overseas pension schemes - Certain employment deductions - A claim to age related Married Couple’s Allowance - Other tax reliefs not found in the main part of your tax return - Loss relief claims - Income from property ## **4. Ticking wrong boxes** HMRC frequently pull up tax returns that have had incorrect boxes ticked, or boxes not ticked when they should have been. Having wrong boxes ticked can result in HMRC opening an enquiry into your taxes and can result in a penalty for providing inaccurate information. Having your tax specialist prepare your tax return will help avoid this easy mistake. ## **5. Missing the deadlines** The deadline for submitting a paper return is 31st October following the end of the tax year. The deadline for filing your tax return online is 31 January after the end of the tax year. So a tax return for the 2016/17 tax year would need to be submitted online by 31 January 2018. If you miss the deadline, you will have to pay penalties which increase the longer you delay. We will always send you reminders to send us your information, sign your tax return and pay your liability so you don’t miss the deadlines. ## What to do if you do make a mistake on your tax return If you do make a mistake on your tax return you’ve normally got 12 months from the submission deadline to correct it. This is called an ‘amendment’. For example, for the 2016/17 tax year you have until 31st January 2018 to file your tax return online. If you subsequently notice that you have made a mistake on this return, you have a further 12 months, which takes you up to 31st January 2019, to correct the error with an amendment. Our qualified accountants and tax advisors are able to help you complete your Self-Assessment Tax Return and ensure it is correct. We will also help you to reduce your tax bill as much as legally possible. Particularly if you have lots of sources or complicated income, [our experienced accountants and tax advisors can help make sure your tax affairs are handled properly.](https://sg-accounting.co.uk/contact/) **Categories:** Tax --- ### [Being efficient with your tax](https://sg-accounting.co.uk/blog/being-efficient-with-your-tax/) **Published:** February 13, 2018 **Author:** Kerry Newman **Content:** Contractors are known for being hard workers. Thus, you will want to make sure that you don’t have to pay more tax than you legitimately have to. By engaging the services of an experienced contractor accountant who can help you with accounting and tax planning, you will be in the best position to maximise your take-home pay. This article examines how you can make withdrawals from your business that may help reduce your tax burden. ## ![Travelling to your client's office is a legitimate expense](https://sg-accounting.co.uk/wp-content/uploads/2018/02/pexels-photo-298018.jpeg "pexels-photo-298018 | SG Accounting") ## **Claim for legitimate business expenses** Expenses that you incur during the running of your business, that are intended for the sole use of the business, can be offset against the company profits, which in turn reduce your Corporation Tax bill. In order to claim for these expense’s, you must keep accurate records, such as receipts and invoices. The most common types of legitimate business expenses include: **Travel** – you can claim for the mileage you cover travelling to and from your client’s office. You can also include parking and congestions charges as well. Train travel is another big expense a lot of contractors have. **Subsistence** – you can claim for meals and refreshments you purchase whilst working with a client. **Hotel stays** – if you work away for a client you claim for the cost of staying in a hotel or B&B. **Computer hardware and software** – you claim for IT equipment if it is intended for the sole use of the business. **Eye tests** – if you use a computer for work, you may be able to claim for the cost of an eye test. A full list of expenses and rounds around claiming can be found [in our essential guide here](https://sg-accounting.co.uk/guides/expenses-guide/). ## ![Money Calculation](https://sg-accounting.co.uk/wp-content/uploads/2018/01/numbers-money-calculating-calculation.jpg "numbers-money-calculating-calculation | SG Accounting") ## **Payroll and dividends** If you take a salary up to your Personal Allowance (currently £11,500), you won’t be subject to Income Tax. However, you will still be subject to National Insurance Contributions on income above £8,164. You can also withdraw money from the company via dividend payments. Dividend payments can be made after deducting Corporation Tax (currently 19%) from the company’s profits. Using this method of taking a small salary and the remainder via dividends means you generally pay less tax compared to solely taking a salary. Our article, ‘Salaries and dividends – how to make the most out of your limited company’ covers this in further detail. ## **Maximise your company pension money** If you are looking for an easy way to save tax, putting money into a pension scheme is one way of achieving this. Plus, by paying into a pension scheme you helping to secure your own future, for when you do decide to take retirement. Paying into a pension scheme will either reduce Corporation Tax payable on the company profit (and dividend tax on income) or you’ll receive income tax relief on your personal contributions, depending on which scheme you choose. ## ![Businessman sitting opposite, determining IR35](https://sg-accounting.co.uk/wp-content/uploads/2018/02/14929512628_138679d966_b.jpg "14929512628_138679d966_b | SG Accounting") ## **Stay outside IR35** Understanding the complex rules that surround IR35, or the Intermediaries Legislation, as it is often referred to will help you to work as tax efficiently as possible. We discuss IR35 and its impact on contractors in our article ‘[IR35 advice for contractors.](/blog/ir35-advice-for-contractors/)’ **Review your VAT situation** If you are VAT registered, it is advisable to periodically review your VAT scheme. Depending on which scheme you are using, you may be better off using an alternative. This has become more relevant since the changes to the VAT Flat Rate Scheme were introduced on 1st April 2017. ***For further advice and guidance on how to be efficient with your tax, please contact us on 01962 867550, or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Tax **Tags:** Switching - Service --- ### [The Status Determination Statement (SDS) – do you have yours?](https://sg-accounting.co.uk/blog/the-status-determination-statement-sds-do-you-have-yours/) **Published:** April 20, 2021 **Author:** Kerry Newman **Content:** As a Limited Company contractor the IR35 reform has probably played a big part in your year so far, including ensuring you were ready for whatever it had up its sleeve for you. But has your end hirer / client done everything that’s expected of them to ensure you’re looked after from their side? In this blog we explore the importance of the Status Determination Statement, and why you should be provided one by your client. **What is a Status Determination Statement (SDS)?** An SDS is a statement provided by your end-hirer / client that shows you which IR35 status determination they’ve given you, based on your contract and working practices. The statement will display your status, and reasoning behind determining that status. They must provide you with the SDS before you commence work. **What should you do if you haven’t received one yet?** Be sure to ask your end-hirer / client as soon as possible. Whether you’ve already started your contract or you’re about to, it’s now 100% the end-hirer / client’s responsibility to determine your status, and to inform you of that decision. If they’re taking their time, be sure to ask them when you can expect it, and if they need assistance in providing you with one. Alternatively you can share with them our free guide: [IR35 FAQs for Agencies and End Hirers](https://sg-accounting.co.uk/wp-content/uploads/2020/10/SG-Accounting-IR35-FAQs-for-Agencies-and-End-Hirers.pdf) which highlights what the SDS is, and what they need to provide you with. **Why it’s important for you to have your SDS** Without your SDS you won’t know your status, and therefore how to decide whether you’ll continue to contract through your Limited Company, or under an Umbrella Company. You’ll also need to have your SDS if you feel like you’ve been given a wrongful status determination, and wish to challenge it. If you find yourself in this position, our blog covers all the steps you’ll need to challenge your end-hirer / client. **How your accountant can support you** If you decide to challenge your status determination, your SG accountant will be able to help. They’ll provide you with a full IR35 working practice and contract review, and advise on any areas they feel may help to change your status’ determination. They’ll also be able to liaise with your end-hirer / client on your behalf to help demonstrate why they believe your status should be ‘outside’. **How SG Accounting can help** Our team of director-level accountants here at SG are experts in IR35, and provide our clients with unlimited IR35 advice and use of our Umbrella company services at [half price from our sister company](https://sg-umbrella.co.uk/) should you ever need them. Find out more about our IR35 services here, or [get in touch to find out more](https://sg-accounting.co.uk/contact/). **Categories:** IR35, New to contracting, News, Running your business, Tax **Tags:** Kerry Newman --- ### [5 ways to increase your take-home pay ](https://sg-accounting.co.uk/blog/5-ways-to-increase-your-take-home-pay/) **Published:** July 2, 2019 **Author:** Kerry Newman **Content:** One reason why people choose to become contractors is that they can have the ability to earn more than they did as an employee. This is because they can charge higher rates and if they think about how they structure their work (e.g. working through a limited company versus working through an umbrella company) they can limit the amount of tax they have to pay. Contract rates vary per sector and region, but our [research](https://sg-accounting.co.uk/blog/best-paying-contractor-roles/) has shown that those who work in the Finance, IT and Change Management sector are amongst some of the highest earning contractors. If you work in these areas, it’s great news for you! While contracting can give you the ability to earn more money, it isn’t for everyone. There may be extended periods when you are not working because of a lack of contract roles. When you are working, you’ll want to make sure you are taking home the maximum amount of money possible, so you have money spare to cover quiet periods. To help you do this, here are 5 ways you can legitimately increase your take-home pay: ### **Charge what you’re worth** Contractor day rates vary depending on the sector, location of the contract and the demand for that particular skillset. If you’re unsure what the average day rate is for your sector, a recruiter should be able to tell you. Or, jobsites like [Indeed](https://www.indeed.co.uk/), [CV Library](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwiB2POnj83iAhWIse0KHTu7B_EYABAAGgJkZw&ohost=www.google.co.uk&cid=CAASEuRo0EB4wNiKEldgW85-BH5f1w&sig=AOD64_1SG8G_FbOqjqesxCHAtBlOCRQKEg&q=&ved=2ahUKEwjt1u6nj83iAhUCSxUIHbJYBsAQ0Qx6BAgKEAE&adurl=) and specialist recruitment sites like [ITJobsWatch](https://www.itjobswatch.co.uk/) and [EngineeringJobs](https://www.engineeringjobs.co.uk/) often have salary checkers. ![IT contractor.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/chargewhatyourworth.jpg "chargewhatyourworth | SG Accounting") ### **Claim for all the expenses you’re entitled to** Claiming for business expenses can increase your take-home pay as they are offset against your profits which in turn reduces your Corporation Tax bill. However, only legitimate business expenses can be claimed. Our [**Expenses Guide**](https://sg-accounting.co.uk/guides/expenses-guide/) lists what you can claim for as a business expense. Each year millions of business expenses go unclaimed and the reasons for this are because of lost recipients or the hassle that is involved in claiming expenses. However, if you are using a cloud accounting software like Xero or FreeAgent, recording expenses literally takes seconds with their mobile app. ### **Pay yourself a lower salary** It comes as a surprise to some contractors when we say that in order to increase your take-home pay you should be yourself a low salary. The reason behind this is that it reduces your tax liability. We recommend taking a salary of around £8,632 which is the National Insurance primary threshold for the 2019/20 tax year. ### **Pay the remainder via dividends** Most people would struggle to live off a salary of £8,632. But, don’t panic you don’t have to! The most tax efficient way to withdraw money out of your limited company is via dividends. This is because dividend payments aren’t subject to National Insurance Contributions, unlike a salary which is. ![Calculator with money next to it for calculating expenses.](https://sg-accounting.co.uk/wp-content/uploads/2019/02/Calculator.jpg "Calculator | SG Accounting") Most contractor accountants (including us) advise taking a small salary and the remainder via dividends. Our article, **What are dividends and when can they be paid** explains in detail how this works. ### **Review contracts for IR35** If you suspect your next contract will place you inside IR35, you’ll be taxed at source and could end up paying as much as 30% in tax. Therefore, it’s imperative that each contract undertakes an IR35 review. This involves looking at your contract terms and working practices to determine if they are IR 35 compliant. [**Click here**](https://sg-accounting.co.uk/prices/) to find which of our all-inclusive monthly accounting packages include unlimited IR35 reviews. ***Speak to one of our Directors on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/) ***to find out if you’re able to legitimately reduce your tax liabilities.*** **Categories:** Expenses, Guides, New to contracting, Salary/dividends, Tax **Tags:** Switching - Service --- ### [What You Need to Know About Business Asset Disposal Relief](https://sg-accounting.co.uk/blog/what-you-need-to-know-about-business-asset-disposal-relief-badr/) **Published:** November 18, 2025 **Author:** Frances Bridge **Content:** It's essential to understand how Business Asset Disposal (BADR) works, if you're considering or preparing to wind down your business. Known previously as Entrepreneurs' Relief, it can reduce the amount of tax you pay on disposals of qualifying business assets significantly. This blog looks at what BADR does, who qualifies, how you're able to claim and what upcoming changes to be aware of. ## ## Key Takeaways - BADR enables eligible individuals to pay a lower tax rate of 18% on Capital Gains, up to a lifetime limit of £1 million, for qualifying disposals from 6 April 2026 (please note, this was previously 14% prior to 6 April 2026). - To qualify, you generally need to have owned a minimum of 5% of shares and voting rights, for at least 2 years in a trading company. - The claim is then made via the Capital Gains supplementary pages within your Self-Assessment Return. ## Contents ## ## What does BADR do? BADR is designed to reduce the Capital Gains Tax (CGT) rate on certain business disposals. It applies to: - Lifetime gains up to a value of £1 million when you dispose of qualifying assets. - Gains above the £1 million limit are taxed at the standard CGT rates. ### ## Who qualifies for BADR? To claim BADR you must meet several of the following conditions: - You must have owned shares within the company for at least 2 years before their disposal. - You must control at least 5% of the company's shares and 5% of the voting rights throughout those 2 years. - You must also be entitled to at least 5% of either:- - The available profits for distribution and assets on winding up; or - Disposal proceeds if the company is sold. - You must also be an employee or office holder of the company (or of a company from within the same group). - The company must be a trading company (or the holding company of a trading group), and not just investment activities. - If your shareholding falls below 5% due to further issues of shares, you might still be eligible. We'd advise [getting in touch with your Client Director](https://sg-accounting.co.uk/contact/) to discuss further. ### ## What if the company stops trading? You may still be able to claim for BADR, even if your company ceases to trade or [becomes dormant](https://sg-accounting.co.uk/blog/dormant-limited-companies-in-the-uk-rules-tax-implications-and-how-to-stay-compliant/). You’re able to sell your shares within a 3-year period of the cessation of trading. ### ## How to claim the relief Whilst the process of claiming is straightforward, it must be done correctly: - You must claim BADR via the Capital Gains supplementary pages of your Self-Assessment Tax Return. - For any assets sold during the 2025-26 tax year, the deadline to claim is 31 January 2028. ### ## Key considerations and tips - If you decide to close a company and distribute its reserves as a 'capital distribution' ensure that all eligibility criteria are met to avoid it being taxed as a dividend. - Beware of the anti-avoidance rules in place to prevent business owners from gaining unintended tax advantages – for example, if you sell your business and claim BADR, and then decide to start a 'substantially similar business' within a two-year period, HMRC may treat the distribution as a dividend instead. - Ensure to always keep clear records of shareholdings, voting rights, trading status and timings of disposal. All these elements underpin qualification. - [Speak to your Client Director](https://sg-accounting.co.uk/contact/) and seek specialist advice – BADR rules change and any small changes can affect eligibility. ## FAQs ### [What is the lifetime limit for BADR? ](#1acb010c6b348cd4d) You're able to claim BADR for gains up to a lifetime total of £1 million. Any gains beyond this amount are taxed at the standard CGT rate. This is 18% for any element of the gain falling under the higher rate tax threshold and 24% for any element of the gain exceeding the higher rate threshold (total income of £50,270 in the current tax year). ### [When does the BADR tax rate increase? ](#e4bc2849763cad485) The rate will increase from 14% to 18% for disposals on or after 6 April 2026. ### [Do you need to have owned at least 5% of the company to claim? ](#15355894d71726fe7) Yes, you'll need to own at least 5% of shares and 5% of voting rights for a continuous period of two years before disposal. ### [Are you able to claim BADR if the company has stopped trading? ](#df04e5b2154a838e3) Yes, provided you dispose of your shares within three years of the date the company ceased to trade, you may still qualify. ## Final Thoughts If you ever decide to sell or shut down your business, understanding how BADR works is essential. With the correct planning in place BADR can reduce your tax liability significantly, especially given the upcoming change in tax rate in 2026. However, eligibility is conditional on precise criteria around ownership, trading activity, and timing. Don't ever leave it to chance, ensure you discuss your plans surrounding BADR with your [Client Director](https://sg-accounting.co.uk/contact/) for complete clarity. If you're ready to take the next step, get in touch to assess your eligibility and plan your disposal strategy. Frances Bridge Client Director Frances joined us in February 2024, and is part ACCA qualified. Since becoming an accountant in 2012, she particularly enjoys building relationships with her clients, and helping them make the most of their finances. In her spare time she enjoys travelling the world and spending time with her son George. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/frances-bridge/) [LinkedIn](https://www.linkedin.com/in/frances-bridge-b5654ba/) **Categories:** News, Running your business, Tax **Tags:** Frances Bridge --- ### [Trivial Benefits for Limited Companies: Tax-free gifts and employee rewards](https://sg-accounting.co.uk/blog/trivial-benefits-for-limited-companies-tax-free-gifts-and-employee-rewards/) **Published:** May 21, 2026 **Author:** Niamh Potter **Content:** If you're a director of a Limited Company, there may be times when you want to give a gift to your employees, or yourself as a director, without creating a tax liability. Trivial Benefits are a simple, tax-efficient way to reward your team or directors, but there are strict rules you must follow. In this guide, we explain what Trivial Benefits are, how they work, and what qualifies for tax relief. In this blog we break down the options for the 2025/26 tax year, including flat-rate allowances and actual cost calculations for understanding how much you're able to claim and the methods available that can help reduce your tax bill. ## Key takeaways - Trivial Benefits are small gifts exempt from tax and National Insurance - Benefits must cost £50 or less per person (£300 per director per tax year) - Cash, cash vouchers, or contractual benefits do **not** qualify - Corporation tax relief and VAT recovery may apply - Correct application ensures compliance and rewards employees efficiently Sorry, your browser doesn't support embedded videos. ## Contents ## What are Trivial Benefits? A Trivial Benefit is a tax-free gift that's not subject to National Insurance Contributions (NICs), gifted from a UK Limited Company. These can be given occasionally to directors or employees of a Close Company, so long as certain criteria are met. ### Understanding a Close Company A Close Company is: - A Limited Company with a maximum of 5 shareholders, or - Any number of shareholders that are also directors Trivial Benefits rules only apply if your company qualifies as a Close Company. ## Rules for Trivial Benefits To qualify as a Trivial Benefit, the gift must: - Cost £50 or less per person (with a £300 cap per director per tax year) - Not be cash or a cash voucher - Not be an ongoing cost (such as a gym membership) - Not be contractual, so it cannot be part of an employee's formal entitlements - Not be rewarded for professional achievement, so it cannot replace a bonus or performance award When these conditions are met, the benefit is exempt from tax and does not need to be declared on a P11D form. ## Tax relief on Trivial Benefits If your gift meets the criteria: - Your company can claim corporation tax relief on the [expense](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) - Personal tax is not applicable for directors or employees - VAT can also be reclaimed, so long as your company is not on the Flat Rate VAT scheme Trivial Benefits are therefore a cost-effective way to reward staff without creating a tax burden. ## Examples of Trivial Benefits Typical Trivial Benefits include: - Birthday gifts such as a bottle of wine or box of chocolates - Work anniversaries: restaurant vouchers (non-contractual) - Christmas gifts: hampers - Team events: summer BBQs - Special occasions: baby or wedding gifts Each benefit must be £50 or less and non-contractual. ## What does not qualify as a Trivial Benefit? Benefits that do not qualify include: - Cash or cash equivalents - Exchangeable gift cards - Any item over £50 - Regular or contractual perks (such as a weekly takeaway) - Childcare costs - Bonuses - Company cars - Health insurance, travel, or entertainment expenses Following these rules ensures compliance with HMRC regulations. ## FAQs ### [What is a Trivial Benefit?](#79b4d7ec2348e8a88) A small, tax-free gift a Limited Company can give to directors or employees of a Close Company, up to £50 per person. ### [Can directors receive Trivial Benefits?](#7d8e92d16c0ff53c5) Yes, but there is a £300 annual cap per director. ### [Can a gift card count as a Trivial Benefit?](#f1c1528e7e8daca5f) So long as it cannot be exchanged for cash. Cash or cash-equivalent vouchers do not qualify. ### [Do Trivial Benefits count towards personal tax?](#ee69cfe3e237396a0) No, provided they meet the HMRC rules, they are exempt from tax and National Insurance. ### [Can the company reclaim VAT on Trivial Benefits?](#48818af4ef0a16b56) Yes, if the gift qualifies as a Trivial Benefit and your company is not on the Flat Rate VAT scheme. ## Final thoughts Trivial Benefits are a simple, tax-efficient way to reward your employees or directors, but only if used correctly. If you're unsure which gifts qualify or how to apply the rules, your SG Accounting Client Director is here to help. 📞 Call: 01962 867550 📩 Email: <enquiries@sg-accounting.co.uk> Reward your team and stay compliant, get personalised advice today. Niamh Potter Client Director Niamh joined the team in December 2018, starting out with no prior accountancy experience and working her way up through the business over the years. She now supports clients in her role as Client Director at SG, alongside preparing year-end accounts. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/niamh-potter/) **Categories:** Expenses, limited company, Running your business, Tax, VAT **Tags:** Niamh Potter --- ### [Can a limited company loan money to another limited company?](https://sg-accounting.co.uk/blog/loaning-money-to-another-company/) **Published:** March 25, 2019 **Author:** Kerry Newman **Content:** If you operate as a contractor through your own limited company, you may be asked, or you may want to loan money from your limited company to another. It may be the company asking for the money is a start-up and they need extra cash to get the venture off the ground. Or, the company may need to purchase an expensive piece of equipment and they don’t have the money to fund it themselves. If you’re in the position to make the loan, it’s important to understand if this allowed and if so, what tax implications (if any) this has. ## **Are loans between limited companies allowed?** ![man in suit with thumbs up.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/thumbsup.jpg "thumbsup | SG Accounting") The good news is, that loans between limited companies are allowed. However, the loan is only allowed if the company making the loan has sufficient funds to cover any liabilities that may arise during the period that the money is outstanding. ## **Why loan money from a limited company?** Some companies prefer to loan money from another limited company instead of a bank, particularly if they need access to the money quickly, as organising a bank loan can be a lengthy process. ## **What should a loan agreement include?** ![Hands signing agreement.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/Signing_document.jpg "Signing_document | SG Accounting") A loan agreement is a document that details the specifics of the loan. A typical loan agreement contains details of the lender, the borrower, the amount to be loaned, the start date of the loan, repayment date and if the loan is be paid through instalments or in a lump sum. It may be tempting to write this yourself, but if for any reason, the borrower defaults on the loan, you want to ensure that you’ve covered everything in the agreement, so you can get the money back. For that reason, we strongly advise that you engage the services of a solicitor to assist you. ## **Interest on the loan** The draw for many companies to loan money to another limited company is that the rate of interest that is applied is much lower than that of a bank loan. Interest on a loan between two limited companies is charged at 3% above the Bank of England’s interest rate. Whilst, on average a bank charges around 7.5% interest on a business loan. ## **Are there tax implications in making the loan?** The loan is not treated as a business expense, therefore it does not reduce your Corporation Tax liability. The money you earn from the interest on the loan is classed as income and will be taxable. When lending funds, it is important to consider that the trading status of the company may be affected and therefore restrict any future intentions on using entrepreneurs relief. ***As you see, loans that are made between limited companies is an extremely complex area of tax and it’s vital that you seek professional guidance. Our directors are on-hand to offer advice and to guide you through the process. Give us a call on 01962 867550 to arrange a time to chat, or if you prefer you can send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance --- ### [SG Accounting announced as a finalist in this year’s Contracting Awards](https://sg-accounting.co.uk/blog/sg-accounting-announced-as-a-finalist-in-this-years-contracting-awards/) **Published:** July 9, 2026 **Author:** Jen Winslow **Content:** SG Accounting has been announced as a finalist in this year’s [Contracting Awards](https://www.contractingawards.co.uk/shortlist-2026) in the Best Contractor Accountancy (1,000 – 3,000 clients) category. We’re so pleased that our commitment to delivery nothing but the highest level of quality, compliance and contractor-focused accountancy services has been recognised for another year. This announcement follows last year’s success, where SG was awarded runner-up at the Contracting Awards 2025, further demonstrating our consistent contractor focused accountancy services. ## Continued recognition for accountancy excellence Being recognised once more highlights SG’s dedication to providing the contracting community with clear, proactive and reliable accountancy services. From supporting contractors and freelancers with setting up their company to providing specialist tax guidance, SG’s team continues to deliver the highest standards business owners expect and deserve from an award-recognised accountant. ## Why this nomination matters The Contracting Awards celebrate the top providers in the contracting and recruitment sector, making this nomination a direct reflection of contractor satisfaction and trust. ## A message from SG Accounting’s Director, Kerry Newman “We’re thrilled to be shortlisted once again. The SG team puts a huge amount of care into delivering friendly, compliant and reliable support for our clients, and it’s incredibly rewarding to see that reflected in this year’s nomination.’’ ## Discuss your contractor accounting needs with SG If you’re looking for a specialist accountant with award‑recognised service, SG Accounting offers clear guidance, compliant processes and a smooth onboarding experience. Whether you’re new to contracting or ready to move from your current accountant, the team is here to help. [Get in touch](https://sg-accounting.co.uk/contact/) to find out how SG can support you and your business. **Categories:** limited company, News --- ### [How to Tell if You Are Inside or Outside IR35](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** Understanding whether you’re inside or outside [IR35](https://sg-accounting.co.uk/blog/what-is-ir35/) isn’t about memorising tax law – it’s about recognising how your working relationship actually looks in practice. HMRC focuses on what you do day to day, not what your contract says on paper. Knowing the signs helps you have informed discussions with clients and agencies, but it’s important to remember that you don’t make the final call. Under current rules, the end client is legally responsible for deciding IR35 status and issuing a Status Determination Statement (SDS). Your goal is to understand the factors, recognise how they apply to you, and [spot potential issues early](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) – even though you may not have the power to change the final outcome yourself. ## ## Key Takeaways - IR35 status depends on how you actually work day to day, not just what your contract says - The three main IR35 tests are control, substitution, and mutuality of obligation – together they determine if your role is truly independent - The end client is legally responsible for deciding your IR35 status and issuing a Status Determination Statement (SDS) - You can influence your IR35 position by clarifying project scope, defining deliverables, and maintaining genuine independence from the client - If you disagree with an SDS, you can formally challenge it in writing and the client must respond within 45 days ## Contents ## Quick Checklist – Are You Inside or Outside IR35? If these situations sound familiar, your contract is probably inside IR35: - You work the same hours as permanent staff and take direction from a manager - You must request time off or report sickness through the client’s system - You use the client’s equipment, processes and policies - You’re part of internal meetings, reviews and performance discussions - You can’t send anyone else to do the work – the client expects you personally - The role feels ongoing rather than project-based If these feel closer to your reality, you’re probably outside IR35: - You decide how, when and where to deliver the project - You invoice for defined deliverables rather than time worked - You could send a qualified substitute if needed - You supply your own tools or systems - You’re not embedded in internal management or HR processes Remember that these are only indicators. They help you understand how HMRC and your client might view the engagement, but the official decision still sits with the end client. ## The Three Core IR35 Tests Explained ### Control – Who Directs the Work? HMRC asks who decides how the work is done, where it’s carried out and when. If the client dictates your daily routine, supervises tasks or can move you between projects, that looks like employment. If instead you set your own schedule and delivery method, for example choosing your tech stack or work plan, that shows independence. ### Substitution – Could Someone Else Do It? A genuine business can send another suitably qualified person to deliver the service. If your contract allows substitution and the client would realistically accept it, that supports an outside IR35 position. If the client insists only you can perform the work, it suggests they value your labour rather than a business service. ### Mutuality of Obligation (MOO) – Is There Ongoing Work Expected? Employees are expected to keep accepting work, and employers must keep providing it. Independent contractors, by contrast, deliver a defined piece of work and can walk away once complete. If the client expects you to stay indefinitely or keeps offering tasks without a new agreement, HMRC may view the relationship as employment-like. Remember, these tests explain how status is assessed – they don’t mean you can decide it yourself. The client will apply (or sometimes misapply) the same principles when they issue your SDS. ## Working Practices vs Contract Wording Many contractors believe a carefully written contract will protect them, but IR35 decisions hinge on what happens in real life. Even if a contract says you have control and substitution rights, those clauses mean little if, in practice, you follow the client’s hours, attend daily stand-ups and have no real autonomy. HMRC gives far more weight to behaviour and working culture than to legal phrasing. That’s why you can see two contracts with identical wording assessed differently – because the clients run them differently. ### Common Mismatch Example - On paper: “The contractor may determine their own hours” - In practice: The client expects 9-to-5 attendance and requires advance notice for time off. Therefore, the result will likely be inside IR35, regardless of what the clause says. For most contractors, spotting these mismatches early, before onboarding, is the best way to avoid surprises later, even though the client still owns the final determination. ## Recognising IR35 Patterns in Real Life If you’ve already reviewed the checklist above, you’ll have a sense of which side your current contract sits on. In practice, most engagements show a mix of indicators – a few points that look independent and others that look employment-like. This overlap creates the grey areas that cause uncertainty for both contractors and clients, and it’s why understanding the tests matter even though the final decision rests with your client. When the evidence is mixed, most organisations [err on the side of caution](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) because they carry the tax risk if HMRC later challenges their decision. ## What You Can Realistically Influence While you can’t issue or override the SDS, [you can influence how the engagement is shaped before onboarding](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/): - Clarify scope early ask whether the work is project-based or time-based - Define deliverables – make sure outcomes, not daily tasks, are in the statement of work - Discuss autonomy – explain how you normally deliver and agree boundaries that reflect independence - Avoid employment-style perks – decline staff benefits or allowances that imply you’re part of the workforce These steps don’t guarantee an outside determination, but they help clients see a legitimate business-to-business arrangement. ## What if You Disagree With Your Client’s IR35 Decision? Under the off-payroll working rules, the end client must provide a Status Determination Statement (SDS) explaining whether a role is inside or outside IR35 and the reasons behind that view. If you disagree, you have the right to raise a formal disagreement through the client’s internal process. 1. **Submit your challenge in writing** – reference the SDS and explain why you believe it’s incorrect – for example, that you have genuine control or substitution rights 2. **Provide evidence** – keep it factual and professional: outline specific clauses, working practices or previous assessments that support your view 3. **Wait for a written response** – the client is legally required to reply within 45 days, either confirming their original decision or issuing a revised SDS Be aware that this isn’t an appeal to HMRC – it’s a client-led review. Many contractors choose not to escalate because the relationship or renewal prospects matter more than the tax distinction. Still, it’s worth using the process if you believe the evidence strongly supports an outside position or if the SDS reasoning seems incomplete. ## Glossary of Common IR35 Terms ### [IR35](#a46f26d6c4812c719) UK tax legislation determining whether an engagement is employment-like for tax purposes. ### [Inside IR35](#b3cd4f5f2c8d2970d) The role is treated as employment for tax – income is subject to PAYE. ### [Outside IR35](#cae3ba3461fddf366) The role is a genuine business-to-business service; payment is made gross to your company. ### [SDS (Status Determination Statement)](#db634fd99a9f5f158) A written document from the end client explaining the IR35 decision and reasoning. ### [Control](#62de0d12343ded4fa) Who decides how, when and where the work is done. ### [Substitution](#bbb9257ffcc83cb45) Whether someone else could reasonably perform the service on your behalf. ### [Mutuality of Obligation (MOO)](#c056aba9a9a2b6653) Whether both sides are obliged to offer and accept continuing work. ### [End Client](#899065612f100f535) The organisation receiving the services and responsible for the IR35 assessment. ### [Umbrella Company](#ae705c4d4a98654e3) An employer-of-record structure that pays contractors through PAYE for inside IR35 roles. ## Final Thoughts Understanding how IR35 decisions are made helps you read the signs and discuss them confidently, even though the final call always rests with your client. Knowing where your role sits lets you plan how you’ll work – through your Limited Company for outside IR35 engagements, or via a compliant umbrella arrangement when a client places you inside IR35. At SG Accounting, we help contractors on both sides of IR35 – from explaining SDS decisions to providing simple umbrella solutions when required. If you’d like to talk through a current engagement or get clarity on a client’s determination, our team is happy to help. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by Drazen Zigic – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [What Is IR35?](https://sg-accounting.co.uk/blog/what-is-ir35/) **Published:** June 30, 2026 **Author:** Kerry Newman **Content:** As a contractor, how you are taxed depends on how HMRC views the nature of your engagement – not just how you view it, or even how the agency or client describes it. IR35 is the legislation that governs this. It is used to determine whether you are working as a genuinely independent contractor through your Limited Company, or whether the engagement is closer to employment for tax purposes. This guide explains IR35 in plain English, clarifies what it means in practice, and outlines what you can and cannot influence during the process. It also shows how you can continue to operate through your Limited Company where appropriate, while still having a compliant structure in place for inside IR35 roles. ## ## Key Takeaways - IR35 decides how a contract is treated for tax purposes – not whether you are a contractor - Status is assessed per engagement, not per person, so it can change between roles - The client normally decides whether a role is inside or outside IR35, not the contractor - Working practices matter more than contract wording – HMRC look at what happens in reality - If a role is inside IR35, tax is usually paid through PAYE before income is released - You can still keep your Limited Company even if one or more roles are inside IR35 - Many contractors use an umbrella structure for inside IR35 roles for simplicity and compliance ## Contents ## What IR35 Is and Why It Exists ### What Is IR35? IR35 is tax legislation that determines whether HMRC treats a contractor as self-employed for a specific engagement or as a “deemed employee” for tax purposes. If you are outside IR35, the engagement is considered a genuine business-to-business service, and you can operate through your Limited Company. If you are inside IR35, the role is treated like employment for tax purposes, and income is usually taxed through PAYE. ### Why Was IR35 Introduced? IR35 was introduced to prevent what HMRC considers “disguised employment” – situations where an individual works in the same way as an employee but is paid as if they were a contractor to reduce tax and National Insurance. The legislation was designed to ensure consistency in tax treatment where the working arrangement resembles employment rather than consultancy. ### How Does HMRC Interpret “Genuine Business” vs “Employment”? HMRC looks at the overall nature of the relationship, not just the contract. The key question is whether the contractor is delivering a service, or performing a role within the organisation. If the contractor is treated as part of the team, follows the client’s working patterns, and is managed like an employee, HMRC is more likely to view the arrangement as inside IR35. ### Why IR35 Matters in Practice IR35 doesn’t change your professional status – but it changes how you are taxed and how the engagement is structured. That is why two contractors performing similar work can be taxed differently depending on how their engagements are set up. ### A Contractor Example James, an experienced IT consultant, joined a large transformation project. The contract suggested autonomy, but in practice he was required to follow internal processes, attend daily team meetings and work to fixed hours alongside permanent employees. When the client reviewed the engagement, it was placed inside IR35 based on working practices. He chose not to contest it and used an umbrella arrangement for this assignment while retaining his Limited Company for future outside IR35 work. ## How IR35 Status Is Determined ### What Does IR35 Actually Test? [IR35 status is based on the working reality of the engagement](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) – how the contractor operates day to day. HMRC applies a series of tests that look at whether the contractor is functioning as a business, or as part of the client’s organisation. ### What Are the Main Status Factors HMRC Look At? The most influential factors are: - Control – Who decides how, where and when the work is done? - Substitution – Is the work personal to you or can your limited company send someone else to work on the project? - Mutuality of obligation – Is there an expectation of ongoing work beyond deliverables? These tests are explored in much more detail in our supporting blog posts, but at a high level, the more an engagement resembles employment in practice, the more likely it will fall inside IR35. ### Why Do Working Practices Matter More Than the Contract? Even if a contract contains strong “outside IR35” clauses, if day-to-day working conditions look like employment (for example, fixed hours, direct supervision, or mandatory internal processes), the engagement can still be viewed as inside IR35. HMRC give more weight to behaviour and structure than wording. ### What Else Can Influence the Status? Secondary indicators can also play a role, such as: - Whether you bear financial risk or are simply paid for time - Whether you are integrated into the client’s organisation - Whether you provide your own tools/resources - How much autonomy you have over delivery These are not decisive individually, but together they shape the [overall picture of the engagement](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/). ## What Happens if You Are Inside IR35 ### What Does “Inside IR35” Mean? When a contract is inside IR35, the engagement is treated as employment for tax purposes only. You are still a contractor, but HMRC requires the income to be taxed in a similar way to salary before it is paid to you, typically through PAYE. ### How Does Payment Work Inside IR35? Instead of receiving gross payment into your Limited Company and then deciding how to extract income, deductions such as income tax and National Insurance are applied upfront. This usually reduces take-home pay compared with an equivalent outside IR35 contract. ### Can You Still Keep Your Limited Company? Yes, if you are caught by IR35 and decide to use an umbrella company rather than your limited company for the contract, your company does not need to close or become inactive. Many contractors [continue operating through their company](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/) on other roles while working through an umbrella company on an inside IR35 contract. ### Why Many Contractors Use Umbrella Arrangements For inside IR35 roles, a large number of contractors choose to be paid through an umbrella arrangement instead of through their limited company because it streamlines PAYE deductions and removes administration. This isn’t mandatory in all cases, but it is often the most practical route. ## What Happens if You Are Outside IR35 ### What Does “Outside IR35” Mean? When a role is assessed as outside IR35, HMRC recognises the engagement as a genuine business-to-business service. You are treated as self-employed for tax purposes and can operate through your Limited Company without the need for your income to be taxed as salary. This means you are able extract dividends instead. ### Why Outside IR35 Roles Provide Greater Flexibility Outside IR35 means you have more control over how you deliver the work, reflecting autonomy rather than employment. You can choose how to structure your income, which is normally more tax-efficient than PAYE. This is why many contractors prefer outside IR35 engagements where the working model genuinely supports it. ### What Does a Typical Outside IR35 Engagement Look Like? Outside IR35 engagements normally involve a defined scope of work, greater independence in delivery, and less integration into the organisation’s internal management structure. The client is purchasing an outcome or service, not time or labour. ### Can a Role Stay Outside IR35 if Working Patterns Shift? If working practices begin to resemble employment – for example, fixed supervision, mandatory hours or integration into permanent teams – [the status can change from outside to inside IR35](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/). For this reason, ongoing working style is as important as the contract itself. ## Who Makes the Decision and What Contractors Can Influence ### Who Decides IR35 Status? Under the current legislation, the decision is primarily made by the end client, usually documented in a Status Determination Statement (SDS). The contractor is expected to comply with this outcome. ### What Can Contractors Influence? [Contractors typically have the most influence before onboarding begins](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) – during early conversations about scope, deliverables and autonomy. Once the client has defined the role internally, there is usually limited scope to adjust it. ### Why Clients Default To Caution [Many organisations take a cautious stance on IR35](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) because they carry the financial liability if the status is challenged and later found to be incorrect. Since the 2021 reforms, it is the client – not the contractor – who HMRC will pursue if a role has been wrongly treated as outside IR35. This can lead to backdated tax bills, interest and penalties. Because of this risk exposure, [some clients choose to classify a role as inside IR35 even if it could potentially be structured outside](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/), simply because it removes the possibility of future liability. The decision is often a risk-management step rather than a judgement on the contractor’s working style or professionalism. ### Can Status Decisions Be Challenged? There is a dispute process, but it is handled by the same client that made the original determination. While challenges are possible, most contractors choose not to escalate because they do not want to jeopardise the engagement or the client relationship. ### The Practical Reality In practice, IR35 outcomes are often shaped by [how the client chooses to structure the role](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/), rather than how the contractor views it. This is why many contractors focus on making sure they have the [right working model in place from the outset](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) of each new engagement. ## FAQs ### [Is IR35 about tax or employment rights?](#7f39431ffc06beb93) IR35 is only about tax. Inside IR35 roles do not create employment rights unless you are employed by another structure such as an umbrella. ### [Do I need to close my Limited Company if I am inside IR35?](#83a222d87044381b2) No, your company can remain open. You could operate the contract caught by IR35 through your limited company, as long as you pay the correct PAYE tax and National Insurance. This does add an administration burden for the contractor and end client which is why many contractors decide to use an umbrella company instead. Either way, you can keep your limited company open for other roles. ### [Can a contract move from inside to outside IR35 later?](#41844b34d2b797383) It can, but only if working practices change in a way that demonstrates genuine independence. ### [Who issues the Status Determination Statement?](#3258ae1c971806b2c) The end client usually issues the SDS, sometimes with involvement from the agency. ### [Do I have to use an umbrella if I am inside IR35?](#de92d8416d32f3d38) Not always, in many cases you can still use your limited company but many contractors choose umbrella because it simplifies the process. ### [Is being inside IR35 the same as being an employee?](#5c00f949bab2c8648) No. You are taxed like an employee for that engagement, but you do not gain employee benefits or rights. ## Final Thoughts IR35 affects how each engagement is structured and how income is processed, but it does not define your capability or professionalism as a contractor. Many people now move between inside and outside IR35 roles depending on the client, project and working practices. One contract does not set your long-term status. The key is having the right structure in place for whichever outcome applies – and knowing what options are available if circumstances change. At SG Accounting, we support contractors on both sides of IR35: - When outside IR35, helping you operate efficiently through your Limited Company - When inside IR35, providing a compliant, straightforward alternative via an umbrella arrangement if required If you’d like guidance on your current contract or future engagements, we’re here to help you choose the route that best fits your working model. Kerry Newman Director of SG Accounting Kerry joined SG back in July 2017, and is MAATQB qualified, and currently working towards her ACCA. Specialising in contractor accounting for 10 years, Kerry has always been an accountant, and has spent most of her career focusing on the needs of small business and contractors. [See Full Bio](https://sg-accounting.co.uk/blog/author/kerry/) [LinkedIn](https://www.linkedin.com/in/kerry-newman-1bb3a2139/) (Header image: *designed by Drazen Zigic – Freepik.com*) **Categories:** News **Tags:** Kerry Newman --- ### [Can I reclaim expenses from before I formed my limited company?](https://sg-accounting.co.uk/blog/expenses-prior-to-forming-limited-company/) **Published:** March 11, 2019 **Author:** Kerry Newman **Content:** If you spent money on setting up your business before you incorporated it, you may be able to claim for some or all of these pre-trading expenses, as long as they are legitimate business expenses. This article looks at what is involved in claiming pre-trading costs. ## **The expenses must be legitimate** We’ve talked extensively about legitimate business expenses, as only those [expenses](https://sg-accounting.co.uk/guides/expenses-guide/) which have been incurred ‘wholly, exclusively and necessarily for the business’ can be claimed for. So, if you purchase a piece of equipment, like a laptop, and you use it for personal things, you won’t be able to claim for it as its classed as having a dual purpose. ![Man sat at laptop.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/mansatatlaptop.jpg "mansatatlaptop | SG Accounting") ## **What you can claim for** Here is a list of some of the pre-trading costs you are allowed to reclaim: - Professional fees – cost of the services of an accountant and / or solicitor - Business insurance – for example professional indemnity insurance - Stationary – printing, postage etc - Travel costs – if instance, the cost of the train fare to visit a client - Phone bills – the identifiable costs itemised separately on your phone bill - Equipment – as long as it solely used for the business Something that is missing from this list is the company formation cost. This is because it is classed as a one-off capital cost. However, if you paid for it personally, as the director of the limited company you can reimburse yourself. It is important to remember that there can be quite a lot of rules regarding [expenses](https://sg-accounting.co.uk/resources/guides/expenses-guide/), so it would be best to speak to an accountant before you claim any expenses if you are unsure. ## **What’s the catch?** This is what many contractors say to us when we tell them they can claim for pre-trading costs. What we say to them is that as long as they are legitimate business expenses and they don’t date back any further than seven years from the date of incorporation, there aren’t any catches. Of course, any expense claims must be supported by receipts that prove how much you paid and the date of the purchase. So, keeping organised records is vital. ![Files of receipts that need to be kept to claim expenses.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/Filesofpapers.jpg "Filesofpapers | SG Accounting") ## **Why claim for pre-trading costs?** As these expenses are deemed as being incurred on the first day of trading, you can offset them against your turnover for Corporation Tax purposes, and such reduce your Corporation Tax liability. ## **I’m VAT registered. Can I claim for this as well?** This is another question we frequently get asked. The answer is yes but the period in which you can claim is much shorter. There is a four-year limit from the date of trading for claiming back VAT that you’ve paid for goods for the business. Whilst, there is a six-month limit for claiming back VAT on services. Again, it’s important that you keep copies of all your receipts and that these receipts show details of the VAT paid and the items should be still being used in the business. ***Before you start rummaging through draws or cupboards for receipts, speak to an accountant who is experienced in this area. One of our directors will be happy to answer any questions you may have about claiming pre-trading costs. Give us a call on 01962 867550 to arrange a time for an informal chat.*** **Categories:** Expenses, New to contracting **Tags:** Switching - Service --- ### [Getting a mortgage as a self-employed contractor](https://sg-accounting.co.uk/blog/getting-a-mortgage-as-a-self-employed-contractor/) **Published:** February 18, 2019 **Author:** Kerry Newman **Content:** Owning a home is a dream for many of us, but if you work as a self-employed contractor, you may have seen first-hand how tricky it can be to obtain a mortgage. That’s because mortgage lenders want to ensure you can afford the mortgage repayments before they lend you the money. And, as your income can fluctuate month on month, this makes mortgage lenders nervous. However, as the number of self-employed contractors and freelancers continues to rise (particularly in sectors like IT), mortgage lenders are relaxing their requirements. ![Key in door of new home with mortgage.](https://sg-accounting.co.uk/wp-content/uploads/2019/02/Keysindoor.jpg "Keysindoor | SG Accounting") This article looks at what is involved in applying for a mortgage as a self-employed contractor. ## **The process of applying for a mortgage** Now that you’ve found your dream home, you’ll be keen to get the mortgage sorted so you can proceed with the purchase. But, it’s important to understand that this process can’t be rushed. The mortgage lender will first need to assess your suitability for a mortgage. This involves reviewing your: - Income - Expenses - Income security ### Calculate your income If you were an employee, your income would be fairly consistent across the year. However, as a self-employed contractor, your income can fluctuate, unless you’re working on a long-term contract. The mortgage lender will try to calculate an average of your income, by looking at what you’ve earned over a specified length of time. The minimum period they will use is six months, but some lenders will go back as far as two or three years. Some lenders may be willing to calculate this using your day rate e.g. day rate X number of days worked per week X number of weeks worked per year (some lenders may automatically apply a period of 48 weeks per year to take into account holidays and time between contracts). ### Detailing your expenses? The mortgage lender will ask for details of your monthly expenses and proof of these, either through a copy of bank statements and, or credit card statements. Some lenders may require six months’ worth of statements, whilst others may ask for statements dating back longer. ![Calculator with money next to it for calculating expenses.](https://sg-accounting.co.uk/wp-content/uploads/2019/02/Calculator.jpg "Calculator | SG Accounting") ### How do lenders assess my income security? Many lenders take the view it’s risky lending money to self-employed contractors, because of the instability around your income. So, you may find that your application gets referred to an underwriter. This is someone who looks at your income, expenses and credit score amongst other things to assess the level of risk involved with lending you the money. We advise contractors who are applying for a mortgage to provide as much information as possible. Your accountant can be a great source of support at this time, as they can provide accurate and update to information on your income. **Note of caution**: If you’re a contractor working through a limited company, the process lenders use to calculate your income may differ slightly. Most lenders will only consider your salary plus any dividends you have taken, instead of looking at your total earnings. As most contractors use the system of taking a small salary and the remainder via dividends, this can reduce the amount of money the provider is willing to lend. If you find yourself, in this situation, it can be beneficial to use an Independent Financial Advisor (IFA) or Mortgage Broker, who can search the market to find a lender that is sympathetic to contractors. ***Over the 20 plus years, we’ve been working with contractors, we’ve built up close working relationships with IFA’s and Mortgage Brokers, and we’d be happy to recommend some to you. Give us a call on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance --- ### [What is Making Tax Digital?](https://sg-accounting.co.uk/blog/making-tax-digital-were-ready-are-you/) **Published:** April 17, 2025 **Author:** Laura Hepworth **Content:** Making Tax Digital (MTD) is no longer just a passing comment or consideration of HMRC’s. It’s imminent, and now is the perfect time to ensure we’re all ready. In this blog we explore what MTD actually is, how SG Accounting are preparing for the upcoming changes, and how we can help you. ## What is Making Tax Digital? [Making Tax Digital (MTD)](https://www.gov.uk/government/collections/making-tax-digital-for-income-tax) is a central part of the government’s Tax Administration Strategy, designed to modernise the UK tax system. Its aim is to reduce the tax gap by requiring businesses and individuals to: - Keep digital records - Use compatible software to manage their tax affairs - Submit quarterly updates, bringing the tax process closer to real-time ## Making Tax Digital for Income Tax MTD for VAT was introduced on 1 April 2019 for VAT-registered businesses to improve the accuracy of tax reporting, reduce human errors, and modernise the UK tax system. HMRC aimed to create a more efficient and transparent system that makes it easier for businesses to get their taxes right. This initiative has now been extended to **MTD for Income Tax from 6 April 2026**. ## What’s happening and when? HMRC will soon start communicating with affected taxpayers about the upcoming changes. ### Here’s what you need to know: **April 2025:** Sole traders and landlords with relevant income can voluntarily start providing updates and implementing digital processes ahead of the mandatory deadline. We will be inviting a cross-section of clients to be part of this beta testing and helping us to navigate the new legislation. **April 2026:** MTD becomes mandatory if you are self-employed or a landlord and have an annual business or property income of more than £50,000 **April 2027:** The threshold lowers to £30,000. It is expected that around 780,000 people with business or property income over £50,000 will join the MTD for ITSA service from April 2026, with a further 970,000 joining from April 2027. ### How will this affect you? 1. **Digital Record-Keeping** You will need to keep financial records digitally using MTD-compatible software. This means moving away from manual spreadsheets or paper records. 2. **More Frequent Submissions** Instead of submitting just one annual self-assessment tax return to declare your year’s income and [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/), you will also need to submit quarterly updates to HMRC. This means you will need to stay on top of your bookkeeping more regularly throughout the year. 3. **Compliance requirements** MTD introduces more stringent compliance rules, including digital links between systems. You will no longer be able to copy and paste figures between spreadsheets and instead need the appropriate systems in place that talk to each other in a compliant way. ## How we can help you As we move through the testing phase and up until April 2026, we’re continuing to build our expertise around the new legislation. As your trusted accountants, we’re still here to support you every step of the way with Making Tax Digital. We understand that adapting to new digital tax requirements can feel overwhelming, but our priority is to make the transition as smooth and stress-free as possible. Whether you need help choosing the right software, understanding submission deadlines, or ensuring your records meet HMRC’s standards, your SG Client Director is here to provide expert guidance and practical solutions tailored to your business. Let us take the complexity out of MTD so you can focus on what you do best – running your business. [Get in touch](https://sg-accounting.co.uk/contact/) if you have any questions, or want to discuss MTD in greater detail. **Categories:** limited company, Making Tax Digital, Running your business, Tax --- ### [What do your Limited Company’s annual accounts show you?](https://sg-accounting.co.uk/blog/what-do-your-limited-companys-annual-accounts-show-you/) **Published:** August 18, 2025 **Author:** Kerry Newman **Content:** As a director of your limited company you’re no doubt well-rehearsed in submitting your annual accounts every year. But what do these accounts show, not just to HMRC and Companies House, but you also as the business owner? This blog takes a closer look at what your annual accounts include, why they matter, and how you can use this information to have a deeper understanding of your account’s health and overall performance of your business. ## What are annual accounts? Your company’s annual accounts (or statutory accounts as they’re sometimes called) are a snapshot of your company’s current financial position, at the end of your company’s financial year. You’ll still need to prepare and submit your annual accounts each year, even if your company hasn’t traded during that year. Your annual accounts will show: - What your company owns - What it owes - How much profit or loss it has made - The amount of tax it owes - It’s financial position – healthy or otherwise ## What’s included in your annual accounts? Below is a breakdown of what you’d typically find in your limited company’s annual accounts: ### 1. Your balance sheet Displays your company’s assets (what it owns), your company’s liabilities (what it owes), and shareholder equity (what’s available to your company’s shareholders). The key things in your balance sheet are: - How much cash is in the bank - If you have any outstanding debts - Any money that’s owed to your business (debtors) - The total amount of Corporation Tax that’s due - The overall net worth of the business When your business’ balance sheet is positive and growing year on year, it’s a good sign that it’s healthy and building value. ### 2. Profit and loss statement (P&L) Your P&L shows your income and [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) over the financial year and whether your business has made a profit or a loss. The important things to understand in your P&L statement are: - Your total sales / income - The cost of your sales (direct costs such as materials, etc) - The total cost of your overhead expenditure costs (such as rent, salaries, etc) - Your net profit for the financial year (so how much your business made after expenses) A healthy profit will show that your business is sustainable and will help you plan how to distribute your dividends and plan for any future investments. ### 3. Notes to the Accounts By providing notes with the accounts you’re able to provide additional detail and context, including how your assets are valued, or how any loans may be structured. Notes to accounts can be useful if you want to understand the finer details and can help add context to why certain decisions were made at the time. ## Why should you care about your company’s annual accounts? Whilst annual accounts are initially a compliance requirement, they’re also much more than just that. Here’s what they’re able to tell you: **Are you operating efficiently?** How high are your expenses, and are you under-pricing your goods / services? **How much value are you creating?** Is your company’s net worth increasing? **What can you afford?** Are you able to draw more in dividends, hire more staff or invest in your company’s growth? **Are you financially stable?** Would your company survive if you experienced a rough period, or if you incurred an unexpected cost? ## How your Client Director can help you At SG your Client Director doesn’t just prepare your accounts, they help you understand them. Our team are on hand to explain your figures, give you an insight into what they mean and help you plan for both yours and your business’ future. If you’re ever unsure what a figure means or want to know how to improve your financial position, just reach out — we’re here to help. ## Annual accounts – SG’s final thoughts Your company’s annual accounts aren’t just a formality, they’re a valuable tool that allows you to make more calculated and smarter business decisions. With the right accounting partner, they can provide clarity, confidence and ultimately a clearer path for growth. If you need a deeper level of understanding of your accounts get in touch with your Client Director. And if you’re not yet a client and like the sound of clear, helpful advice without the jargon, [get in touch with us](https://sg-accounting.co.uk/contact/) – we’d love to support your business journey and see you on your path to success. **Categories:** limited company, New to contracting, Running your business, Tax **Tags:** Kerry Newman --- ### [How much can you claim for using your home as an office as a limited company director?](https://sg-accounting.co.uk/blog/how-much-can-you-claim-for-using-your-home-as-an-office-as-a-limited-company-director/) **Published:** November 19, 2025 **Author:** Alex Gould **Content:** If you work from home you can usually expect to incur additional [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/), but did you know that you may be able to claim tax relief on those expenses if using part of your home as an office? In this blog we break down the options for the 2025/26 tax year, including flat-rate allowances and actual cost calculations for understanding how much you're able to claim and the methods available that can help reduce your tax bill. ## ## Key Takeaways **Flat-Rate Allowance:** You're able to claim up to £6 per week (£312 annually) without the need of receipts or detailed calculations. **Actual Cost Method:** If you feel that the costs you incur are more than the flat rate allowance of £6 a week, you can look to apportion your household expenses based on the space and time used for business purposes. **Capital Gains Considerations:** Be aware that if you're using a significant proportion of your home for business it can affect your Capital Gains Tax and other reliefs, so it's always worth running this past your Client Director for clarification. ## Contents ## ## Flat-Rate Home Office Allowance HMRC provides a flat-rate allowance for individuals working from home. For the 2024/25 and 2025/26 tax years, you're able to claim £6 per week without the need for providing receipts of justification for the amount. £6 per week totals £312 annually. This method provides a very straightforward way of claiming back your expenses when the amount you're spending for your home office is minimal. ### ## Claiming actual home office costs If your home office space is substantial, you may decide to calculate the actual costs. This process involves apportioning your household expenses based on the space and time your business occupies. For example, if you used one room out of a total of five purely for business purposes, you may be able to claim 20% of your household expenses. Whilst this may sound appealing, it's important to understand that this method requires detailed record keeping and receipts and that not all household expenses can be included within the calculation. For example, fixed costs can't be included because HMRC argue that these would be incurred for your primary residence whether you worked from home or not. However, variable expenditure such as heat and electricity can be claimed. [See our blog here](https://sg-accounting.co.uk/guides/how-much-can-i-claim-for-using-my-home-as-an-office/) which shows an example of a calculation you could use to justify an enhanced claim. ### ## Capital Gains Tax Considerations If you're using a significant area of your home for business use, it could potentially affect your eligibility for [Capital Gains Reliefs](https://www.gov.uk/capital-gains-tax-businesses/relief), such as [Private Residence Relief](https://www.gov.uk/tax-sell-home/private-residence-relief). It's essential to consider these potential implications before putting in any significant home office expense claims. ## FAQs ### [How much can a limited company director claim for working from home? ](#db58b954231a7789e) For the 2025/26 tax year, you’re able to claim £6 per week (£312 per year) using HMRC’s flat-rate allowance. This is a simple option that doesn’t require receipts or detailed calculations. ### [Can you claim more than the £6 weekly flat rate? ](#ba91fe2c686ee02df) Yes. If your actual home working costs are higher, you can use the actual cost method. This involves apportioning household bills (such as heating and electricity) based on the space and time used for business. You’ll need detailed records and receipts to justify your claim. ### [Will claiming home office expenses affect Capital Gains Tax? ](#eff35fb5a075f5761) It can. If part of your home is used exclusively for business, you may lose some Private Residence Relief when you decide to sell your property. You can avoid this by ensuring the room has dual use (for both personal and business purposes). ### [Which method is best for claiming home office expenses? ](#1a37dc08941cbc8b4) If your business use is minimal, the flat-rate allowance is easier. If you have significant costs and can maintain detailed records, the actual cost method may result in a larger claim. Always check with your Client Director to confirm the most tax-efficient option for your situation. ## Final Thoughts Claiming home office expenses help to reduce your overall tax bill, but it's crucial to understand the different methods of doing so, and choosing the correct one that best suits your situation. Ensure to always keep detailed records of usage, and to [keep in touch with your Client Director](https://sg-accounting.co.uk/contact/) who can offer guidance on claiming expenses for your home office. Alex Gould Client Director Alex joined SG back in October 2017, and is ACCA partially qualified. Specialising in the complex needs of Limited Company contractors since joining SG, Alex enjoys overcoming the challenges his clients face on a daily basis, and aiding them in maximising their contractor take home pay. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/alex-goulds/) [LinkedIn](https://www.linkedin.com/in/alexander-gould-416248b5/) **Categories:** Expenses, limited company, News, Running your business, Tax, VAT **Tags:** Alex Gould --- ### [How to maximise your tax efficiency before tax year end 2026](https://sg-accounting.co.uk/blog/how-to-maximise-your-tax-efficiency-before-tax-year-end-5-april-2026/) **Published:** January 28, 2026 **Author:** Kerry Newman **Content:** ## Allowable expenses - Claim all of your [allowable expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) - Ensure paid invoices have been recorded – chase those you’re still awaiting payment for - Keep receipts 6 years after accounting period ![illustration of a piggy bank with ISA next to it](https://sg-accounting.co.uk/wp-content/uploads/2024/12/SG-25-ISA.png "SG 25 ISA | SG Accounting") ## ISAs - Use your ISA allowance - £20,000 taxed at 0% per year - £9,000 for junior ISAs (JISAs) - If you have a spouse / partner be sure to utilise their £20,000 allowance ## Pension Contributions - Make contributions through your Limited Company for greater tax efficiency - You can pay up to £60,000 taxed at 0% into your pension per year from your Limited Company - Carry forward any unused allowance for the past three years - Utilise your partner / spouse’s allowance - Any contributions must be made before your company’s financial year end to qualify for deduction ## Dividend Allowance - On the basis you take a salary of £12,570 - £500 dividend allowance taxed at 0% - The remaining £37,200 is then taxed at a rate of 8.75% ## Inheritance Tax - Use your allowance of £3,000 per year NOT per person - You can give gifts or money up to £3,000 to one person or split the £3,000 between multiple people - Carry forward any unused annual exemption into the next tax year for one year only ## Other cost saving measures - Avoid losing your personal allowance if your income exceeds £100,000 by making personal pension contributions - Utilise your annual capital gains exemption of £3,000 - Apply for the marriage allowance if you or your spouse are not using your full personal allowance - It you’re looking to invest, consider EIS, SEIS or VCT’s as tax reducers [Get in touch to discuss further](/contact/) **Categories:** limited company, News, Running your business, Tax **Tags:** Kerry Newman --- ### [The key dates this tax year for Limited Company Directors](https://sg-accounting.co.uk/blog/key-dates-throughout-the-financial-year-for-limited-company-directors/) **Published:** March 2, 2026 **Author:** Kerry Newman **Content:** As a director of a Limited Company, you’re responsible for meeting a range of legal obligations throughout the tax year, such as filing and submitting various forms and returns to HMRC and Companies House. Missing deadlines can potentially lead to penalties, fines and avoidable stress. If you’re new to contracting or running your own company, sometimes it’s not always clear what needs to be filed, when it’s due, and what’s expected of you as a director. In this blog we outline the key dates every Limited Company director will need to be aware of, to help you remain compliant, organised and on the right side of HMRC. ## **The tax year 2026/27** The UK’s tax year runs from 6 April to 5 April the following year. The following dates highlight some or all of the obligations you’re required to meet throughout the tax year: #### **April 2026** **6 April –** The start of the 2026/27 tax year **19 April –** Deadline for employers to submit their Final Payment Submission (FPS) and the Employer Payment Summary (EPS) for the 2025/26 tax year **22 April –** Deadline for electronic PAYE payments for March 2026 #### **May 2026** **31 May –** If you employ any staff, you must provide your employees with their P60s Shows the total amount you’ve been paid through your Limited Company, including the amount of tax you’ve paid in that tax year. for the 2025/26 tax year #### **July 2026** **6 July –** Deadline for employers to report employee benefits and [expenses](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) using the P11D form Summarises the value of benefits in kind given to employees and directors in a tax year. , which must be submitted using the accompanying P11D(b) **19 July –** Is the payment deadline for Class 1A National Insurance Contributions as per P11D submissions **31 July –** The second payment on account You must make payments on account every year if the total amount of outstanding tax from the previous tax year exceeded £1,000. for the 2025/26 tax year is due for Self Assessment Tax Return #### **October 2026** **5 October –** Deadline to register for Self-Assessment As a director/shareholder of your Limited Company, you must submit an annual Self Assessment, detailing your personal income and allowances to HMRC. It may include employment income, dividends paid to yourself from your company, and any other sources of income such as rental or sole trader income. if you’re self-employed or have income that’s not taxed at source **31 October –** Deadline for submitting your paper Self-Assessment Tax Return for the 2025/26 tax year (if applicable and you don’t file your self-assessment tax return online) #### **January 2027** **31 January –** Deadline to submit your online Self-Assessment Tax Return for the 2025/26 tax year Deadline to pay any tax owed for 2025/26 The first payment on account for the 2026/27 Self-Assessment Tax Return #### **April 2027** **5 April –** End of the 2026/27 tax year ### **Accounting Filing Deadlines and Confirmation Statements** **Annual Accounts –** Limited Companies need to file their annual accounts with Companies House by the deadline, which typically is 9 months after the end of your company’s financial year. For example, if your year end is 31 March 2026, the filing deadline is 31 December 2026. **Confirmation Statement** Contains information about your company, the director/s, and any other administrative arrangements. It must also contain information about any Persons of Significant Control that are involved in your business. – Limited Companies must file a confirmation statement with Companies House annually, which confirms your company details. The deadline is typically 12 months after the previous confirmation statement or incorporation date. **Corporation Tax** You’ll need to pay Corporation Tax to HMRC if your company made a profit during the accounting period. – Limited companies are typically required to pay Corporation Tax 9 months and 1 day after the end of your company’s financial year. For example, if your year end is 31 March 2026, the payment deadline is 1 January 2027. Limited companies must file a Corporation Tax Return (CT600) Once a year you must file a CT600 form with HMRC, which includes details of your company’s income, minus any tax allowances or business expenses. What’s left is your taxable profit, and this will be used to calculate the total amount of Corporation Tax your company is due to pay. with HMRC, this is usually once a year if the period is no more than 12 months long. For example, if your year end is 31 March 2026, the submission deadline is 31 March 2027. This would typically be filed the same time as your accounts are submitted with Companies House. ### **Quarterly VAT Deadlines** If you are VAT registered, you’d normally file your VAT returns If your company is VAT registered, it is most likely that you are required to submit VAT returns to HMRC every 3 months in line with the quarters selected. You must keep your VAT records digitally and use compatible Making Tax Digital software to submit your VAT returns. quarterly. Your deadlines will depend on your VAT accounting period, but will usually align with your company year end. For example: **7 May 2026 –** Deadline for the VAT period ending 31 March 2026 **7 August 2026 –** Deadline for the VAT period ending 30 June 2026 **7 November 2026 –** Deadline for the VAT period ending 30 September 2026 **7 February 2027 –** Deadline for the VAT period ending 31 December 2026 The filing deadline mirrors the payment deadline for VAT payable to HMRC. ### **Ongoing Monthly Deadlines** **PAYE and National Insurance** Employee’s NI must be paid if your salary exceeds the Primary Threshold. If you also pay yourself or any employees/directors above the Secondary Threshold your company must also pay Employer’s NI. Income Tax will be payable on behalf of employees above the personal allowance. – Full Payment Submission (FPS) and Employer Payment Summary (EPS) are due by the 19th of each month. Most companies will pay PAYE to HMRC on a quarterly basis and paid by the 22nd in the months of July, October, January and April. **CIS (Construction Industry Scheme) Returns –** Due by the 19th of each month. ### **SG’s top tips on how to stay organised** 1. **Use accounting software –** [Tools like FreeAgent](https://www.freeagent.com/) to help automate reminders and streamline your record-keeping 2. **Consult with your SG Client Director –** Your Client Director here at SG is always on hand to help you keep on top of your tax and accounting responsibilities, and understand what’s required from you. Get in touch with them whenever you have a question 3. **Stay informed –** Whilst your SG Client Director is here to help you run your business from a tax and accounting point of view, it’s also important that you keep up to date with HMRC’s latest guidance to ensure compliance. [Follow SG’s LinkedIn page](https://www.linkedin.com/company/sg-accounting) to see the latest news and information that affects Limited Company directors ## **Final thoughts** Keeping on top of your tax obligations doesn’t need to be overwhelming. By understanding and noting these key dates and making the most of the tools and professional support that’s available to you, you’ll meet your deadlines with ease and confidence. If you have any questions about anything to do with your company’s accounting and tax, your Client Director is always on hand to help. **Categories:** New to contracting, News, Running your business, Tax **Tags:** Kerry Newman --- ### [What is your company yearend and what do you need to know?](https://sg-accounting.co.uk/blog/what-is-your-company-yearend-and-what-do-you-need-to-know/) **Published:** December 6, 2022 **Author:** Kerry Newman **Content:** If you’re new to owning a Limited Company you’ll need to complete your yearend, but what exactly is it, and why do you need to complete one? In this blog we explore just that, to ensure you’re a pro when it comes to your yearend. **First things first, what is a yearend?** A company’s yearend is the date which your company’s accounting period officially ends. This is also the date from which HMRC and Companies House expect you to return certain required documents back to them. If you’re new to the world of Limited Company contracting it’s best to run your first compnay yearend past your accountant, to ensure you get it right first time. **Your company’s accounts and tax returns – what are the deadlines?** After the end of your Limited Company’s financial year (known also as your yearend or accounting period), you’re required to prepare and file: - a company tax return - a full “statutory’ annual accounts Every Limited Company’s accounts and tax return must meet the following deadlines set out by Companies House and HMRC: **Companies House requirements** - Filing your company’s first accounts with Companies House – 21 months after the date you registered your company with Companies House - File annual accounts and subsequent years annual accounts with Companies House – 9 months after your company’s financial year ends **HMRC’s requirements** - Pay your due Corporation Tax, or inform HMRC that your company doesn’t owe any – 9 months and 1 day after your ‘accounting period’ for Corporation Tax ends - File a Company Tax Return – 12 months after your accounting period for Corporation Tax ends Your accounting period for Corporation Tax is the period of time covered by your Company Tax Return. This is usually the same 12 months as the company financial year, that’s covered by your annual accounts. **What you need to file with HMRC** **Your Company’s Tax Return** Your CT600 or Company Tax Return must include details of your company’s income, less tax allowances and expenses. Your profit (the remaining amount) is then used to calculate how much Corporation Tax your company is due to pay. **Annual Accounts or Statutory Accounts** The Annual Accounts you must submit to HMRC consist of the following: **Income Statement –** Displays the profit or loss your company made for that accounting period. **Statement of Financial Position –** Shows a picture of your company’s accounting period end date, displaying the cumulative value of your business based on its assets, liabilities, capital, and reserves. **Footnotes –** to show transactions between your company and its directors, such as advances, guarantees and loans. **What you need to file with Companies House** **If you use the FRS 105 to prepare your annual accounts (using the financial reporting standard for micro-entities) –** You must submit two documents from your Annual Accounts to Companies House. The first is the Statement of Financial Position, and the second is the footnotes. It’s worth noting that once these documents are submitted to Companies House they will publish them on their website, and anyone is able to view them. **What do you need to prepare for your company yearend?** Before preparing your Annual Accounts and Company Tax Return, you need to do the following: 1. Manage your expenses – Each pound you’re legitimately able to claim as a business expenses is another pound off of your company’s profits, and therefore less profit means less Corporation Tax to pay. 2. Chase any late invoices – unpaid invoices mean money in your client’s pocket and not yours, so ensure you chase any outstanding invoices before your company’s yearend. Once the money is in your business account you can reconcile your accounts, to make sure they’re 100% correct. 3. Get your paperwork together – accounts need proof to back them up, and this is usually in the form of records and receipts. You’ll need records for everything before you file your company’s yearend, including statements of account from suppliers, bank statements, and income records. All records must be kept for a minimum of six years from the end of your company’s accounting period. 4. What are the deadlines – Your tax return’s deadline is 12 months after the end of the accounting period which it covers, and if you miss the deadline you’ll have to pay a penalty. You’ll also have a separate deadline to pay your Corporation Tax bill, which is 9 months and one day after the end of your company’s accounting period. Companies House requires your company’s annual accounts within 9 months of your yearend, and within 21 months of your company’s registration date if it’s your very first return. **What happens if you miss the deadlines?** If you miss a deadline, there is an associated fine, and the longer you leave a deadline, the greater a fine will increase. If you miss more than one deadline, you can expect the following fines: **HMRC – late filing penalties** Late by 1 day – £100 fine Late by 3 months – Another £100 Late by 6 months – HMRC will estimate your Corporation Tax bill and add a penalty of 10% of the unpaid tax Late by 12 months – Another 10% will be added to your unpaid tax bill If your tax return is late three times in a row, your fines increase to £500 each. **Companies House – late filing penalties** Late by up to a month – £150 Late from 1 to 3 months – £375 Late from 3 to 6 months – £750 Late over 6 months – £1,500 Late filing two consecutive years – your penalties will double If you fail to send your accounts and / or Confirmation Statement when it’s due, you will be fined and your company may be struck off the Companies House register. **What else do you need to consider?** **VAT Returns –** Most Limited Companies file quarterly VAT returns to HMRC and pay quarterly. There are different schemes such as ‘yearly’, but the majority are quarterly for VAT. VAT quarters depend on the quarters given by HMRC (these are either Jan/Apr/Jul/Oct, Feb/May/Aug/Nov or Mar/June/Sept/Dec). VAT is due to be paid 1 month and 7 days after the end of your VAT quarter and therefore it is to be submitted and paid to HMRC (if a liability is due) 4 times each year. **Confirmation statement –** every Limited Company director needs to confirm their company’s information once a year with Companies House. If you fail to do so, you will be subject to fines personally in criminal courts, and companies can be struck off the register. Your Confirmation Statement needs to be filed once a year, and within 14 days of its due date (which is usually a year after your company’s incorporation date, or the date of your last Confirmation Statement). You must also do this, even [if your company is dormant](https://sg-accounting.co.uk/blog/dormant-limited-companies-in-the-uk-rules-tax-implications-and-how-to-stay-compliant/). **Financial planning –** effective financial planning can ultimately mean more money in your pocket, as financial and tax planning can reduce your overall tax bill and help plan for your financial future. Thinking about paying into any ISAs or pensions you may have, and whether you can make the most of your spouse’s allowances also can make a huge difference. **SG Accounting are here for you – every step of the way** Tax is tough, and if you’re new to the game or don’t have a head for numbers, it’s best to leave it up to the experts. Here at SG we love helping contractors, and have a team of expert accountants ready to maximise your take home pay from a tax and accounting point of view. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out more how we can help you. **Categories:** New to contracting, Running your business **Tags:** Company yearend, Kerry Newman --- ### [SG Accounting Celebrates Runner-up Recognition at the Contracting Awards 2025](https://sg-accounting.co.uk/blog/runner-up-at-the-contracting-awards-2025/) **Published:** November 13, 2025 **Author:** Jen Winslow **Content:** ## Proud to be recognised once again We’re delighted to share that we’ve been named Runner-Up in the Best Contractor Accountant (1,000 – 3,000 Clients) category at the [2025 Contracting Awards!](https://www.contractingawards.co.uk/) While we didn’t take the top spot this year, being recognised as one of the top three in our industry is an achievement that we’re truly proud of. This accolade reflects the continued trust and loyalty of our clients, and the dedication of our brilliant team who go above and beyond every day. ## The Event On Wednesday 12 November, members of the senior team attended the prestigious Contracting Awards ceremony at the Hilton, Park Lane in London, hosted by actor and comedian Simon Brodkin. Surrounded by the best and brightest in the contracting and recruitment world, it was an inspiring evening to celebrate excellence and innovation across the sector. Being named Runner-Up is a fantastic achievement, and we’re proud to stand alongside so many outstanding firms that are helping contractors around the UK. ## What this recognition means to us The Contracting Awards are the leading celebration of excellence within the contractor and freelancer community. The judging process is rigorous and combines expert evaluation of services with real client feedback, through [Trustpilot reviews](https://www.trustpilot.com/review/www.sg-accounting.co.uk) and testimonials. To be acknowledged as a finalist and runner-up reinforces our ongoing mission, to provide clear, compliant, and contractor-focused accounting services that make life easier for our clients. ## A message from our Director Kerry Newman, Director of SG Accounting, said: “We’re thrilled to have been recognised as Runner-Up in this year’s Contracting Awards. This acknowledgment reflects the passion and professionalism of [our team](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/), who deliver an exceptional service to our clients every single day. Congratulations to all the winners and finalists, we’re proud to be in such great company.” ## Thank you to our clients and team We’d like to thank our incredible clients for their ongoing support and trust, they’re at the heart of everything we do. And of course, a massive well done to the SG Accounting team for your continued dedication and expertise. ## Thinking about switching accountants? If you’re looking for an experienced, client-focused accountant who understands contractors, freelancers, and small businesses, we’d love to hear from you. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out why SG Accounting continues to be recognised among the UK’s leading contractor accountants. **Categories:** News --- ### [Taking money from your Limited Company & how tax is affected](https://sg-accounting.co.uk/blog/taking-money-from-your-limited-company-and-the-associated-tax-implications/) **Published:** July 21, 2021 **Author:** Kerry Newman **Content:** If you find yourself needing to take money out of your Limited Company there’s a few things you’ll need to be aware of before you do so, one of which is the tax implications. In this blog we take a look at the considerations you’ll need to make, and the process involved. **How it works** Regardless of whether you want to borrow money for a short or long time, in either a small or large amount, you’ll first need to know how much you have in your business account to account for tax, staffing costs, and other business depreciation elements. As the director of your own Limited Company, you’ll need to ensure that any money taken is documented. This is done in the form of a Director’s Resolution, which is a formal record that shows exactly how much was taken, and provides a formal paper trail for your records and possible future reference. If your loan amount exceeds £10,000, under the [Companies Act](https://www.legislation.gov.uk/ukpga/2006/46/part/10/chapter/4/crossheading/loans-quasiloans-and-credit-transactions) you’ll need to get approval from any other shareholders (if there are any) in writing. **Taking money out of your Limited Company legally** To take money from your company legally, you must do so in one of the following ways: - Pay yourself a director’s salary - By issuing dividend payments from available profits within the company - In the form of a director’s loan - By claiming expenses for business-related items **Director’s salary** Most Limited Company directors will pay themselves a small, reoccurring salary through HMRC’s PAYE system. Depending on how much salary you pay yourself, you might have to pay National Insurance Contributions (NICs) and/or Income Tax. Salary payments are a tax-deductible expense, so your company will not have any Corporation Tax liability on this money. Whilst this is the case, your company will still need to pay 13.8% Employer’s NICs on any salary earnings that fall above the NIC Secondary Threshold of £8,840 (for the 2021/22 tax year). Paying yourself a salary up to the NIC Primary Threshold of £9,568, will allow you to avoid paying Income Tax and NIC. Even though this amount it low, you’ll still qualify for the State Pension and any benefit entitlements, as your earnings will be above £6,240 pa (the Lower Earnings limit). You could also pay yourself a salary up to the tax-free Personal Allowance of £12,570, and you won’t have to pay Income Tax on this amount, but you will be liable to pay 12% NIC on your earnings between the £9,568 and £12,570. You could then take the remainder of your income as a dividend, with the first £2,000 being tax-free. **Dividends** A shareholder of their Limited Company is able to take profit from the company in the form of a dividend. You’re only able to do so once there is profit in the company, otherwise the dividend will be classed as an illegal dividend. The amount you’re able to pay yourself will be related to how many shares you have in your company, for example if you’re the sole shareholder and hold 100% of the shares, you’re able to take all remaining profit once your company’s depreciation costs (ie tax, expenses, etc) have been accounted for. All Limited Companies pay 19% Corporation Tax on taxable income. The first £2,000 of annual dividend income is tax free, and you won’t be required to pay NIC or Income Tax either. Any amount over the £2,000 limit will be subject to dividend tax that’s based on your Income Tax band (so you’ll either pay the Basic, Higher or Additional rate tax). Before you pay your company’s shareholder/s you’ll need to declare the dividends to the board, and make a record of your meeting’s minutes. By keeping minutes you’re providing HMRC with a solid paper trail of amounts issued and dates, should they ever wish to investigate you in the future. You’ll also need to keep a dividend voucher, which also displays details of the payment. Your SG accountant will be able to help you with this. **Director’s Loan** You can also take money from your Limited Company in the form of a Director’s Loan. By doing so you’re able to: - Lend money back to your company - Borrow more money from your company than what you originally put in - Reclaim any money you put into the company originally You must keep a record of any Director Loans in a Director’s Loan Account, and they must be shown as part of your company’s balance sheet. Do note that if you take out more money than has been paid into the business, your Director’s Loan Account will be overdrawn and there will be tax implications if this happens. Should your company owe you money, then your loan account will be in credit and you’ll be able to reclaim money without facing any tax liabilities. **For example, if the amount you owe your company is less than £10,000:** - There aren’t any personal tax liabilities, but there may be tax consequences for your company - If your loan is overdrawn for longer than 9 months and 1 day from your company’s accounting reference date (ARD), then your company must pay Section 455 Tax on the full amount overdrawn - Your company’s tax return must show any outstanding loan amount - Section 455 Tax carries a 32.5% tax charge – and your company must pay it alongside its Corporation Tax liability **If the amount you owe your company is more than £10,000:** - The amount you owe must be declared on your Self Assessment Tax Return - If any interest is generated by the loan you may need to pay Income Tax on that interest - Your company must deduct Class 1 National Insurance on the loan - Your company’s tax return must show the loan’s outstanding amount - Your company must pay Section 455 Tax at 32.5% on the overdrawn amount **If the loan is not repaid / is written off:** - Class 1 National Insurance must be deducted by your company through payroll - You must pay Class 2 and Class 4 Income Tax on the loan through self-assessment **What you need to keep a record of when it comes to Director’s Loans:** - The amount of money a director gives to the company (excluding any payments for any shares they may take) - The total amount a director may borrow from the company These records are usually kept within the Director’s Loan Account. Depending on the amount of money taken, it may be subject to certain types of tax, therefore we strongly advise checking this with your specialist contractor accountant. **If your Director’s Loan Account has zero balance or is in credit** If you take out less from your company than you’ve put in, you’re not borrowing any money, and therefore are reclaiming funds that you’ve already put in. Therefore the Director’s Loan Account will either show a balance of nil or remain in credit, depending on the total amount you take out. You can take out the available money at any time without any tax implications, so long as your account is in credit. **What happens when your Director’s Loan Account is overdrawn?** If more money is taken out than put in (not including a salary payment, dividend or expense) the withdrawal is a benefit and is classed as a Director’s Loan. This will in effect make your Director’s Loan Account overdrawn. **Your company’s financial year** If your account remains overdrawn 9 months and one day past the end of the accounting period, you will be charged S455 Tax at a rate of 32.5% by HMRC. You will, however, be paid this tax back once you’ve paid the full amount of overdrawn money back to your company. **Expenses** So long as expenses are only for business purposes you’re able to reclaim them. To be able to do so you must complete the correct claims forms and keep a record of the receipts. You’re able to claim tax-deductible expenses in the following form: - Parking costs and mileage - Travel and accommodation - Mobile phone contract costs - Entertainment - Food and drink - Computer and office equipment - Training costs - Postage costs Your company will reimburse you these amounts when you are paid your monthly salary, or at any other point during the month that’s convenient to you. Your company will need to keep receipts of all expenses for a minimum of six years along with a record of what the expense was and what it was required for. Each tax year you’ll need to complete a P11D whereby you’ll declare the benefits for that tax year. How SG Accounting can help** Tax can be confusing, especially when it comes to working out your % margins, what tax is due when, and how much you could up paying extra if you get it wrong. That’s where we come in, our expert accountants here at SG help Limited Company contractors just like yourself everyday with their tax and accounts. Don’t be left out of pocket by getting it wrong, [speak to our team today](https://sg-accounting.co.uk/contact/) to find out how we can help you become a success whilst also keeping the taxman happy. **Categories:** New to contracting, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [Limited Companies: making tax efficient charitable donations](https://sg-accounting.co.uk/blog/how-to-make-tax-efficient-charitable-donations-through-your-limited-company/) **Published:** August 17, 2023 **Author:** Kerry Newman **Content:** Supporting causes that are important to you through charitable donations is a great thing to do. What you may not know, however, is that using your Limited Company for these donations can also lead to significant tax benefits. In this article, we’ll cover the process of donating to charities through your Limited Company and the tax benefits of doing so. **The basics** For your donations to qualify for tax relief, they must: – contribute only to a UK registered charity that’s officially registered with HMRC. – be genuine and not mistaken for a loan. They must not be conditional on the charity making purchases from your company, and they must not be a distribution of your company’s profits (dividends). You should also keep hold of the documentation of your donations for the purpose of Corporation Tax records. **Types of donations** **Monetary donations** – Typical monetary donations can be deducted from your Limited Company’s profits. The maximum deductible amount is the figure that brings your profits to zero. If this threshold is exceeded, you won’t be able to declare trading losses on your tax return or carry over any extra to your next tax return. For personalised advice on your donation, speak with your SG Client Director. **Equipment donations** – You can donate various types of equipment including office furniture, computers, printers, machinery, and vehicles, which all allow full capital allowances to be claimed on them. **Trading stock donations** – This is the donation of any goods your business manufactures or sells. Tax relief can be claimed based on the cost of the given stock. Before making any donations, especially non-monetary ones, it’s best to communicate with the charity to confirm they can make use of your donation and are able to accept it. It’s also very important to maintain records of the donation date, a transfer-of-ownership statement from your company to the charity, and a clear description of the donation, which will allow you to claim your tax relief. **Employee secondment** – If your Limited Company has employees, you can temporarily allow an employee to work for a charity during regular work hours. While this happens, the employee must still be paid, but the wages can be deducted from your company’s taxable profit. **Receiving benefits from charities** It may be the case that a charity wishes to offer benefits in return for your donation. These benefits do not affect your Corporation Tax Relief, provided their value remains within the specified limits. – For donations up to £100, benefits can equate to a maximum of 25% of the donation. – For donations ranging from £101 to £1000, the maximum benefit value is £25. – For donations of £1001 or more, the value of benefits can be up to 5% of the donation, although this is capped at a maximum of £2,500. These regulations apply to both those within the Limited Company and those closely connected, including relatives. If the benefits the charity offers relate to the company, your donation is classified as a sponsorship payment, which is subject to different regulations. Sponsoring related parties is not advisable, as this might not be looked upon favourably by HMRC. **SG Accounting’s Charity Skydive (in Support of Dorset Mind)** If you’re now feeling motivated to donate to charity, some of the staff here at SG Contractor Accounting are completing a charity skydive with GoSkyDive to raise money for [Dorset Mind](https://dorsetmind.uk/). Dorset Mind, a mental health charity that is local to our office, offers mental health education, confronts stigma, and helps recovery by empowering individuals to develop resilience. Their support groups and befriending services help people to regain social skills, while their educational programs raise awareness in schools and workplaces. To support Dorset Mind through our fundraising efforts, [donations can be made via our GoFundMe page here](https://www.gofundme.com/f/the-affinity-group-skydiving-for-dorset-mind). To find out more information about this incredible charity, [you can visit their website](https://dorsetmind.uk/). Remember, your SG Accountant stands ready to offer expert guidance and assistance encompassing matters influencing your Limited Company and tax obligations. To understand how charitable donations can personally reduce your overall Corporation Tax, [get in touch with our team today](https://sg-accounting.co.uk/contact/). **Categories:** Running your business, Tax **Tags:** Kerry Newman --- ### [Should you opt-in or opt-out of The Agency Conduct Regulations?](https://sg-accounting.co.uk/blog/should-you-opt-in-or-opt-out-of-the-agency-conduct-regulations/) **Published:** April 26, 2021 **Author:** Kerry Newman **Content:** The Conduct of Employment Agencies and Employment Business Regulations 2003 were created in 2004, with the aim to enforce a group of minimum standards which the UK’s private recruitment industry must adhere to. These standards are applicable to both employment agencies and businesses that provide temporary and/or permanent staff to end hirers / clients. Whilst these regulations are mostly aimed at individuals, in some circumstances they can have an effect on contractors also. **What’s the effect on contractors?** As a contractor working through your own Limited Company, you have the choice to either ‘opt-in’ or ‘opt-out’ from being covered by the regulations. You’re required to sign a relevant form, and your end hirer / client must be informed of your final decision before you enter into any contract that agrees on you providing your services. Most commonly the ‘opt-out’ form is provided along with the contract that comes from the recruitment agency the contractor is using. **If you ‘opt-in’ what are the benefits?** Gaining access to additional rights are the main benefits of choosing to ‘opt-in’. Benefits such as being paid by the agency even if the client doesn’t pay, and the removal of contractual restrictions which will allow you to make direct contact with the end hirer / client for future work. **Regulation 12 – what does it mean?** An agency is not permitted to request a signed time sheet from the contractor in order to pay them. Whilst as a contractor you’ll still need to be able to provide proof that you’ve completed the works in order to get paid, you won’t have to do so in the form of a signed timesheet. **Regulation 10 – what does it mean?** It prevents the agency from impeding a contractor from entering into a direct contract in the future with the end hirer/client. Currently it’s quite common for contracts to state that contractors are not allowed to provide their services to a previous client for a period of 6 months, 12 months or even longer. Whilst this is the case, under Regulation 10 a client and contractor can only withhold any communication either 14 weeks after the first working day, or 8 weeks after the last working day of the original contract (whichever is longer). **If you ‘opt-out’ what are the benefits?** A contractor’s IR35 status is one of the main reasons why a contractor may decide to ‘opt-out’. If a contractor is receiving regular protection, it might be considered as receiving a benefit, demonstrating that the contractor is under the control of the end hirer/client and therefore would be considered ‘inside’ IR35. When a contractor’s IR35 status is determined, one element that’s taken into consideration is the level of supervision, direction and control that resides over both the contractor’s contract and working practices. As ‘opting-in’ demonstrates a level on control over the contractor, it may appear that the contractor is working ‘inside’ IR35. Whilst this may be the case, ‘opting-in’ could also demonstrate good management values for the contractor’s Limited Company as a whole. **What are the perceptions of ‘opting-out’?** ‘Opting-out’ for some means gaining greater flexibility, as by ‘opting-in’ you’re subjecting yourself to enforcing the following obligations: - Before starting the contract, the terms or services must be confirmed in writing - Any subcontractors the contractor may wish to use must be audited, by having their references and qualifications checked and approved Both exercises take time to complete, and some contractors feel these processes can take too long and add too much of a delay to the start of the contract. Sadly you’re not able to pick and choose which parts of the regulations you wish to adopt, as it’s an all or nothing scenario. **SG Accounting’s final thoughts** Before making any decision that will have an effect on your contract, we advise speaking to your specialist contractor accountant, to ensure you’ve considered all your options and you’re making the right decision for you. Only you can make the final choice, but we can help give you the confidence to know it’s the right one for you. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out more about our expert specialist contractor accounting services, and how we can help you today. **Categories:** IR35, Running your business, Tax **Tags:** Kerry Newman --- ### [Are you entitled to childcare as a Limited Company contractor?](https://sg-accounting.co.uk/blog/are-you-entitled-to-childcare-when-contracting-through-your-limited-company/) **Published:** November 24, 2021 **Author:** Kerry Newman **Content:** One of the great positives from contracting and running your own Limited Company is the flexibility it provides. You get to choose when, where and for whom you work, and can chop and change whenever you like. So how does being a Limited Company contractor work when you’re a parent? In this blog we explore your options when it comes to having a family and what support there is from the government. **Childcare costs** It’s no secret that childcare is costly, especially when you have more than one. And as any parent will know, when it comes to work you have to weigh up your number of hours versus how much those hours will cost in childcare costs. So, is it worth it, and what help is available when it comes to paying for it all? **Childcare vouchers** Sadly childcare vouchers are not available to those who are self-employed, and only those who were previously using the scheme prior to October 4th 2018 are allowed to continue using them. The scheme is, however still available to those in permanent employment, so if you were to go from Limited back to being employed, you’d be able to take advantage of the vouchers. **Aid for the self-employed** The following schemes are available to both employees and the self-employed: 1. **Tax-Free Childcare scheme** A government initiative which allows you to ‘top-up’ the amount you pay into your Tax-Free childcare account. It works by the government adding 20p onto every 80p that you personally pay into your childcare account. If you’re eligible you can claim up to £2,000 per year per child, who’s aged up to 11. The total you’re able to claim in any given year is £10,000, and up to £500 per quarter, per child. 2. **Tax-Free Childcare if your child is disabled** The amount you’re able to claim if you have a disabled child is increased to £4,000, and they’re able to remain on the scheme until they’re 17. To be eligible your child must already receive either the Disability Living Allowance (DLA), the Personal Independence Payment (PIP), or the Armed Forces Independent Payment (AFIP), and / or be registered severely sight impaired or fully blind. **Who’s allowed to use the tax-free childcare scheme?** The scheme is available to both those who are self-employed and those in permanent employment. Traditionally, to be eligible for the scheme you’d need to earn a minimum of £120 per week, but if you’re new to contracting and not quite earning that amount, this limit is waived for your first 12 months of trading. In order to qualify you’ll need to do the following: - Be working and/or on parental, sick or annual leave - Have a child / children younger than 11 years old - Have a child / children who live with you for the majority of the time - Be earning the National Minimum Wage, for at least 16 hours each week **Keeping in touch with gov.uk** To continue receiving your tax-free childcare, you must reconfirm your personal details and circumstances every three months. Should you miss the deadline, you’ll be expected to cover gaps of any outstanding childcare payments yourself, so set those calendar reminders! **Are other people able to pay into your childcare account?** Whilst the account can only be only opened by one person and kept in one person’s name, anyone can contribute to your child’s childcare account. Which is handy if you’re no longer with your child’s mother / father, or if they have keen grandparents, they can help out financially too. They can do so by transferring money directly into your account via standing order or bank transfer. **How does it work?** Once your money has reached your childcare online account, the government’s contribution will appear shortly after, or later on in the same day. **How to apply for Tax-Free Childcare** You can create your account online from the [gov.uk website](https://www.gov.uk/apply-for-tax-free-childcare). You’ll need to create your gateway account first (if you’re yet to do so), then you’re able to apply for tax-free childcare online. When completing this process, you’ll also be given the opportunity to see whether you’re better off receiving tax-free childcare relief, or staying with the childcare scheme. To see if you’re eligible, you’ll need: - Your UK passport - Tax credit information - Your P60 or a recent payslip (if you have one) - Your National Insurance number - Your unique taxpayer reference (UTR) number **Are you able to claim if you’re already claiming financial support?** If you’re already receiving Working Tax Credit, Child Tax Credit, or Universal Credit, you won’t be able to claim for tax-free childcare. If you decide to also claim for the tax-free childcare and are successful in doing so, any other credits you receive will stop, so it’s worth seeing which holds the greatest financial value to you. The gov.uk website has [an online tool](https://www.gov.uk/childcare-calculator?step-by-step) which helps you decide which financial aid option is right for you, according to your eligibility. **30 free hours for three and four year olds** In addition to tax-free childcare, you’re also entitled to [claim 30 hours free childcare](https://www.gov.uk/tax-free-childcare/apply-for-tax-free-childcare) for 38 term-time weeks per year, for any children aged three and four. To apply you follow the same stages as before, selecting the 30 hours free option. Beware though that if yours or your partner’s annual earnings are above £100,000 per year, you won’t be eligible for the 30 free hours. **How SG Accounting can help** Here at SG Accounting we make it our business to not only know your accounts, but your personal circumstances, so that we’re able to help you make the most from your contractor take home pay. Whether it’s pension advice, financial guidance or helping you plan for your future, our team of expert accountants are here to help you at every stage of your life. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out more. **Categories:** Expenses, Running your business, Tax **Tags:** Kerry Newman --- ### [How do dividends for Limited Company owners work?](https://sg-accounting.co.uk/blog/a-complete-guide-to-dividends-for-limited-companies/) **Published:** March 25, 2024 **Author:** Kerry Newman **Content:** When running your Limited Company, it’s important to understand how dividends work in order to maximise your take-home pay and become more tax efficient. Whilst consulting your specialist accountant is recommended for precise guidance, it’s useful to grasp the basics of dividends for yourself. This blog will provide you with an overview of dividends and what you need to know as a Limited Company business owner. ## **What are dividends?** Dividends are the distribution of company profits among its shareholders. As a Limited Company owner, you can pay yourself a salary and then supplement your income with dividends. The rules for taxing dividends are different from salaries, and many Limited Company directors will add their spouse as a shareholder in their Limited Company, allowing them to draw more tax-free income from their company. ## **When can you draw dividends?** You can draw dividends from your Limited Company at any time, provided there are sufficient profits within the company. Drawing dividends when this is not the case would be considered an illegal dividend or director’s loan, potentially leading to an investigation by HMRC. Most people typically draw dividends monthly, quarterly, or annually, although it’s entirely up to you how often you draw dividends. Just be sure to keep the correct records when doing so, to ensure HMRC can’t class them as a ‘disguised salary’, should they decide to investigate. It’s essential to document your decision to declare a dividend through minutes, and you must provide all shareholders with a dividend voucher. This creates a clear audit trail, which is useful to have in case HMRC wish to take a closer look. Additionally, all dividend vouchers are required for your annual tax return. ## **What are the tax and National Insurance Contribution (NIC) implications?** Dividends do not incur NICs. Because of this, the most tax efficient way to pay yourself as a contractor tends to be a combination of a low salary and high dividend payments. The dividends you receive are taxed as personal income, and there’s a tax-free allowance of up to £500 per person. The current tax thresholds for dividends are as follows: – Basic rate (taxed at 8.75%): up to £50,270 – Higher rate (taxed at 33.75%): from £50,271 to £125,140 – Additional rate (taxed at 39.35%): over £125,140 A dividend is taxed at the point of declaration, not when it’s drawn, so timing your declarations is important. For instance, if you declare a dividend on April 1st, 2024, but it’s not paid until April 7th, it will be included in your 2023/2024 tax return. Depending on your previous withdrawals during that tax year, this could push you into a higher tax rate. Your Limited Company accountant will guide you through this, helping you keep track of the applicable tax rate, assessing if it’s worth drawing dividends, and determining the best timing for doing so. ## **Final thoughts** Dividends offer a great way to maximise your personal allowances. By paying yourself a salary that doesn’t use up all of the basic tax rate and supplementing it with dividends, you can fully take advantage of the lower tax rate without incurring further NICs. Each person’s situation is unique, and your individual circumstances will dictate when and how you choose to draw dividends. Whilst the concept is straightforward, it’s easy to end up drawing too many dividends, pushing you into higher tax bands. Always seek advice from your accountant before withdrawing any money from your business account to ensure you’re taking the correct amount and following all the regulations. If you’re searching for a new accountant, [get in touch with us at SG Accounting today](https://sg-accounting.co.uk/contact/). Our team of specialist accountants are ready to provide expert advice on dividends and help you maximise your contractor pay. **Categories:** News **Tags:** Contractors, Kerry Newman --- ### [Should you close your Limited Company using an MVL?](https://sg-accounting.co.uk/blog/should-you-close-your-company-using-an-mvl/) **Published:** November 25, 2024 **Author:** Kerry Newman **Content:** ## Closing your Limited Company – your options For many business owners, there will come a time when you want to close your company for one reason or another. But until that point, you likely won’t have thought much about the process or have much knowledge on how to be most tax efficient when closing your company. So if you’re thinking ‘how do I close my Limited Company?’ In this blog we’ll cover the steps, and what you need to know when going through this process. ## What is Member’s Voluntary Liquidation (MVL)? Using a [Member’s Voluntary Liquidation (MVL)](https://www.gov.uk/guidance/director-information-hub-members-voluntary-liquidation-mvl) is one of the most tax-efficient ways of closing down your Limited Company, especially if your business has final profits of £25,000 or more. But to do so, your company must be solvent. This means that your company has more assets than it does liabilities and is capable of paying back all its debts in full (including interest when due). If your company meets those requirements it can use an MVL, which allows any distributions to your company’s shareholders to be treated as Capital Gains and therefore may mean that it’ll qualify for Business Asset Disposal Relief (BADR), providing a Capital Gains Tax rate of 10%, then 14% from April 2025, and 18% from April 2026. For comparison, if you were to instead close your company without an MVL, distributions of over £25,000 would be taxed as dividend income, with rates reaching up to 39.35% for additional-rate taxpayers. ## MVL process step-by-step 1. **Appoint a Liquidator –** Keep in mind that your company’s liquidation, including asset sales and profit distribution, can only be managed by a licensed insolvency practitioner. 2. **Declaration of solvency –** This is the declaration stating your company is capable of paying all its debts within 12 months before the start of the MVL process, which you must make as a director of your Limited Company. 3. **Distribution of remaining assets –** After all liabilities are settled, the remaining profits are distributed amongst your company’s shareholder(s) as capital, which could potentially be eligible for BADR. 4. **Company closure –** Finally, after all your company’s assets have been distributed, your liquidator will apply to Companies House for company dissolution. ## How much does MVL cost? Typically, completing a MVL will cost you between £1,500 – £5,000. Whilst this is a large fee, the amount of tax savings on your distributions can make the process far more viable financially, especially when your company’s profits are over £25,000. ## BADR requirements - **Eligible Individuals –** Only company directors or employees that hold at least 5% of the company’s shares and voting rights can be eligible. - **Qualifying assets –** includes either the whole of a company or part of it owned for at least 2 years, at least 5% ownership for 2 years with shares in a trading company, or assets sold within 3 years of the business no longer being a trading company. - **Relief rate –** BADR allows a 10% Capital Gains Tax rate on qualifying gains up to a lifetime limit of £1 million. - **Qualifying period –** All assets must be held for a minimum period of two years before disposal. - **How to claim –** All claims must be made through your Self-Assessment within 12 months from the 31st of January following the tax year of disposal. - **Restrictions –** Your company must be a trading company, and as such you must also meet the shareholding and employment requirements. ## Targeted Anti-Avoidance Rule (TAAR) The TAAR stops shareholders from making use of certain techniques to avoid income tax. It does this by preventing you to close your company and then setting up a new one in the same trade within 2 years of the prior closure. If TAAR is triggered, distributions will be taxed as income rather than capital. They would therefore be disqualified from being eligible for BADR. For more detailed advice on HMRC’s TAAR rules for closures, [take a look at the HMRC website](https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm36340). ## Need more guidance on MVL on how to close your Limited Company? Get in touch! If you’re thinking about ways to close your company now or want to know more about the process in case you need to in the future, simply get in touch with your dedicated SG Client Director who will be able to explain MVL and voluntary strike-off in more detail and how much tax you would be likely to pay. Alternatively, your Client Director can put you in touch with our MVL specialist partners who can handle your company closure. If you’re not yet an SG client, [get in contact today](https://sg-accounting.co.uk/contact/) to find out more about how we can help you. **Categories:** limited company, Running your business, Tax **Tags:** Kerry Newman --- ### [The Spring Forecast 2026](https://sg-accounting.co.uk/blog/the-spring-forecast-2026/) **Published:** March 3, 2026 **Author:** Kerry Newman **Content:** In today’s Spring Forecast, Chancellor Rachel Reeves presented the latest economic and fiscal forecast from the Office for Budget Responsibility (OBR), providing an updated outlook for the UK economy. - There were no major new tax or spending announcements, in line with the government’s focus on stability and growth. - The OBR forecasts moderate GDP growth of around 1.1% in 2026, rising to approximately 1.6% in 2027 and 2028, and around 1.5% across 2029–30, slightly lower than previous projections but still indicating steady expansion. - Unemployment is expected to peak later this year before falling to around 4.1% by the end of the current Parliament, while public borrowing is projected to decline over the forecast period, reflecting an improving fiscal position. - The Chancellor highlighted ongoing global uncertainty, particularly rising energy costs linked to geopolitical tensions, but stressed that inflation continues to ease and that fiscal discipline remains central to government policy. While there are no significant new measures directly impacting Limited Company directors or business owners, [we recommend reviewing our Budget 2025 coverage](https://sg-accounting.co.uk/blog/autumn-budget-2025-summary/), which outlines the confirmed upcoming tax changes in detail. ## Spring Statement 2026 – full report The Chancellor held the Spring Statement on 3 March 2026. The government has been keen to have only one tax event per year (the Budget) and so the Spring Statement was intended to provide an interim update on the economy and public finances. Whilst the Chancellor did meet the commitment not to make major tax announcements, there was plenty to say on the economy more generally. Looking back a year, the previous Statement focused on a commitment to increasing defence spending, cuts to the welfare state and economic growth. Over the last year, the majority of those cuts to welfare spending were not supported by backbench MPs and the economy has continued to grow slowly, so what did the Chancellor have to say a year on? The strap line was that current policies mean that the government has the right economic plan for Britain. The Chancellor stated that the ‘…Spring Forecast has shown that the government’s economic plan to cut the cost of living, cut national debt and grow the economy, is the right one.’ Whilst the speech was highly political, the Chancellor specifically referred to three particular areas to show that the government’s policies were working: **Cutting the cost of living** – the OBR’s forecast shows inflation, borrowing and debt interest are falling, whilst investment is rising. **Cutting borrowing** – the OBR’s forecast shows borrowing is down by nearly £18 billion compared to the autumn, with borrowing this year set to be the lowest in six years and falling below the G7 average. **Growing the economy** – the OBR’s forecast shows GDP per person is now set to grow more than was expected in the Budget, with growth of 5.6% over the parliament. That was what the government said but what did the OBR have to say in its 125-page report? The start of the report stated that the fiscal context for the next Budget will remain challenging, so does this mean even more tax rises? It certainly does not appear that tax cuts are on the way anytime soon. Highlights of the report were summarised by the OBR: - productivity growth will pick up to 1% in the medium term - labour supply growth will decline, mainly due to lower net migration and population ageing - GDP growth will slow down to 1.1% in 2026, before averaging 1.6% over the rest of the five-year forecast - inflation will reach its 2% target in late 2026 - public sector net borrowing is projected to fall from 5.2 % of GDP in 2024/25 to 4.3% of GDP this year and then to 1.6% in 2030/31 - weekly wage growth will slow to around 3.5% in 2026 and then average 2.25% - unemployment will rise from 4.75% in 2025 to a peak of 5.33% in 2026, primarily driven by new entrants into the labour market struggling to find work. Of course, the Spring Forecast is exactly that; for example, the effects of the current situation in the Middle East have not been factored into any of the data released by the OBR. The OBR also makes some other important points: - the tax-to-GDP ratio is forecast to increase to a post-war high of 38% of GDP in 2030/31 - there continue to be pressures on the government’s departmental spending plans - there are concerns that the future costs of welfare spending may follow the sharp growth of disability and health caseloads since the pandemic. To summarise, not a great deal of growth appears to be around the corner. ## Tax bands and rates The basic rate band remains at £37,700, with the higher rate threshold remaining at £50,270. The additional rate threshold remains at £125,140. The freeze of these thresholds will continue until April 2031. The NICs Primary Threshold and Lower Profits Limit remain at £12,570. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 up to April 2031. Other employer NICs relief thresholds aligned to the Upper Earnings Limit will also be maintained at this level. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. ### Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish Income Tax rates and bands apply to income such as employment income, self-employed trade profits and property income. The rates and bands for 2026/27 are as follows: | **Band £** | **Rate %** | |---|---| | 0 – 3,967 | 19 | | 3,968 – 16,956 | 20 | | 16,957 – 31,092 | 21 | | 31,093 – 62,430 | 42 | | 62,431 – 125,140 | 45 | | Over 125,140 | 48 | Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. ### Welsh residents Since April 2019 the Welsh Government has had the right to vary the rates of Income Tax payable by Welsh taxpayers (other than tax on savings and dividend income). For 2026/27 the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. ## The personal allowance The Income Tax personal allowance is fixed at the current level of £12,570 and will remain frozen until April 2031. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140. The government will increase the married couple’s allowance and blind person’s allowance from 6 April 2026 by the CPI rate for September 2025 of 3.8%. These become £11,700 and £3,250 respectively. ## Tax on property income Property income is any income from letting land and buildings. Individuals have a Property Allowance. This exempts property income of £1,000 or less. Property income over £1,000 can be offset either by the £1,000 Property Allowance or by deducting relevant expenses. The government is introducing the following separate tax rates for property income from 2027/28: - 22% for basic rate taxpayers - 42% for higher rate taxpayers - 47% for additional rate taxpayers. It remains to be seen whether the Scottish and Welsh governments will follow suit by increasing taxes on property income in the future, as the government is devolving that power to those governments. ## Tax on savings income Savings income is income such as bank and building society interest. The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of Income Tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers. Savings income within the allowance still counts towards an individual’s basic or higher rate band and so may affect the rate of tax paid on savings above the Savings Allowance. Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. This will remain at £5,000 until 5 April 2031. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000. The current tax rates on savings income will be maintained for 2026/27. From 6 April 2027, there will be a 2% increase in the applicable tax rates. The basic rate will increase to 22%, the higher rate will increase to 42% and the additional rate will increase to 47%. These rules apply to the whole of the UK. ## Tax on dividends Currently, the first £500 of dividends is chargeable to tax at 0% (the Dividend Allowance). This £500 is retained for 2026/27. From 6 April 2026, there will be a 2% increase in the ordinary and upper rates of Income Tax applicable to dividends. The additional rate will remain unchanged at 39.35%. Dividends received above the Dividend Allowance will be taxed at the following rates for 2026/27: - 10.75% for basic rate taxpayers - 35.75% for higher rate taxpayers - 39.35% for additional rate taxpayers. Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the Dividend Allowance. To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed. These rules apply to the whole of the UK. | ### Comment | |---| | There had been some speculation before the Budget about charging National Insurance contributions on investment income. Increasing rates on dividend income is a similar way of raising revenue. Unlike National Insurance contributions, though, it will affect those over state retirement age. In addition, tax computations will become increasingly complex. | ## Pension tax limits For 2026/27: - The Annual Allowance (AA) is £60,000. - Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000. - The Lump Sum Allowance, which relates to the general maximum that may be able to be taken as a tax-free lump sum, is £268,275. - The Lump Sum and Death Benefit Allowance, which relates to the general maximum that may be able to be taken as a tax-free lump sum in certain circumstances, is £1,073,100. | ### Comment | |---| | There had been much speculation that some of the above limits would be reduced or that the amount of tax free lump sum would be cut but such changes did not happen. | ## Individual Savings Accounts For 2026/27, the limits are as follows: - Individual Savings Accounts (ISAs) £20,000 - Junior ISAs £9,000 - Lifetime ISAs £4,000 (excluding government bonus) - Child Trust Funds £9,000. These limits will remain frozen until 5 April 2031. From 6 April 2027, the annual ISA cash limit will be set at £12,000. The remaining £8,000 will be designated for stocks and shares ISA investment. This restriction will not apply for those over the age of 65, where the cash ISA limit will remain at £20,000. | ### Comment | |---| | This change had been widely trailed by the government. It appears as though the government wishes more people to use their ISA allowance on shares rather than cash, so this seems to be an attempt to ‘force’ that change. However, with interest rates falling and the volatility that can arise with stocks and shares, quite whether this change will have the desired effect remains to be seen. | ## Employment ## National Insurance contributions ### Employees For 2026/27 the rates of Class 1 employee NICs are 8% and 2%. The employer rate is 15%. The Secondary Threshold is the point at which employers become liable to pay NICs on an individual employee’s earnings and is currently set at £5,000 a year for 2026/27. The government has announced that this will be maintained at this level until April 2031. The Employment Allowance allows eligible businesses with employer NICs bills to deduct £10,500 from their employer NICs bill. ### The self-employed For 2026/27 the rates of Class 4 self-employed NICs are 6% and 2%. For Class 2 NICs from 6 April 2026: - Self-employed people with profits of £7,105 and above get access to contributory benefits, including the State Pension, through a National Insurance Credit, without paying Class 2 NICs. - Those with profits under £7,105 may pay Class 2 NICs voluntarily to get access to contributory benefits, including the State Pension. The rate of Class 2 contributions will be £3.65 per week ### Employer NICs relief for veterans The government will extend the employer NICs relief for employers hiring qualifying veterans to April 2028. This means that businesses continue to pay no employer NICs up to annual earnings of the Veterans Upper Secondary Threshold of £50,270 for the first year of a veteran’s employment in a civilian role. ## National Living Wage and National Minimum Wage The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2026. The rates which will apply are as follows: | | NLW | NMW 18-20 | NMW 16-17 | Apprentices | |---|---|---|---|---| | From 1 April 2026 | £12.71 | £10.85 | £8.00 | £8.00 | The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over. ## Taxable benefits for company cars The rates of tax for company cars are amended for 2026/27: - the charge for zero emission cars rises from 3% to 4% - the charge for other cars with emissions below 75g/km increases by 1% - the maximum charge of 37% remains. The government has confirmed increases to the benefit in kind rates for company cars for tax years up to and including 2029/30. The government announced that it is introducing a temporary easement to mitigate the increasing benefit in kind tax liabilities of plug-in hybrid electric vehicle (PHEV) company cars due to new emission standards. The easement will apply retrospectively from 1 January 2025 to 5 April 2028. Transitional arrangements will apply to certain PHEVs until 5 April 2031. ### Car fuel benefit charge The government will increase the car fuel benefit charge from 6 April 2026 to £29,200. ## Company vans The government will increase the Van Benefit Charge and the Van Fuel Benefit Charges from 6 April 2026 to £4,170 and £798 respectively. ## Mandating the reporting of benefits in kind via payroll software The government has confirmed that the use of payroll software to report and pay tax on benefits in kind will become mandatory, in phases, from April 2027. This will apply to Income Tax and Class 1A NICs. ## Changes to salary sacrifice for pensions from April 2029 The government is changing how salary sacrifice for pension contributions works. Salary sacrifice is when you agree to reduce your gross salary or sacrifice a bonus and, in return, your employer pays the same amount into your pension. From April 2029, only the first £2,000 of employee pension contributions through salary sacrifice each year will be exempt from NICs. Contributions through salary sacrifice, like all pension contributions, will still be exempt from Income Tax (subject to the usual limits). Employers and employees can still make contributions above £2,000 through salary sacrifice arrangements. However, employee contributions above this amount will be subject to employer and employee NICs like other employee workplace pension contributions. Employers will need to report the total amount sacrificed through their existing payroll. All employer pension contributions will continue to be free of NICs. Employees who choose to salary sacrifice to maintain eligibility for Tax Free Childcare or minimise the High Income Child Benefit Charge can keep doing so. | ### Comment | |---| | The changes to salary sacrifice lack detail but what is clear is that employers are likely to pick up another large National Insurance increase from 2029. Those businesses are going to be able to quantify the financial effect now and, on top of rises in both the NMW and employers’ National Insurance, it will be interesting to see the effect on recruitment, etc. over the next few years. Bear in mind that affected employees will also see a rise in their National Insurance contributions, which would appear to be an increase for ‘working people’. Rather strangely, the Income Tax reliefs available on pension contributions are retained in full for both employers and employees. It is widely acknowledged that many employees do not save enough for their retirement. This change does not seem likely to encourage employers or employees to contribute more to pension pots. | ## Capital Taxes ## Capital Gains Tax ### Capital Gains Tax rates The Capital Gains Tax rates remain unchanged for 2026/27. ### Capital Gains Tax annual exemption The annual exempt amount will remain at £3,000 for 2026/27. ### Employee Ownership Trusts The current relief available for qualifying disposals by business owners selling their shares to Employee Ownership Trusts (EOTs) is a 100% exemption of any gain. From 26 November 2025, the relief only exempts 50% of the gain. Business Asset Disposal Relief and Investors’ Relief will not be available where the 50% exemption has been claimed. The remaining 50% of the gain on disposal will not form part of the disposer’s chargeable gain. Instead, 50% of the gain will be held over and deducted from the trustees’ acquisition cost. This will mean that it will come into charge on any subsequent disposal or deemed disposal of the shares by the trustees of the EOT. ### Incorporation Relief The government will introduce a requirement for taxpayers to actively claim incorporation relief for transfers of a business to a company on or after 6 April 2026. The relief previously applied automatically. ### Business Asset Disposal Relief The rate applying for individuals claiming Business Asset Disposal Relief and Investors’ Relief will increase to 18% for disposals made on or after 6 April 2026. ### Carried interest rates and reform From April 2026, all carried interest will be taxed within the income tax framework. A multiplier of 72.5% will be applied to any qualifying interest brought within the charge. ## Inheritance Tax ### Inheritance Tax nil rate bands The nil rate band has been frozen at £325,000 since 2009 and will continue to be frozen until 5 April 2031. An additional nil rate band, called the ‘residence nil rate band’ is also frozen until 5 April 2031 at the current £175,000 level, as is the residence nil rate band taper starting at £2 million. ### Unused pension funds and death benefits The government will bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax (IHT) purposes from 6 April 2027. All death in service benefits payable from registered pension schemes will be excluded from the value of an individual’s estate for IHT purposes. The personal representatives will be responsible for paying any IHT due on unused pension funds and death benefits in a person’s estate. However, pension beneficiaries of registered pension schemes will be able to request the pension scheme administrator pay their IHT liability directly to HMRC in specific circumstances. They may also direct scheme administrators to withhold 50% of taxable benefits for up to 15 months. | ### Comment | |---| | The rules may potentially have significant effects for those with pension funds. For example, John made contributions to his private pension scheme. At the date of his death, aged 90, the pension fund is valued at £400,000. The remainder of his estate is valued at £1,000,000. Currently, the IHT bill is £270,000. This will rise to £430,000 under the new rules. | ### Agricultural Property Relief & Business Property Relief From 6 April 2026, agricultural and business property will continue to benefit from the 100% IHT relief up to a limit of £2.5 million. The limit is a combined limit for both agricultural and business property. Such property in excess of the limit will benefit from a 50% relief. The £2.5 million limit applies per person and is refreshed every seven years. From 6 April 2026, this allowance will be transferable between married couples or civil partners. This will include where the first death was before 6 April 2026. There may be a further £2.5 million allowance for trusts in certain situations but the rules are complex. The £2.5 million limits for both individuals and trusts will be frozen until 6 April 2031. | ### Comment | |---| | There has been a great deal of press coverage reflecting the unhappiness of farmers with these changes. However, the changes are much broader and potentially affect the owners of many SMEs in the UK. Early IHT planning becomes critical under the new rules. The transferability of the allowance between spouses/civil partners seems to be recognition of taxpayer concerns, as does the increase in the limit from the £1 million previously proposed to £2.5 million. However, there will still be large numbers of business owners affected by the changes. | ## Business ## Corporation Tax The government has confirmed that the rates of Corporation Tax will remain unchanged, which means that, from 1 April 2026, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective Corporation Tax rate. | ### Comment | |---| | The government has committed to capping the main rate of Corporation Tax at 25% for the duration of the Parliament. | The penalty for taxpayers submitting a Corporation Tax return late will double for returns for which the filing date is on or after 1 April 2026. ## Capital allowances The Full Expensing rules for companies allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is new and unused. Similar rules apply to integral features and long-life assets at a rate of 50%. The government will reduce the main rate Writing Down Allowance (WDA) from 18% to 14% per year from 1 April 2026 for Corporation Tax purposes and 6 April 2026 for Income Tax purposes. For businesses with chargeable periods which span 1 April (Corporation Tax) or 6 April (Income Tax), a hybrid rate will apply. The WDA on the special rate pool remains at 6% per year. For expenditure incurred on or after 1 January 2026, the government will introduce a new first year allowance (FYA) of 40% for all businesses on main rate assets, including most expenditure on assets for leasing. Cars, second-hand assets and assets for leasing overseas will not be eligible. The Annual Investment Allowance is available to both incorporated and unincorporated businesses. It gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit remains at £1 million. The 100% FYA for qualifying expenditure on zero-emission cars and the 100% FYA for qualifying expenditure on plant or machinery for electric vehicle chargepoints have been extended to 31 March 2027 for Corporation Tax purposes and 5 April 2027 for Income Tax purposes. | ### Comment | |---| | The AIA was originally introduced as a simplification measure due to the plethora of FYAs at the time. It just goes to show, if you hang around long enough in tax everything goes full circle, as we now have the AIA and a plethora of FYAs! | ## Targeted Research and Development Advance Assurance Service The government will pilot a targeted advance assurance service from spring 2026. This will enable small and medium-sized enterprises to gain clarity on key aspects of their Research and Development (R&D) tax relief claims before submission to HMRC. A summary of responses to the advance clearance consultation will also be published. ## Enterprise Investment Scheme and Venture Capital Trusts investment limit increase and restructure The government has announced significant changes to the limits applying to the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) from 6 April 2026. The gross assets requirement that a company must not exceed for EIS and VCTs will increase from £15 million to £30 million immediately before the issue of the shares, and from £16 million to £35 million immediately after the issue. The annual investment limit that companies can raise will increase from £5 million to £10 million. For Knowledge-Intensive Companies (KICs), the annual investment limit will increase from £10 million to £20 million. The company’s lifetime investment limit will increase to £24 million and for KICs to £40 million. The Income Tax relief that can be claimed by an individual investing in VCTs will decrease from 30% to 20%. ## Expanding the eligibility limits of the Enterprise Management Incentives scheme The government is also increasing certain limits relating to the Enterprise Management Incentives (EMI) scheme. For EMI contracts granted on or after 6 April 2026, the employee limit will increase from 250 employees to 500 employees, the gross assets test will be increased from £30 million to £120 million, and the company share option limit will be increased from £3 million to £6 million. The limit on the exercise period will increase to 15 years, and will also apply retrospectively to existing EMI contracts which have not already expired or been exercised. **Categories:** Finance, limited company, News, Running your business, Spring Forecast, Tax, VAT **Tags:** Kerry Newman --- ### [What announcements were made in the Autumn Budget 2025?](https://sg-accounting.co.uk/blog/autumn-budget-2025-summary/) **Published:** November 26, 2025 **Author:** Kerry Newman **Content:** With so much pre-Budget speculation, we were expecting a long wait for the detail – but events moved faster than anyone anticipated. In an unprecedented slip, the Office for Budget Responsibility (OBR) accidentally published its Economic and Fiscal Outlook around an hour before the Chancellor, Rachel Reeves, delivered her Budget speech. The OBR has apologised and an investigation is under way; Budget secrecy matters because markets and taxpayers rely on a level playing field when major fiscal decisions are announced. ## The headline: a tax-raising Budget As widely expected, this Budget increases the overall tax take. The OBR forecasts **around £26bn of additional tax revenue** over the coming years, making this one of the biggest tax-raising Budgets in over a decade. ### Key measures affecting limited company contractors Below are the main points most relevant to our SG Accounting clients operating through limited companies: ### Income tax thresholds frozen until 2031 (fiscal drag) Personal allowance and higher-rate thresholds remain frozen, meaning more of your income may be pulled into higher tax bands over time. In real terms, this squeezes take-home pay as wages rise with inflation. ### Dividend tax up by 2% from April 2026 Dividend rates rise by 2 percentage points for basic and higher-rate taxpayers. This directly impacts the common low-salary/high-dividend extraction model used by contractors outside IR35. The additional rate remains unchanged at 39.35%. New Dividend Rates (from April 2026): - Basic rate: 10.75% - Higher rate: 35.75% To put the dividend change into context: - A limited company contractor outside IR35 taking **around £40,000 of dividends a year** will pay roughly **£800 more** in dividend tax from **April 2026**. - At **£90,000 of dividends a yea**r, the extra dividend tax rises to about **£1,800 per year** from **April 2026**. ### Savings and property income tax up by 2% from April 2027 The same 2-point uplift will apply to savings and property tax rates a year later. Savings / Property Income Rates (from April 2027): Basic rate: 22% Higher rate: 42% Additional rate: 47% ### Starting Rate for Savings retained The **Starting Rate for Savings** will remain at **£5,000** for 2026/27 and stay at this level until **5 April 2031**. This allows individuals with less than **£17,570** of employment or pension income to receive up to **£5,000 of savings income tax-free**. ### Capital allowances and new First Year Allowance A new **40% First Year Allowance (FYA)** for main-rate expenditure will be introduced from **1 January 2026**. This covers most main-rate assets, including expenditure on assets for leasing and expenditure by unincorporated businesses. From **1 April 2026** (Corporation Tax) and **6 April 2026** (Income Tax), main-rate **Writing-Down Allowances (WDAs)** will reduce from **18% to 14%.** ### Capital allowances: 100% FYA for zero-emission cars and EV chargepoints extended The government will extend the **100% first-year allowances** for qualifying expenditure on **zero emission cars**, and qualifying plant or machinery for **EV chargepoints**, for a further year. These reliefs will now run until **31 March 2027** for Corporation Tax purposes and **5 April 2027** for Income Tax purposes. ### New mileage-based EV tax from April 2028 A road-use style levy will apply to electric and hybrid vehicles: 3p per mile for EVs and 1.5p per mile for hybrids. This is worth factoring in if you run a company vehicle or are planning a switch. ### Minimum wage increases From **1 April 2026**, the National Living Wage will increase by **4.1%** to **£12.71 per hour**. The National Minimum Wage for: - **18–20** year olds will rise by **8.5% to £10.85** per hour - **16–17 year olds and apprentices** will rise by **6.0% to £8.00 per hour** ### Cash ISA limit reduced to £12,000 From **6 April 2027**, the annual **Cash ISA** limit will be reduced to **£12,000**, within the overall ISA allowance of **£20,000**. The annual subscription limits will remain as follows until **5 April 2031**: - **£20,000** for ISAs - **£4,000** for Lifetime ISAs - **£9,000** for Junior ISAs and Child Trust Funds Savers over **65** will still be able to save up to **£20,000** per year in a Cash ISA. Financial services firms will also introduce clearer tools to help people find suitable UK investments. ### High-value council tax surcharge from April 2028 Homes valued over **£2m** will face a new annual surcharge, expected to range from **£2,500** up to **£7,500** per year for properties valued above **£5m**. ### Salary sacrifice pension cap from April 2029 A **£2,000 cap** will be introduced on tax-free pension contributions made via salary sacrifice. Most limited company contractors should be largely unaffected, as contractor pension funding is typically structured as **employer contributions**, not salary sacrifice. ### Increases to Corporation Tax late-filing penalties The government will **double the penalty** for submitting a Corporation Tax return late from **1 April 2026**. This change will be legislated for in the **Finance Bill 2025–26**. ### Penalty reform for Self Assessment and VAT - No l**ate submission penalties** will apply to quarterly updates during the **2026/27 tax year** for Income Tax Self Assessment (ITSA) taxpayers who are required to join Making Tax Digital (MTD). - The new penalty regime for late submission and late payment will apply to all **ITSA taxpayers not already in the new system** from **6 April 2027**. - Penalties for **late payment of ITSA and VAT** will increase from **1 April 2027**. These changes will be introduced via secondary legislation. ## Autumn Budget – Full report ## Introduction Chancellor of the Exchequer Rachel Reeves set out tax-raising measures worth up to £26 billion in the Autumn Budget on 26 November 2025. The increases will be achieved through a range of measures, including extending the freeze on Income Tax thresholds for a further three years. ### Tax increases In addition to maintaining Income Tax thresholds, taxes on property, dividend and saving income will be increased. The Budget also announced employee and employer National Insurance contributions (NICs) on salary sacrifice pension contributions above £2,000 a year and introduced a tax on homes valued at £2 million or more. ### That is my choice On spending, Ms Reeves took action to cut energy bills, freeze rail fares and end the two-child benefit cap. Ms Reeves said: ‘I can tell you today that, for every family we are keeping our promise to get energy bills down and cut the cost of living with £150 taken off the average household energy bill from April. ‘Money off bills, and in the pockets of working people. That is my choice.’ ## Personal Tax ### Tax bands and rates The basic rate band remains at £37,700, with the higher rate threshold remaining at £50,270. The additional rate threshold remains at £125,140. The freeze of these thresholds will continue until April 2031. The NICs Primary Threshold and Lower Profits Limit remain at £12,570. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 up to April 2031 as well. Other employer NICs relief thresholds aligned to the Upper Earnings Limit will also be maintained at this level. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. #### Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish Income Tax rates and bands apply to income such as employment income, self-employed trade profits and property income. The rates and bands for 2026/27 will be announced in the Scottish Budget. Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. #### Welsh residents Since April 2019 the Welsh Government has had the right to vary the rates of Income Tax payable by Welsh taxpayers (other than tax on savings and dividend income). For 2025/26 the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. This will continue for 2026/27. ### The personal allowance The Income Tax personal allowance is fixed at the current level of £12,570 and will remain frozen until April 2031. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140. The government will increase the married couple’s allowance and blind person’s allowance from 6 April 2026 by the CPI rate for September 2025 of 3.8%. ### Tax on property income Property income is any income from letting land and buildings. Individuals have a Property Allowance. This exempts property income of £1,000 or less. Property income over £1,000 can be offset either by the £1,000 Property Allowance or by deducting relevant expenses. The government is introducing the following separate tax rates for property income from 2027/28: - 22% for basic rate taxpayers - 42% for higher rate taxpayers - 47% for additional rate taxpayers. ### Tax on savings income Savings income is income such as bank and building society interest. The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of Income Tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers. Savings income within the allowance still counts towards an individual’s basic or higher rate band and so may affect the rate of tax paid on savings above the Savings Allowance. Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. This will remain at £5,000 until 5 April 2031. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000. The current tax rates on savings income will be maintained for 2026/27. From 6 April 2027, there will be a 2% increase in the applicable tax rates. The basic rate will increase to 22%, the higher rate will increase to 42% and the additional rate will increase to 47%. ### Tax on dividends Currently, the first £500 of dividends is chargeable to tax at 0% (the Dividend Allowance). This £500 is retained for 2026/27. These rules apply to the whole of the UK. From 6 April 2026, there will be a 2% increase in the ordinary and upper rates of Income Tax applicable to dividends. The additional rate will remain unchanged at 39.35% Dividends received above the Dividend Allowance will be taxed at the following rates for 2026/27: - 10.75% for basic rate taxpayers - 35.75% for higher rate taxpayers - 39.35% for additional rate taxpayers. Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the Dividend Allowance. To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed. ### Income Tax ordering rules The Income Tax ordering rules will change from 6 April 2027. The personal allowance will be deducted from employment, trading or pension income first. Currently, individuals can choose which income the allowance is offset against. ### Pension tax limits For 2026/27: - The Annual Allowance (AA) is £60,000. - Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000. - The Lump Sum Allowance, which relates to the general maximum that may be able to be taken as a tax-free lump sum, is £268,275. - The Lump Sum and Death Benefit Allowance, which relates to the general maximum that may be able to be taken as a tax-free lump sum in certain circumstances, is £1,073,100. ### Individual Savings Accounts For 2026/27, the limits are as follows: - Individual Savings Accounts (ISAs) £20,000 - Junior ISAs £9,000 - Lifetime ISAs £4,000 (excluding government bonus) - Child Trust Funds £9,000. These limits will remain frozen until 5 April 2031. From 6 April 2027, the annual ISA cash limit will be set at £12,000. The remaining £8,000 will be designated for stocks and shares ISA investment. This restriction will not apply for those over the age of 65, where the cash ISA limit will remain at £20,000. ## Employment ### National Insurance contributions #### Employees For 2025/26 the rates of Class 1 employee NICs are 8% and 2%. The employer rate is 15%. The Secondary Threshold is the point at which employers become liable to pay NICs on an individual employee’s earnings and is currently set at £5,000 a year from 6 April 2025. The government announced that this will be maintained at this level until April 2031. The Employment Allowance allows eligible businesses with employer NICs bills to deduct £10,500 from their employer NICs bill. #### The self-employed For 2025/26 the rates of Class 4 self-employed NICs are 6% and 2%. These rates remain the same for 2026/27. For Class 2 NICs from 6 April 2025: - Self-employed people with profits of £6,845 and above get access to contributory benefits, including the State Pension, through a National Insurance Credit, without paying Class 2 NICs. - Those with profits under £6,845 who pay Class 2 NICs voluntarily to get access to contributory benefits, including the State Pension, will continue to be able to do so. #### Changes for 2026/27 The government will increase the Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) from 2026/27. For those paying voluntarily, the government will also increase Class 2 and Class 3 NICs for 2026/27. The LEL will be £6,708 per annum (£129 per week) and the SPT will be £7,105 per annum. The main Class 2 rate will be £3.65 per week and the Class 3 rate will be £18.40 per week. #### Employer NICs relief for veterans The government will extend the employer NICs relief for employers hiring qualifying veterans to April 2028. This means that businesses continue to pay no employer NICs up to annual earnings of the Veterans Upper Secondary Threshold of £50,270 for the first year of a veteran’s employment in a civilian role. ### National Living Wage and National Minimum Wage The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2026. The rates which will apply are as follows: | | NLW | 18-20 | 16-17 | Apprentices | |---|---|---|---|---| | From 1 April 2026 | £12.71 | £10.85 | £8.00 | £8.00 | The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over. ### Taxable benefits for company cars The rates of tax for company cars are amended for 2026/27: - the charge for zero emission cars rises from 3% to 4% - the charge for other cars with emissions below 75g/km increases by 1% - the maximum benefit of 37% remains. The government has confirmed increases to the benefit in kind rates for company cars for tax years up to and including 2029/30. The government announced that it is introducing a temporary easement to mitigate the increasing benefit in kind tax liabilities of plug-in hybrid electric vehicle (PHEV) company cars due to new emission standards. The easement will apply retrospectively from 1 January 2025 to 5 April 2028. Transitional arrangements will apply to certain PHEVs until 5 April 2031. #### Car fuel benefit charge The government will increase the car fuel benefit charge from 6 April 2026. ### Company vans The government will increase the Van Benefit Charge and the Van Fuel Benefit Charges from 6 April 2026. ### Mandating the reporting of benefits in kind via payroll software The government confirms that the use of payroll software to report and pay tax on benefits in kind will become mandatory, in phases, from April 2027. This will apply to income tax and Class 1A NICs. ### Tackling tax non-compliance in the umbrella company market To tackle the significant levels of tax avoidance and fraud in the umbrella company market, the government will make recruitment agencies responsible for accounting for PAYE and Class 1 NICs on payments made to workers that are supplied via umbrella companies. Legislation will be introduced to make employment agencies or end clients joint and severally liable for any amount required to be accounted for under the PAYE provisions, where an umbrella company forms part of a labour supply chain. Further legislation will be introduced which will impose an equivalent joint and several liability for NICs purposes. This will allow HMRC to pursue an agency in the first instance for any payroll taxes that a non-compliant umbrella company fails to remit to HMRC on their behalf. The end client will be liable if contracting directly with an umbrella company. Where there is no agency, the responsibility will fall to the end client business. This will take effect from 6 April 2026. The measure will protect workers from large, unexpected tax bills caused by unscrupulous behaviour from non-compliant umbrella companies. ### Ending contrived car ownership schemes The government is amending the benefit in kind rules so that vehicles provided through employee car ownership arrangements will be deemed to be taxable benefits when made available on restricted terms. Under these arrangements an employer or a third party sells a car to an employee, often via a loan with no repayment terms and negligible interest, then buys it back after a short period. These arrangements mean those benefiting don’t pay company car tax, which other employees pay, and so this measure will seek to level the playing field. Arrangements existing prior to commencement will continue without a change in treatment until the earlier of the arrangement being varied, renewed, or 6 April 2032. There will also be an exemption from the benefit in kind rules for vehicles provided on arm’s length terms within the motor industry. The government has confirmed its intention to delay the operative date to 6 April 2030. ### Changes to salary sacrifice for pensions from April 2029 The government is changing how salary sacrifice for pension contributions works. Salary sacrifice is when you agree to reduce your gross salary or sacrifice a bonus and, in return, your employer pays the same amount into your pension. From April 2029, only the first £2,000 of employee pension contributions through salary sacrifice each year will be exempt from NICs. Contributions through salary sacrifice, like all pension contributions, will still be exempt from Income Tax (subject to the usual limits). Employers and employees can still make contributions above £2,000 through salary sacrifice arrangements. However, employee contributions above this amount will be subject to employer and employee NICs like other employee workplace pension contributions. Employers will need to report the total amount sacrificed through their existing payroll. All employer pension contributions will continue to be free of NICs. Employees, as well as employers, will pay NICs on the amount above £2,000 for employee contributions through salary sacrifice. Employees who choose to salary sacrifice to receive Tax Free Childcare or Child Benefit can keep doing so. ### Expanding workplace benefits relief This measure will introduce new legislative exemptions for the reimbursement of eye tests, flu vaccines and home working equipment. Under current law, the exemption only applies where the employer provides the benefit directly. This change will ensure that reimbursements are treated in the same way. This will have effect on or after 6 April 2026. ### Removal of tax relief on non-reimbursed homeworking expenses This measure will remove the tax relief available to employees who have incurred additional household costs if they are required to work from home. These costs include increased household utility costs and business telephone calls. It will only apply to those employees who have not had these costs reimbursed by their employer. This will not impact the existing ability for employers that reimburse employees for costs relating to homeworking where eligible without deducting Income Tax and NICs. This will take effect from 6 April 2026. ## Business ### Corporation Tax The government has confirmed that the rates of Corporation Tax will remain unchanged, which means that, from April 2026, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective Corporation Tax rate. | #### Comment | |---| | The government has committed to capping the main rate of Corporation Tax at 25% for the duration of the Parliament. | The penalty for taxpayers submitting a Corporation Tax return late will double for returns for which the filing date is on or after 1 April 2026. ### Capital allowances The Full Expensing rules for companies allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is new and unused. Similar rules apply to integral features and long-life assets at a rate of 50%. The government will reduce the main rate Writing Down Allowance (WDA) from 18% to 14% per year from 1 April 2026 for Corporation Tax purposes and 6 April 2026 for Income Tax purposes. For businesses with chargeable periods which span 1 April (Corporation Tax) or 6 April (Income Tax), a hybrid rate will apply. The WDA on the special rate pool remains at 6% per year. For expenditure incurred on or after 1 January 2026, the government will introduce a new first year allowance (FYA) of 40% for all businesses on main rate assets, including most expenditure on assets for leasing. Cars, second-hand assets and assets for leasing overseas will not be eligible. The Annual Investment Allowance is available to both incorporated and unincorporated businesses. It gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit remains at £1 million. The 100% FYA for qualifying expenditure on zero-emission cars and the 100% FYA for qualifying expenditure on plant or machinery for electric vehicle chargepoints have been extended to 31 March 2027 for Corporation Tax purposes and 5 April 2027 for Income Tax purposes. ### Targeted Research and Development Advance Assurance Service The government will pilot a targeted advance assurance service from spring 2026. This will enable small and medium-sized enterprises to gain clarity on key aspects of their Research and Development (R&D) tax relief claims before submission to HMRC. A summary of responses to the advance clearance consultation will also be published. ### Advance Tax Certainty Service A new Advance Tax Certainty Service will be launched in July 2026. This will provide major investment projects in the UK with certainty on the application of tax law to their specific circumstances. Qualifying project expenditure must be at least £1 billion. Subject to full initial disclosure of all material facts, a clearance will bind HMRC for five years, and may be renewed for a further five years. ### Enterprise Investment Scheme and Venture Capital Trusts investment limit increase and restructure The government has announced significant changes to the limits applying to the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) from 6 April 2026. The gross assets requirement that a company must not exceed for EIS and VCTs will increase from £15 million to £30 million immediately before the issue of the shares, and from £16 million to £35 million immediately after the issue. The annual investment limit that companies can raise will increase from £5 million to £10 million. For Knowledge-Intensive Companies (KICs), the annual investment limit will increase from £10 million to £20 million. The company’s lifetime investment limit will increase to £24 million and for KICs to £40 million. The Income Tax relief that can be claimed by an individual investing in VCTs will decrease from 30% to 20%. ### Expanding the eligibility limits of the Enterprise Management Incentives scheme The government is also increasing certain limits relating to the Enterprise Management Incentives (EMI) scheme. For EMI contracts granted on or after 6 April 2026, the employee limit will increase from 250 employees to 500 employees, the gross assets test will be increased from £30 million to £120 million, and the company share option limit will be increased from £3 million to £6 million. The limit on the exercise period will increase to 15 years, and will also apply retrospectively to existing EMI contracts which have not already expired or been exercised. ### UK Listing Relief The government has announced an exemption from the 0.5% Stamp Duty Reserve Tax (SDRT) charge on agreements to transfer securities of a company whose shares are newly listed on a UK regulated market. This measure will have effect for agreements to transfer made on or after 27 November 2025. The exemption will apply for a three-year period from the listing of the company’s shares. The exemption will not apply to the 1.5% SDRT charge, or where the transfer forms part of a merger or takeover where there is a change of control. ## Capital Taxes ### Capital Gains Tax #### Capital Gains Tax rates The Capital Gains Tax rates remain unchanged for 2026/27. #### Capital Gains Tax annual exemption The annual exempt amount will remain at £3,000 for 2026/27. #### Employee Ownership Trusts The current relief available for qualifying disposals by business owners selling their shares to Employee Ownership Trusts (EOTs) is a 100% exemption of any gain. From 26 November 2025, the relief will only exempt 50% of the gain. Business Asset Disposal Relief and Investors’ Relief will not be available where the 50% exemption has been claimed. The remaining 50% of the gain on disposal will not form part of the disposer’s chargeable gain. Instead, 50% of the gain will be held over and deducted from the trustees’ acquisition cost. This will mean that it will come into charge on any subsequent disposal or deemed disposal of the shares by the trustees of the EOT. #### Incorporation Relief The government will introduce a requirement for taxpayers to actively claim incorporation relief for transfers of a business to a company on or after 6 April 2026. The relief previously applied automatically. #### Business Asset Disposal Relief The rate applying for individuals claiming Business Asset Disposal Relief and Investors’ Relief will increase to 18% for disposals made on or after 6 April 2026. #### Carried interest rates and reform From April 2026, all carried interest will be taxed within the income tax framework. A multiplier of 72.5% will be applied to any qualifying interest brought within the charge. ### Inheritance Tax #### Inheritance Tax nil rate bands The nil rate band has been frozen at £325,000 since 2009 and will continue to be frozen until 5 April 2031. An additional nil rate band, called the ‘residence nil rate band’ is also frozen until 5 April 2031 at the current £175,000 level, as is the residence nil rate band taper starting at £2 million. #### Unused pension funds and death benefits The government will bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax (IHT) purposes from 6 April 2027. All death in service benefits payable from registered pension schemes will be excluded from the value of an individual’s estate for IHT purposes. The personal representatives will be responsible for paying any IHT due on unused pension funds and death benefits in a person’s estate. However, pension beneficiaries of registered pension schemes will be able to request the pension scheme administrator pay their IHT liability directly to HMRC in specific circumstances. They may also direct scheme administrators to withhold 50% of taxable benefits for up to 15 months. | #### Comment | |---| | The rules may potentially have significant effects for those with pension funds. For example, John made contributions to his private pension scheme. At the date of his death, aged 90, the pension fund is valued at £400,000. The remainder of his estate is valued at £1,000,000. Currently, the IHT bill is £270,000. This will rise to £430,000 under the new rules. | #### Agricultural Property Relief & Business Property Relief From 6 April 2026, agricultural and business property will continue to benefit from the 100% IHT relief up to a limit of £1 million. The limit is a combined limit for both agricultural and business property. Such property in excess of the limit will benefit from a 50% relief. The £1 million limit applies per person and is refreshed every seven years. From 6 April 2026, this allowance will be transferable between married couples or civil partners. This will include where the first death was before 6 April 2026. There may be a further £1 million allowance for trusts in certain situations but the rules are complex. The £1 million limits for both individuals and trusts will be frozen until 6 April 2031. | #### Comment | |---| | There has been a great deal of press reflecting the unhappiness of farmers with these changes. However, the changes are much broader and potentially affect the owners of many SMEs in the UK. Early IHT planning becomes critical under the new rules. The transferability of the allowance between spouses/civil partners seems to be recognition of taxpayer concerns. | #### Cap for excluded property in trusts With effect from 6 April 2025, the government has retrospectively put in place a cap of £5 million for excluded property held in trust as at 30 October 2024. This cap applies to settled property which was excluded property situated outside the UK at the time of the relevant charge. The £5 million cap applies to each ten-year cycle. ## Other Matters ### The VAT registration threshold From 1 April 2026 the VAT registration threshold remains at £90,000 and the deregistration threshold at £88,000. ### Making Tax Digital for Income Tax Self Assessment The government is committed to delivering Making Tax Digital for Income Tax Self Assessment, which starts in April 2026 for those with qualifying income over £50,000. The government will expand the rollout of the programme to those with incomes over £30,000 in April 2027 and £20,000 in April 2028. However, the government will not proceed with Making Tax Digital for Corporation Tax. ### Enforcement and tax collection The government has announced a variety of compliance initiatives, which include the following: - investing further in HMRC’s debt management work and publishing a new tax debt strategy which outlines plans to deliver year-on-year reductions to the overall tax debt balance as a percentage of tax receipts - requiring Income Tax Self Assessment taxpayers with Pay As You Earn (PAYE) income to pay more of their Self Assessment liabilities in-year via PAYE from April 2029 - investing in HMRC to modernise the tax system and help taxpayers get their taxes right first time through greater digitalisation. This investment will improve how HMRC uses information from third parties, and to build new technology to increase the use of data-driven prompts to help taxpayers avoid errors when submitting tax returns - investing £64 million over the next five years in HMRC’s existing partnerships with private sector debt collection agencies to collect more tax debt. In addition, from April 2029 businesses will be required to issue all VAT invoices as e-invoices, with a roadmap on implementation to be published next year. | #### Comment | |---| | The government is attempting to close the tax gap by pursuing those who try to bend or break the rules, collecting more unpaid taxes and modernising the tax system. This is designed to take the total additional revenue raised by closing the tax gap this Parliament to £10 billion in 2029/30. | ### High Value Council Tax Surcharge The current Council Tax system uses property values from 1991. From April 2028, properties valued at £2 million or more will be liable to a new High Value Council Tax Surcharge (HVCTS). The HVCTS will be staggered depending on the value of the property. For property over £2 million, the annual charge will be £2,500. For property valued between £2.5 – £3.5 million, the annual charge will be £3,500 and for those properties valued between £3.5 – £5 million, the annual charge will be £5,000. Properties valued in excess of £5 million will have an annual charge of £7,500. The surcharge will be collected alongside the existing Council Tax due for the property. ### Employment The government is working to extend right to work checks to cover businesses hiring gig economy and zero-hours workers. This will restrict the ability of employers to take advantage of illegal workers and ensure that legitimate businesses acting lawfully will not be undercut on labour costs by those who exploit the system. The government will set up a dedicated ‘hidden economy’ team within the new Fair Work Agency from April 2026 to take action in sectors known to have breaches of employment rights legislation alongside illegal working and tax issues. The team will initially target hand car washes but will then move onto other high‑risk areas. ### Electric Vehicle Excise Duty The government is introducing Electric Vehicle Excise Duty (eVED), a new mileage charge for electric and plug-in hybrid cars, which will come into effect from April 2028. Drivers will pay for their mileage alongside their existing VED. The government will work closely with industry and motoring representative groups on the delivery of the new tax. The tax paid by EV drivers will be around half the fuel duty rate paid by the average petrol/diesel driver, with a reduced rate for plug-in hybrid drivers. When eVED takes effect in April 2028, an average EV driver will pay around £240 per year or £20 per month. Other vehicle types, such as vans, buses, motorcycles, coaches and HGVs, will be out of scope of eVED when it is introduced, with the transition to electric power for these vehicle types being currently less advanced than for cars. ### Other points Other announcements made by the government include: - the £35,000 threshold for Winter Fuel Payments will be maintained for this Parliament - the government is seeking views on the effectiveness of existing tax incentives, and the wider tax system, for business founders and scaling firms, and how the UK can better support these companies to start, scale and stay in the UK. ### Closing note We’ll continue to monitor the rollout of these measures and share relevant updates as more detail becomes available. **Categories:** Budget, Finance, limited company, News, Running your business, Tax, VAT **Tags:** Kerry Newman --- ### [ID Verification at Companies House – what you need to know](https://sg-accounting.co.uk/blog/id-verification-at-companies-house-what-you-need-to-know/) **Published:** August 20, 2025 **Author:** Kerry Newman **Content:** From November 18th, 2025, Companies House will be enforcing mandatory identity verification for all Limited Company directors, Persons with Significant Control (PSCs), and anyone who files on behalf of the company. This change, under the [Economic Crime and Corporate Transparency Act 2023](https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-act-outline-transition-plan-for-companies-house/economic-crime-and-corporate-transparency-act-outline-transition-plan-for-companies-house), will mark a major shift in the way in which UK companies operate and are registered. ## What’s coming and when **8 April 2025 –** The voluntary verification window opened – so directors, PSCs, and agents can verify their identity early. **18 November 2025 –** Mandatory ID checks will begin for all new incorporations and appointments from this date. If already incorporated you may be required to complete this process sooner, based on your filing deadlines. **November 2025 to mid-November 2026 –** A 12-month transition period for all existing directors and PSCs to complete their verification prior to their next confirmation statement, or through other Companies House filings. Some directors may need to complete this process sooner. **By mid-November 2026 –** almost all the 6-7 million individuals involved in a UK Limited Company will need to have verified their identity. ## Who will need to verify their identity? - New and existing company directors (including LLP equivalents). - PSCs, including those who are connected via legal entities. - Those individuals that file documents on behalf of any company (such as secretaries or agents). Ordinary shareholders who are **not** **PSCs** will not be required to verify their identity. ## How do you verify your identity? You’re able to verify your ID directly yourself, or through an Authorised Corporate Service Provider (ACSP): 1. **Online using the** [**UK One Login**](https://www.gov.uk/guidance/verify-your-identity-for-companies-house) **–** You’ll either need a biometric passport, UK driving license, UK biometric residence permit or card, or a Frontier Worker permit. You may also be able to verify your ID by using your bank / building society details and other personal information instead if you do not have valid photo ID. 2. **In person at a** [**Post Office**](https://www.postoffice.co.uk/identity/govuk-one-login) **–** If you’re unable to verify online you may be eligible to do so at a Post Office. 3. **Through an ACSP –** Many firms, such as SG Accounting, are registered to perform ID checks for their clients. An ACSP must be registered with Companies House and be under UK AML supervision, both of which we are. ## What happens next? Once your ID has been uploaded and verified, you’ll receive a code which must be linked to your company’s records. If you’re doing the process yourself, you’ll be able to do this via the Companies House website and then provide us with your verification code. ## What are the consequences of non-compliance? If a director or PSC fails to verify by the deadline, Companies House may: - Block filings (such as your confirmation statement and company accounts). - Impose penalties or even disqualify the individual from holding roles. - In some serious cases, Companies House may pursue criminal prosecution. ## Next steps – what you need to do - Check that your personal details are correct on Companies House (your DOB, address, etc) and that they match on your form of ID. You must make any updates before verifying. - Verify as early as you’re able to, to avoid any potential technical delays or fees. - If your company has multiple directors or PSCs, ensure each one completes their own verification. - Keep your personal code secure and ensure you share it with SG’s Compliance Team. ## How SG can help you We know how frustrating it can be to have to jump through additional hoops for Companies House, especially when you’re busy running your own company. Please do get in touch if you have any questions about the process or what’s required from you. Alternatively let us take the task off your ‘to-do’ list, and we’ll let you know once it’s completed. Protect yourself from uninterrupted services, penalties and delays – verify your identification early with help from SG. **Categories:** limited company, New to contracting, News, Running your business **Tags:** Kerry Newman --- ### [How Associated Companies Affect Corporation Tax](https://sg-accounting.co.uk/blog/how-associated-companies-affect-corporation-tax-from-your-trading-company/) **Published:** November 18, 2025 **Author:** Niamh Potter **Content:** If you're running multiple trading companies, it's essential that you understand the concept of 'associated companies'. HMRC uses the rules on associated companies to determine the small profits rate of Corporation Tax, so this means that the more companies you have, the lower the threshold will be before your tax rate increases. In this blog we break down exactly what associated companies are, how they can affect your Corporation Tax, and the strategies to manage your tax liabilities effectively. ## ## Key Takeaways - Associated Companies are companies which are linked through ownership, control or common shareholders. - The number of associated companies reduces the small profits threshold for Corporation Tax. - By understanding the rules, you may be able to help plan your corporate structure efficiently and effectively. - Any misunderstanding of the association rules may lead to unexpected tax liabilities. ## Contents ## ## What are Associated Companies? HMRC's definition of Associated Companies is that they're connected by ownership or control. - A company that is associated with another if 50% or more of its voting shares are owned by the same person(s) or their associates. - Control may also include the ability to appoint directors, influence decisions, or have common ownership through a parent company. - For Corporation Tax purposes the rules apply to trading companies, including small profits relief. In addition to ownership, companies may be treated as connected where there is substantial commercial interdependence, including: - Financial interdependence – such as inter-company loans, guarantees, or reliance on shared financing. - Economic interdependence – where companies share customers, operate in the same market, or rely on each other for supplies or services. - Organisational interdependence – where companies share premises, staff, management, systems, or branding. ### ## How Associated Companies Affect Corporation Tax In the UK Corporation Tax has a small profits rate that applies to companies who have profits that fall under a certain threshold. - For 2026/27, the small profits rate applies to profits up to £50,000, but this threshold will be reduced if you have associated companies. - The threshold is divided by 1 + the number of associated companies. - Companies that have profits above the threshold will pay the main rate of Corporation Tax (25%). - By understanding the association rules it'll help you plan profit allocation amongst your companies to ensure you're optimising your tax efficiency. ### ## Examples of Association in Practice Association can significantly impact your tax if you own multiple companies: - **Single owner, two companies:** The threshold of £50,000 ÷ 2 = £25,000 small profits limit per company. - **Three associated companies:** The threshold of £50,000 ÷ 3 = £16,667 small profits limit per company. - **Parent and subsidiary:** A parent company may be associated with all its subsidiaries, meaning that all their thresholds will be affected. ### ## Planning Ahead By understanding the rules surrounding associated companies and how they may affect you, this enables you to plan appropriately for future Corporation Tax liabilities and set aside the right level of tax. Please feel free to reach out to your Client Director if at all unsure if the rules affect you and to ensure you remain compliant, avoiding any potential penalties. ## FAQs ### [What counts as an Associated Company? ](#d5679a4e3f8ae691f) Companies are classed as 'associated' if they share common ownership, control, or voting rights of 50% or more. Parent -subsidiary relationships can also create association. Speak to your Client Director if you're unsure. ### [How does association affect the small profits rate? ](#b435864e08a1a1487) The small profits threshold is divided by the number of associated companies +1, therefore reducing the profits eligible for the lower Corporation Tax rate. ### [Do associated companies only affect trading companies? ](#2d4567e6e61492bdc) Yes, HMRC specially applies these rules to trading companies when calculating their Corporation tax thresholds. Got more questions about Associated Companies? [Get in touch with your Client Director](https://sg-accounting.co.uk/contact/). ## Final Thoughts Whilst the rules surrounding Associated Companies may seem complex, they are essential for managing Corporation Tax effectively and compliantly with HMRC. Your [Client Director](https://sg-accounting.co.uk/contact/) is always on hand to offer their expert advice and support, and to help you comply with HMRC's rules. Niamh Potter Client Director Niamh joined the team in December 2018, starting out with no prior accountancy experience and working her way up through the business over the years. She now supports clients in her role as Client Director at SG, alongside preparing year-end accounts. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/niamh-potter/) **Categories:** limited company, News, Tax, VAT **Tags:** Niamh Potter --- ### [The Tax Risks with Borrowing money from your Limited Company](https://sg-accounting.co.uk/blog/borrowing-money-from-your-limited-company-and-the-associated-tax-risks/) **Published:** May 24, 2022 **Author:** Kerry Newman **Content:** You may find from time to time that you need to borrow money from your Limited Company, but how do you go about it, what are the associated tax risks, and is there anything you need to be aware of? In this blog we take a look at all this, to ensure you know the facts before taking money from your company. ## **How does it work?** Regardless of the loan period or amount you’d like to borrow, first things first is you’ll need to know how much is in your business bank account so that you know how much you have in order to account for tax, any staffing costs, and other business depreciation elements. ## **Taking money legally out of your Limited Company** There are various ways of taking money from a ltd company including: 1. By paying yourself a director’s salary 2. By issuing dividend payments from available profits within the company 3. In the form of a director’s loan 4. By claiming expenses for business-related items ## **A director’s salary** Most Limited Company directors will pay themselves a salary through PAYE. Depending on the amount you pay yourself, you may need to pay National Insurance Contributions (NICs), and/or income tax. All salary payments are a tax deductible expense, therefore your company won’t have to pay any Corporation Tax liability on this money. Your company will however, still need to pay 15.05% Employer’s NICs on any salary earnings that fall above the NIC Secondary Threshold of £9,100 (for the 2022/23 tax year). Paying yourself a salary up to the NIC secondary threshold of £9,100 means no income tax or NI is payable. This value still allows you to qualify for the State Pension and any benefit entitlements, as your income exceeds the Lower Earnings limit of £6,396 pa. Another popular salary level taken by directors is the tax-free Personal Allowance of £12,570, whereby you won’t be liable to pay Income Tax, but you will need to pay employee NIC contributions on any earnings between £11,908 and £12,570. ## **Dividend payments** Any shareholder of their Limited Company is able to take profit from the company in the form of a dividend. You are only able to do so once there is profit in your company, otherwise the dividend will be classed as ‘illegal’. The total you’re able to pay yourself is dependent on the number of shares you hold, for example if you hold 100% of the shares then you’re able to take the remainder of profit out of your company once all costs have been accounted for (ie tax, expenses, etc). All Limited Companies pay 19% Corporation Tax on taxable income (this will increase to 25% for all profits in excess of £250,000 from 1 April 2023). The first £2,000 of annual dividend income is taxed at 0%, and free from NICs and Income Tax. Any amount exceeding the £2,000 limit will be subject to dividend tax that’s based on your Income Tax band (basic, higher or additional rate tax). Before paying out dividends you must declare the dividends to the board, and make a record of the meeting minutes. This provides a solid paper trail of what activity has taken place, the amounts issued to whom and when. You must also keep a record of a dividend voucher, which will also display the dividend details. ## **Director’s Loan** By taking money from your Limited Company in the form of a Director’s Loan, you’re able to: 1. Lend money back to your company 2. Borrow more money from your company than the amount you originally paid in 3. Reclaim any money you originally put into the company A record of Director’s Loans must be kept and maintained in a Director’s Loan Account, which must be shown as part of your company’s balance sheet. It’s worth noting that should you decide to take out more money than what has been paid into your business, your Director’s Loan Account will become overdrawn, and there are tax implications from doing so. If your company owes you money, then your loan account will be in credit and you’ll be able to take out money without facing any tax liabilities. ### **For example – if the amount you owe your company is less than £10,000:** - There are no personal tax liabilities, but there might be tax consequences for your company If your loan is overdrawn for more than 9 months following your company year end (your companies filing deadline). If this is the case, the company must pay Section 455 Tax on the full amount overdrawn - Section 455 Tax carries a 33.75% tax charge (32.5% for loans prior to 06/04/2022) which your company is liable to pay alongside its Corporation Tax liability - Any outstanding loan amounts must be displayed on your company’s tax return ### **If the amount you owe your company exceeds £10,000 at any point:** - There might be tax consequences for your company if your loan is overdrawn for more than 9 months from your company year end. If this is the case, the company must pay Section 455 Tax on the full amount overdrawn - Section 455 Tax carries a 33.75% tax charge (32.5% for loans prior to 06/04/2022) which your company is liable to pay alongside its Corporation Tax liability - Any outstanding loan amounts must be displayed on your company’s tax return - When a director’s loan exceeds £10,000, if you repay the loan to the company with interest applied (at HMRC’s official rate of interest) the loan will not be classed as a taxable benefit. - If the loan is not repaid to the company with interest, you will need to declare the loan via your company P11D and your Self-Assessment Tax Return. This is because it is deemed as a benefit in kind for the Director to receive an interest free loan from the company. - The value of the benefit will be calculated at the official rate of interest. Class 1A national insurance at 15.05% will then be payable from your company via form P11D and the benefit will also be included within your personal tax return, taxed at your appropriate rate of tax. ### **What you need to record when it comes to Director’s Loans:** - The value of money a director gives the company, excluding any share payments they may take - The total value a director may borrow from the company - Any interest that may be payable on that loan These records are traditionally kept within the Director’s Loan Account. Depending on how much is borrowed, it may be subject to certain types of tax, therefore it’s advisable to discuss your plans with your SG accountant before borrowing any money out of your Limited Company. ### **If your Director’s Loan Account has zero balance or is in credit** If the amount you take out is less than the total balance you’ve put in, you’re not borrowing any money, and are therefore claiming funds which you’ve already paid in. The Director’s Loan Account will either show a balance of nil or remain in credit, depending on the total amount you draw out. You’re able to take out the available money at any given time without any tax implications, so long as your account is in credit. ### **What happens when your Director’s Loan Account is overdrawn?** If you take out more than what’s already in there (discounting a salary payment, dividend or expense) the withdrawal is a benefit and will therefore be classed as a Director’s Loan. This will in effect make your Director’s Loan Account overdrawn. ## **Your Limited Company’s financial year** Should your account remain overdrawn 9 months after the end of the accounting period, then HMRC will charge you S455 Tax at a rate of 33.75% (32.5% for loans prior to 06/04/2022). You can, however, claim the paid tax back once you’ve paid the full amount of overdrawn money to your Limited Company. ## **Expenses** You’re able to reclaim the cost of expenses, so long as they were purchased solely for the purpose of the business. In order to do so, you must keep a record of all receipts. You’re able to claim tax-deductible expenses in the following form: - Parking and mileage costs - Travel and accommodation - Mobile phone contract costs - Entertainment - Food and drink - Computer and office equipment - Training costs - Postage costs If incurred personally on behalf of the business, you’ll be reimbursed these amounts by your company when you’re paid either weekly or monthly, or at any other time during the month that’s convenient to you. Your company must keep receipts of all expenses for a period of 6 years along with a record of what the expense was and what it was needed for. ## **How your SG Accountant can help** Tax is confusing, especially when it comes down to working out your % margins, what taxes are due and when, and how much extra you could end up paying if you get your numbers wrong. That’s where your expert SG Accountant comes in handy, to help you navigate the complex world of running your Limited Company. If you’re considering borrowing money from your company get in touch with your accountant today. **Categories:** Expenses, Finance, Running your business, Salary/dividends **Tags:** Kerry Newman --- ### [What is S455 tax?](https://sg-accounting.co.uk/blog/s455-tax-what-business-owners-need-to-know/) **Published:** November 11, 2024 **Author:** Kerry Newman **Content:** If you have your own Limited Company there may be times where you lend money to your company, which traditionally comes without tax implications. But what about when you need to personally borrow money from your Limited Company, and the process is flipped around? In this blog we explore what S455 tax is, how much it may cost and when the costs might be incurred. ## S455 tax and directors loans – what are they? If you have any director’s loans that still have amounts left to be paid past their permitted payment period, then you’ll be subject to S455 tax. A type of Corporation Tax, S455 tax was originally created to tax those who’ve failed to pay back director’s loans after a particular period. If you have director’s loans you have a total of nine months after the company’s financial yearend in which you took the money out, to repay the total amount. For example: - Your company’s financial year runs from 1st October 2024 to 30th September 2025 - You take out a director’s loan on 5th October 2024 - The loan must be repaid by 30th June 2026 (9 months after the year-end) If not paid in full, you’ll be subject to paying the 33.75% S455 tax on the outstanding loan’s balance. ## How much can you expect to pay when subject to S455 tax? The current rate for S455 tax is 33.75% of the loan’s outstanding value, this is because HMRC tax it at the same rate as dividends falling within the higher rate tax band. For example, the additional amount you can expect to pay for a £40,000 unpaid loan would be £13,500 in S455 tax. ## How and when do you pay your S455 tax? S455 tax is a form of Corporation Tax, and is therefore treated as such, so any S455 tax payments are paid alongside your Corporation Tax bill. Whilst is can be an inconvenience having to pay an additional tax bill, it’s worth understanding that S455 tax is temporary, and you’re able to claim it all back once you’ve repaid the original loan in full. You can repay the total amount back to your company in cash. Whilst this would solve the main problem, you’ll find that as a shareholder of your Limited Company it might be easier and potentially more tax efficient to vote a dividend to reduce your director’s loan balance, so long as there’s enough profit in the company to be able to do so. So instead of taking out your dividends from the company, you use them to either repay your loan in full, or part of what you owe. Your SG accountant will be able to advise you further on this, and the tax implications associated with doing so. ### How do you get your S455 tax back once you’ve repaid the outstanding director’s loan amount? Reclaiming the amount of S455 tax paid will depend on when you repaid the original director’s loan in full: If you’re reclaiming S455 tax for loans repaid **within** 9 months of relevant yearend **–** you’ll need to fill out a [CT600A form](https://www.gov.uk/guidance/supplementary-pages-ct600a-2015-version-3-close-company-loans-and-arrangements-to-confer-benefits-on-participators) when completing your Corporation Tax form. If you’re reclaiming S455 tax for loans repaid **after** 9 months of the relevant yearend **–** you’ll need to [complete a L2P form](https://www.gov.uk/guidance/reclaim-tax-paid-by-close-companies-on-loans-to-participators-l2p). The earliest this form can be submitted to HMRC is 9 months and 1 day after the yearend in which the repayment of the loan has been received. ### What happens when you have more than one director’s loan? If you have more than one withdrawal from your director’s loan account, ensure everything has a paper trail to track all your movements, and that you’re [up to date with the latest rules](https://www.gov.uk/directors-loans) surrounding how many withdrawals you’re able to make at any one time. Correct records are essential to ensuring you don’t find yourself with cashflow issues or poor financial health in the future. It’s worth noting that: - If you repay a loan in full then take a second loan out less than 30 days later, HMRC will class the first loan as unpaid, as they will view it as a continuation of the first loan. In HMRC’s eyes taking out a loan so close to paying one off could be seen as to be trying to get around the rules surrounding the S455 tax period, and therefore S455 tax would still apply. This process is also known as ‘bed and breakfasting’. - The S455 will apply to all loans not repaid within 9 months of relevant yearend. If you have multiple loans this will apply to any not repaid within this time frame. Be sure to speak to your SG accountant if you’re considering taking out multiple director’s loans to ensure everything is tracked correctly. ## What happens when your company closes? If you decide to close your company before the loan is repaid in full, then you’ll be subject to paying S455 tax. Then loan may also need to be recategorised as income or distribution, as the funds have been distributed to yourself. You’ll then be subject to paying the relevant levels of income tax and National Insurance. Outstanding director’s loans can also still be recovered if a company becomes insolvent, and another company is appointed to try and recover any money owed. ## **How SG Accounting can help** As an SG client your dedicated accountant is on hand to guide you and assist with any questions you may have about a director’s loan you’re considering, or one you may already have. It’s their job to help you navigate your tax obligations, and how to best ensure you stay on the right side of HMRC. Got more questions? [Simply get in touch and we’ll take it from there](https://sg-accounting.co.uk/contact/). **Categories:** Running your business, Tax **Tags:** Kerry Newman --- ### [Can you claim free childcare whilst working through your Limited Company?](https://sg-accounting.co.uk/blog/can-you-claim-free-childcare-whilst-working-through-your-limited-company/) **Published:** September 11, 2024 **Author:** Kerry Newman **Content:** Ask any parent what the most expensive part of having children is, and the majority will most likely tell you it’s childcare costs. Second to your monthly mortgage or rental costs, you may find that what you pay in childcare will be a close second. But fret not! There is help out there. In this blog we explore the world of free childcare, how to check your eligibility, and what the restrictions are when it comes to your earnings. ## **How much childcare are you entitled to?** If your child is aged 9 months to 4 years old you may be eligible for free childcare whilst living in England. The total amount of free childcare you’re entitled to will be based on: - Your circumstances and your child’s age - Whether you’re working (self-employed, employed or a director) - Your income (and your partner’s income if you have one) - Your immigration status if not a UK resident - You may also be entitled to free education and childcare for 2 year olds under a separate scheme Please note that there are different childcare schemes in Scotland, Wales and Northern Ireland. In this blog we will only focus on those available in England. ### **Your circumstances and child’s age** The total number of free childcare hours you’re entitled to will be determined firstly by your child’s age. Children aged 9 months to 2 years could be entitled to 15 free hours per week, and children aged 3 to 4 years old may be entitled to 30 free hours per week. If your child doesn’t normally live with you, you may not be eligible. ### **If you’re working** Most working people are eligible for free childcare if you (and / or your partner if you have one) are: - Working or will be starting employment shortly - Are on sick or annual leave - Currently on shared parental, maternity, paternity or adoption leave ### **If you’re starting a new job or are on shared parental, maternity, paternity or adoptive leave** The date from which you’re entitled to free childcare will be determined from when you return to work: ### **Starting / returning to work date – when you can get hours from** 1st May to 30th September Term starting on or after 1st September 1st October to 31st January Term starting on or after 1st January 1st February to 30th April Term starting on or after 1st April ### **If you’re not currently working** You may still be eligible for free childcare if your partner is working, and you’re on carer’s leave, or you receive any of the following: - Incapacity Benefit - Severe Disablement Allowance - Carer’s Allowance - Limited Capability for Work Benefit - contribution-based Employment and Support Allowance ### **If you’re a foster carer** You’re able to claim free childcare if you foster your child, so long as: - you’re working in paid work that’s outside of your fostering role - your ‘adjusted net income’ is below £100,000 for the current tax year You’re unable to use the online application to apply for free childcare when fostering. You’ll need to liaise with your social worker and your local authority when you’re ready to apply. ### **Your income** The amount you (and your partner if you have one) earn over the next three months must be expected to be at least: - £2,380 pretax if you’re aged 21 or over (£183 p/w) - £1,788 pretax aged 18 to 20 (£137 p/w) - £1,331 pretax aged under 18 or currently completing an apprenticeship (£102 p/w) This is the National Minimum Wage or Living Wage for an average 16 hour working week. You’re able to use an average of how much you’d expect to earn over the course of the current tax year if: - You’re not paid regularly but do work throughout the year - If you’re self employed and do not expect to earn enough in the next 3 months #### **For example** - You’re 21 or over - Do not have a regular income but earn at least £9,518 a year - Which equates to the same as earning £2,379 every 3 months ### **If you’re self employed and your business is less than 12 months old** You’re able to earn less yet still be eligible for free childcare for those parents that work. ### **If you have more than one form of employment** You’re able to use your total earnings to see if you’re income meets the threshold. This can include: - Your earnings from any employment - Your earnings from any self-employment You can use just your self-employed income if you think it’ll meet the criteria, if your expected average self-employed earnings over the tax year are more than you’ll receive over the next 3 months as an employee. ### **Income which will not count towards your minimum earnings** There are certain types of income which are not eligible when it comes to meeting the minimum amount you must earn to be eligible: - Dividends - Interest - Investment property income - Pension payments You’ll also not be eligible if you or your partner have an expected adjusted net income of over £100,000 in the current tax year. This will most likely be the biggest barrier to free childcare when running your own Limited Company, so it’s strongly advisable to speak to your SG accountant to understand the parameters of your income and the effects this could have on your eligibility. ### **Your immigration status** You (and your partner if you have one) must have a National Insurance number to be eligible for free childcare. The person applying for free childcare must also have one of the following: - British or Irish citizenship - Settled or pre-settled status, or evidence of you applying and you’re currently waiting on a decision - Permission for access to public funds – your UK residence card will confirm this ## **How SG Accounting can help** Here at SG your dedicated accountant is here to support both your personal and professional plans and successes. From helping you understand what you’re entitled to, to ensuring you’re maximising your take home pay, we’re here to help. [Get in touch with us to discuss your current circumstances or future plans](https://sg-accounting.co.uk/contact/) and whether you’re entitled to free childcare. **Categories:** limited company, Running your business, Tax **Tags:** Kerry Newman --- ### [What are the 2026/27 tax year rates and allowances?](https://sg-accounting.co.uk/blog/what-are-the-2026-27-tax-year-rates-and-allowances/) **Published:** February 25, 2026 **Author:** Kerry Newman **Content:** ## ## Income Tax - Tax-free personal allowance – £12,570 - Basic rate – 20% – up to £37,700 - Higher rate – 40% – from £37,701 to £125,140 - Additional rate – 45% – above £125,140 ## ## National Insurance Rates - Lower Earnings Limit (LEL) – increasing from £6,500 to £6,708 from 2026/27 to ensure there’s enough for the state pension credit in the year - Primary threshold – £12,570 - Secondary threshold – £5,000 - Employees and directors must pay NI Class 1 contributions at 8% and 2% - Employers pay NI Class 1 contributions at 15% ## ## Dividend Tax Rates - Basic rate – 10.75% - Higher rate – 35.75% - Additional rate – 39.35% ## ## Dividends for Directors example - Dividends basic rate – £37,700 and a salary of £12,570 - Tax-free allowance – £500 - Pay £3,999 Income Tax to HMRC by 31 Jan 2028 ## ## Corporation Tax - Profits up to £50,000 – 19% - Profits above £50,000 – £250,000 subject to marginal relief effectively taxed at 26.5% - Profits above £250,000 – 25% ## ## Tax-efficient Director’s salary 2026/27 - It’s up to you to decide, because you control the company, but many will choose a salary of £12,570 for 2026/27 to match the personal allowance, or a salary of £6,708 to qualify for state pension credit - The Employment Allowance is not available to single-director companies where the director is the only employee paid above the Secondary Threshold - Employment allowance of £10,500 towards NIC if you have more than one employee and are eligible ## ## Student Loan Repayments - Plan 1 repayment threshold – £26,900 - Plan 2 repayment threshold – £29,385 - Plan 4 repayment threshold (Scottish students) – £33,795 - Plan 5 repayment threshold (started after Aug 2023) – £25,000 - Repayment rate – 9% ### ## Post Graduate - Plan 3 repayment threshold – £21,000 - Repayment rate – 6% ## ## Other points of interest - National Minimum Wage – increasing from £12.21 to £12.71 for those aged 21 and over - Capital Gains Tax annual exemption – remains at £3,000 - The high income threshold for Child Benefit remains at £60,000. It’s tapered now for repayments between £60,000 and £80,000, when the full amount is repayable - From April 2026 the eldest / only child will receive £27.05 per week, and additional children will receive £17.90 per week - Changing rate for BADR – increasing to 18% from April 2026 **Categories:** limited company, News, Running your business, Tax **Tags:** Kerry Newman --- ### [Can I use company money to pay my personal mortgage? ](https://sg-accounting.co.uk/blog/can-i-use-company-money-to-pay-my-personal-mortgage/) **Published:** October 15, 2019 **Author:** Kerry Newman **Content:** We get asked lots of questions by our contractors, and this is one that comes up time and time again. Contractors who work outside of IR35, often ask us this because they may have sums of money held in their business bank account to cover future tax liabilities. While it’s sitting there, it is earning very little interest. Instead of leaving it in there, they may wish to put it to better use by paying off some of their mortgage. Every time we get asked, ‘Can I use company to pay my mortgage?’, we explain that, **No**, you can’t use money held within your limited company to pay your personal mortgage. ## **Why can’t I use my company money to pay my mortgage?** One of the reasons is that banks won’t allow you to link your business bank account to offset your mortgage. Contractors sometimes forget that their limited company is a separate entity to them. Therefore, any money that is held within its bank account belongs to the business and not you. This is until you transfer the funds out of the business into your personal bank account. Once this transfer is completed, the money is yours and you can use it to pay their personal mortgage. But don’t forget that the money transferred from the business bank account to your personal bank account needs to be recorded as salary, dividends or a directors loan and there may be tax implications of this which could far outweigh the benefit obtained by paying off a mortgage. ## **What are my options?** ### Directors Loan You can take money out of your limited company’s account in the form of a Directors Loan. HMRC defines a Directors Loan as any money which is taken from the company which isn’t: 1. Salary, dividend or expense payment 2. Money previously paid into or loaned to the company You can take a loan of up to £10,000 without it being deemed as a benefit-in-kind. If you take more than this, you’ll have to pay interest to your limited company at rates defined by HMRC. Currently this is 2.5%. If you fail to repay the entire loan within nine months and one day of your company’s year-end, you will have to pay additional Corporation Tax at 32.5% on the outstanding value. The good news is though, this additional 32.5% is repayable by HMRC once the loan has been paid off. You must document all loans taken from your limited company so you can show it to HMRC if you’re asked to. ![Glasses on a legal document.](https://sg-accounting.co.uk/wp-content/uploads/2019/10/glassesonapieceofpaper.jpg "glassesonapieceofpaper | SG Accounting") ### Dividends Most contracting businesses have substantial sums of money sitting in their business’ account which will be used to pay future tax liabilities. The idea is, you would take a dividend using this money and use any future earnings to pay your tax bill. You would have to be very careful using this route as although you may have cash in a business it does not always mean there is sufficient profits to pay a dividend. If there is not sufficient profit to pay a dividend it is deemed an illegal dividend (or ultra vires) distribution. If HMRC concludes that you made an illegal dividend distribution HMRC may claim it was in fact salary and you’ll have to pay National Insurance and Income Tax on it. ***Before withdrawing any money from your limited company, you should get professional advice from an experienced contractor accountant.*** ***If you’re new to contracting or have been doing it for a while and are interested to find out the most efficient ways to withdraw money from your limited company, speak to one of experienced Directors on 01962 867550. Alternatively, send us a message using our*** [***online enquiry form***](https://sg-accounting.co.uk/contact/) ***and we’ll be in touch shortly.*** **Categories:** Finance --- ### [Things to consider when making children shareholders](https://sg-accounting.co.uk/blog/things-to-consider-when-making-children-shareholders/) **Published:** May 23, 2019 **Author:** Kerry Newman **Content:** If you run a limited company and have children, you can give them a stake in the business and provide them with the opportunity to benefit from any profit the business makes by making them shareholders. If your children are of an age where they can attend university, giving them shares can provide them with a stream of income which can help towards the cost of rent, books or living expenses. It can also be beneficial for tax purposes to make your children shareholders, but before you go distributing shares, here are some things to consider first. ## **Parental settlements** There is no legal ruling which states that you can’t make your children shareholders in your limited company. However, if your children are under 18, any gross income above £100 they receive is taxable and as they are legally classed as minors their tax liability passes onto you as their parents. So, if you are looking to reduce your tax liability, giving children under 18 shares is not advisable. ## **Children over 18** ![Child over 18 for shares.](https://sg-accounting.co.uk/wp-content/uploads/2019/05/Adult-Child.jpg "Adult-Child | SG Accounting") If you have adult offspring (aged over 18 years) the parental settlement doesn’t apply, so any gross income they receive over £100 is taxable. However, if the shares are their only source of income, for the tax year 2019/20 they could get up to £14,500 tax-free. This figure is made up of the £12,500 personal allowance plus the £2,000 dividend tax allowance. If your children are aged over 18, it is possible to make tax savings, but this should only be done under the supervision of an experienced contractor accountant. ## **Capital gains** Another major consideration when giving children shares is capital gains. Any shares which are passed onto children are classed as a disposal for Capital Gains Tax purposes which means you could find yourself receiving a Capital Gains Tax bill. You will be required to calculate the value of the capital gain by looking at the original value of the shares and the value at the time of passing them onto your children. You will have to pay tax on the value of shares which come above your annual capital gains allowance (£12,00 for 2019/20 tax year). You’ll also have to pay tax if you’ve already used up your allowance for this current tax year. ![Calculator and pen on graph paper, for calculating taxes.](https://sg-accounting.co.uk/wp-content/uploads/2019/05/Accounting.jpg "Accounting | SG Accounting") ## **Other considerations** Families are complicated and it’s important that you approach passing shares onto children with caution. If you have younger children, they may resent the fact that their older sibling(s) is receiving shares and they aren’t. Plus, giving away too many shares to children could tip the balance of control in the business and your children may choose to outvote you. This may seem ridiculous and while it’s unlikely to happen, it should always be a consideration. ***Prior to giving children shares in your limited company, it’s important that you first seek professional advice. With over twenty year’s experience working with limited companies, our Directors are aware of the in’s and outs of adding shareholders. Give one of them a call on 01962 8675550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Guides, New to contracting --- ### [Productivity apps for contractors](https://sg-accounting.co.uk/blog/productivity-apps-for-contractors/) **Published:** May 22, 2018 **Author:** Kerry Newman **Content:** It seems like the term ‘productivity’ is the buzzword of the moment. Everyone wants to be more productive with their time. This led us to ask, what is productivity and why is it so important? The technical definition of productivity is “the rate of output per unit of input by a worker.” In layman’s terms, it is how much stuff gets done. ### Why do clients want productive contractors? Clients pay a premium for the expertise that a contractor brings to a project. If the contractor isn’t focussed on the project, it could end up costing the client more, or the project won’t be completed on time. So how can you improve your productivity without putting in extra hours at the office? Our list of top productivity apps will help you to achieve this. ## **Keep track of your time with Toggl** ![Toggl in action](https://sg-accounting.co.uk/wp-content/uploads/2018/05/Timer.png "Toggl | SG Accounting") *Source: [Toggl](https://support.toggl.com/)* We all live busy lives and it can be difficult to keep track of our time. It becomes even more important to monitor time when you are an independent contractor. Toggl is a work time management app that synchronises across all your devices. For instance, you can start it on your desktop and pause it on your phone. Tracking your work time with Toggl enables you to breakdown your time by clients and projects so you can see how a project is progressing and what tasks are holding you back. Toggl – <https://toggl.com/> ## **Keep the team on track with Slack** ![Slack logo](https://sg-accounting.co.uk/wp-content/uploads/2018/05/slack.png "slack | SG Accounting") If the project you are working on is made up of a team of remote workers or contractors that are geographically spread, keeping a track of the project can be difficult. Slack offers a single place where messages, tools and files can be shared securely. Slack enables you to create channels on a project or client basis. This means that you aren’t inundated with information that isn’t relevant to you. Plus, the system is fully compliant with the Data Protection rules as all data is encrypted in transit and storage. Slack – [https://slack.com/](https://slack.com/intl/en-gb/) ## **Keep passwords safe with 1Password** ![Screenshot of 1Password in action](https://sg-accounting.co.uk/wp-content/uploads/2018/05/opm-screenshot.jpg "opm-screenshot | SG Accounting") *Source: [TechCrunch](https://techcrunch.com/2016/08/04/1password-is-slowly-switching-to-a-subscription-model/)* Staying safe online can be a struggle as hackers are constantly coming up with new ways to steal our personal and sensitive data. We are advised to create individual passwords for each application we use. This means we can have numerous passwords to remember. 1Password creates a secure environment that stores all your passwords and important information, meaning you only need to remember one master password. With the Team package, you can have the option to store unlimited passwords, notes and documents with your colleagues in a secure environment. 1Password – <https://1password.com/> ## **Accessible accounts with FreeAgent** ![Screenshot of FreeAgent running on a laptop and an iPhone](https://sg-accounting.co.uk/wp-content/uploads/2018/05/freeagent.png "freeagent | SG Accounting") *Source: [FreeAgent](https://www.freeagent.com/features/accounting-software/)* Contractors are busy people, not only are you carrying out work for a client you also have the added task of running your own limited company. After a long day of working for your client, you may lack the motivation for working on your business. FreeAgent enables you to run your business from anywhere. On the commute home, you can upload an expense, send off an invoice, check your cashflow and estimate your tax liabilities. Plus, you don’t have to do it alone, you can invite your accountant to join so you can share information instantaneously. FreeAgent – <https://www.freeagent.com/> ***As a FreeAgent Expert partner, we have a solid understanding of the software’s features and tools. This enables us to understand your business’ financial position in real-time. Contact us on 01962 867550 to find out about our accountancy packages and how FreeAgent can work for you.*** **Categories:** Running your business **Tags:** Switching - Service --- ### [Protect yourself from HMRC scammers](https://sg-accounting.co.uk/blog/protect-yourself-hmrc-scammers/) **Published:** July 17, 2018 **Author:** Kerry Newman **Content:** Cybercriminals are using increasingly sophisticated methods to scam people into handing over their personal and bank details. According to the [Citizens Advice Bureau](https://www.citizensadvice.org.uk/) around four million people are scammed each year in the UK. The scary thing is, this number is on the rise. From text messages to phishing emails here is what you need to know to protect yourself from scammers. ## Most common HMRC scams ![Man answering his mobile phone with uncertainty](https://sg-accounting.co.uk/wp-content/uploads/2018/07/answering-phone.jpg "answering-phone | SG Accounting") Over the last few years, we have seen an increase in the number of HMRC scams doing the rounds. They tend to come in the form of a phishing email, letter, text message and more recently, phone calls. Hundreds of people have reported that they have received an automated phone call supposedly from HMRC stating that they are under investigation for non-payment of tax. In the call, they are directed to press number 1 on the keypad to direct themselves to an advisor who can take instant payment via a credit card. Another recent example is an email that states the person is eligible for a tax refund. They are asked to click on a link within the email to enter their bank details to claim the refund. In response to the increase in the number of scams, HMRC has created a dedicated page on their website that details the scams that they are aware of. You can access this page [on their website here](https://www.gov.uk/government/publications/phishing-and-bogus-emails-hm-revenue-and-customs-examples/phishing-emails-and-bogus-contact-hm-revenue-and-customs-examples). ## How to spot an HMRC scam ![Hacker in a black room with a bright computer screen sending scams](https://sg-accounting.co.uk/wp-content/uploads/2018/07/hacking-phishing.jpg "hacking-phishing | SG Accounting") We’ve got to say, at times it can be really difficult to tell the difference between legitimate correspondence and fake correspondence. Cybercriminals put a lot of effort and resources into making their communication look authentic. To them, it’s a business and they make their money by stealing yours. However, there are some things that typically give it away. These include: - Your name is spelled incorrectly - There are lots of spelling mistakes throughout the message - The email address looks incorrect - The correspondence is asking you to make payment immediately ## What to do if you are sent a scam ![Spotting a fraud or scam with a sign on a computer reading'fraud alert'](https://sg-accounting.co.uk/wp-content/uploads/2018/07/fraud-prevention.jpg "fraud-prevention | SG Accounting") If you think you have received fake correspondence from HMRC, the first thing you should do is contact them directly to verify that it has come from them. If they confirm it hasn’t you need to destroy it or permanently delete it. If you receive a call that you suspect is a scam do not hand over any personal or bank details. Hang up and inform HMRC immediately. You can pass on details of the scam to HMRC by emailing them on <phishing@hmrc.gsi.gov.uk>. If you receive an email, do not click on any links contained in the email as this could install spyware on your computer that can steal your personal details and passwords. To ensure your computer, laptop or mobile device are protected from attacks from viruses and spyware you need to install anti-virus software. There are numerous options available on the market ranging in costs. If you’re a contractor operating via your own limited company don’t forget that the cost of this software is classed as a [legitimate business expense](https://sg-accounting.co.uk/blog/ask-an-expert-expenses/). So, by purchasing it through your limited company you’re not only protecting your business but also reducing your corporation tax bill. ***As a team of proactive contractor accountants, our clients know their accounts and tax affairs are safe in our hands. Give us a call today on 01962 867550 to see how we can help you.*** **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [Are you contracting in the public sector?](https://sg-accounting.co.uk/blog/contracting-public-sector/) **Published:** February 2, 2017 **Author:** Kerry Newman **Content:** As you may have read in our Autumn Statement commentary, changes in April 2017 will mean that contractors working in the public sector will no longer have a say in their IR35 status. Instead the responsibility to determine IR35 status will rest with the public sector body. If the contractor is engaged via an agency then the payment of tax will be made by the staffing agency or intermediary with the contractor (or the contractor’s limited company) receiving payment after deducting employment taxes where IR35 applies (potentially costing the contractor another 20% in tax). Frustratingly we are only a couple of months away from when this all starts and there is no legislation yet! We have put together this guide based on what we know so far however. **How will the public sector assess the IR35 status?** Of most concern here is “who is actually making the decision”. Will it be the contractor’s contact at the public sector organisation, who arguably knows more about their working relationship than anyone else, or will there be a policy approach such as “everyone in that department is caught” or “everyone who has been here for more than x years is caught”. It remains to be seen, however, we do know that TFL have started to send out communications, offering a number of options, with retaining the ltd company services being a last resort. Other public sector contractors we have spoken to have said that their work is so critical that the public sector organisation would not risk losing them by changing their status. Most of the public sector has had a system in place for procurement of contractors and determining status for a number of years. A questionnaire was completed by the contractor and then sent off to the HR department to analyse and decide how that contractor would be paid. This system is going to move online with a new online test to be completed by the public sector engager or agency. It is not yet available (Beta due February 2017) but it will be interesting to see what questions are being asked here. Surprisingly it will be optional so as to reduce admin on the user. As they will be the ones with the liability in future it is hard to see them not using it. It is also difficult to see how good this online tool will be – IR35 is a notoriously complex area and in my opinion not one that can be determined by an online tool…unless biased in favour of classifying contractors as caught by IR35. From talking to some of our clients it seems KPMG are doing the rounds to advise contractors and public sector bodies on determining IR35 status and the impact of this. HMRC have been approached for assistance and ironically have drafted in contractors to help with the project! **What is a public sector body?** For the purposes of this legislation a public sector authority is that which is a public sector authority for the purposes of: - the Freedom of Information Act 2000 - the Freedom of Information (Scotland) Act 2002 This is split up into different categories: - Government departments, legislative bodies, and the armed forces - Local government - National Health Service - Maintained schools and further and higher education institutions - Police - Other public bodies **What happens now?** Our advice is to speak to us if you believe the changes will affect you and let us know what your agency is proposing. We have a number of options available to you: - Challenge the decision made by the public sector engager on IR35 status. We are also working with our IR35 expert directors at Abbey Tax to advise on this area. Until we have the legislation we don’t know if there is going to be an appeals process and if there is then how it would work. - It is important to note that if the agency or end client are declaring you inside IR35 then that will apply to all payments received after 6 April 2017. Therefore, we would recommend trying to get all payments for March 2017 paid prior to 6 April 2017 to avoid PAYE being deducted at source. - If PAYE is deducted by the agency or public sector body then this is just an indication that that public sector body believes you to be caught by IR35 (or just wants to avoid the risk of having to pay the liability themselves) it does not always mean that you are caught by IR35. If the contract is not caught by IR35 but tax has been deducted at source then this tax could be reclaimed at the end of the year by submitting corporation tax and personal tax returns to this end. The overpaid tax would then be refunded back by HMRC. - Continue to operate under your ltd company with this contract caught by IR35 (although that doesn’t mean that future contracts either public or private sector would be). Many will want to negotiate a higher day rate as a result. - Operate under an umbrella. An umbrella company will take on the contract from the agency and your employment. So the end client pays the agency, the agency pays the umbrella and then the umbrella pays the worker as an employee after deducting fees and tax and NI under PAYE where applicable. If your agency is asking you to engage via an umbrella then we can help here by transferring this contract to our sister company [SG Umbrella](https://sg-umbrella.co.uk/). If you are contracting in the public sector and believe you will be affected by these changes please do get in contact with us to run through your options. **Categories:** IR35, News **Tags:** IR35 - Guide, Switching - Service --- ### [SG Accounting shortlisted for Best Contractor Accountant in the Contracting Awards 2019](https://sg-accounting.co.uk/blog/sg-accounting-shortlisted-for-best-contractor-accountant-in-the-contracting-awards-2019/) **Published:** August 1, 2019 **Author:** Kerry Newman **Content:** SG Accounting are delighted to be shortlisted for the inaugural Contracting Awards 2019 in the Best Contractor Accountant category. A high number of nominations were received and, after being judged by the Contracting Awards panel, SG Accounting has made the final 5. ## When will the winner of the Contracting Awards be announced? The winner will be revealed on the 6th November 2019 at the awards evening at Grand Ballroom at The Montcalm where we can celebrate the best service providers to contractors the UK has to offer. The full shortlist for this category is as follows: - Clever Accounts - Gorilla Accounting - PayStream - SG Accounting - SJD Accountancy Daniel Mepham, Managing Director of SG Group, said “We are thrilled to have reached the final 5 in the Best Contactor Accountant (over 2,500 clients) category. It is a real testament to the investment and hard work we have all put in since we started SG in 1995. Our clients still continue to recommend other contractors to us knowing they will get a no nonsense, professional and very importantly a personal service. We travel all around the country to meet all of our clients face to face helping to ensure it’s a great tailored accounting service.” **Categories:** Guides, News --- ### [The 10 best paying jobs for contractors](https://sg-accounting.co.uk/blog/10-best-paying-jobs-contractors/) **Published:** September 4, 2018 **Author:** Kerry Newman **Content:** We’ve always believed that working as a contractor is one of the best ways to work. As well as the freedom of choosing when you work, you also have control over who you work for. A report by Bullhorn backs up our belief. Released at the beginning of 2018, and titled ‘[UK Recruitment Trends](https://www.bullhorn.com/uk/grid/)’, the report reveals that recruiters who are involved in the hiring of contract and temp staff are expecting 2018 to be a fantastic year. Figures show that they are expecting to see a staggering 45% increase in the demand for contract and temp staff. ![£1 coins in a depth-of-field effect](https://sg-accounting.co.uk/wp-content/uploads/2018/09/coins.jpg "coins | SG Accounting") Fantastic news if you are already a contractor, or if you are considering becoming a contractor. It is fair to say though, that some sectors are performing better than others. So where is the money in contracting? According to [Emolument](https://www.emolument.com/), a talent intelligence platform, that enables users to benchmark their salaries, the following roles as the best-paid jobs in contracting: 1. ## Finance – Risk Modelling Average daily rate: £760 2. ## Change Management – Risk Change Average daily rate: £730 3. ## Management – Project Management Average daily rate: £640 4. ## Finance – Model Validation Average daily rate: £610 5. ## Change Management – Finance Change Average daily rate: £570 6. ## IT – IT Senior Management Average daily rate: £570 7. ## Consulting – Strategy Consulting Average daily rate: £570 8. ## Finance – Credit Risk Management Average daily rate: £520 9. ## Date – Business Analysis Average daily rate: £505 10. ## IT- Enterprise Architecture Average daily rate: £505 **N.B: These figures don’t consider regional differences.** ## What does this list tell us? The first thing that is apparent, is that highly skilled contractors who operate in a niche sector, are the highest paid. Such as Risk Modelling, where a contractor can charge on average £750 per day. Secondly, the IT sector continues to be a thriving sector for contractors. The more senior you are, the higher the rate you can command. For example, an IT Senior Manager can currently ask for £570 per day. ![Contractor working from home on their laptop](https://sg-accounting.co.uk/wp-content/uploads/2018/09/working-laptop-home.jpg "working-laptop-home | SG Accounting") Finally, Change Management is showing itself as a lucrative sector to work in. Two out of the top ten jobs are within Change Management (Risk Change and Finance Change). We don’t find this surprising. When a company undertakes a programme of change, it can dramatically impact on the business, so it’s only natural that businesses want to invest in the best contractors. ## Next steps? If you are a contractor who is working within one of these areas, it is imperative that your accountant is being proactive in ensuring that you are working in the most tax-efficient way. If for any reason you are considering switching accountants, you may find our article, ‘[Switching Contractor Accountants’](https://sg-accounting.co.uk/blog/switching-contractor-accountants/), an interesting read. ***If reading this list has spurred you on to become a contractor, our free ‘Guide to Contracting’, details everything you need to know about taking your first steps into the world of contracting. [Click here to download a copy](https://sg-accounting.co.uk/guides/a-guide-to-contracting/).*** **Categories:** Finance, New to contracting --- ### [Overseas contracting: top things to remember when contracting abroad](https://sg-accounting.co.uk/blog/overseas-contracting/) **Published:** February 7, 2019 **Author:** Kerry Newman **Content:** If you’ve had enough of the British weather and pine for warmer weather, or, if you’re keen to try out working in a different country, then contracting overseas could be a great option. Plus, it’s never been easier to work overseas – a laptop and a phone are all you may physically need. ![aeroplane in the sky showing the ability for contractors to fly anywhere.](https://sg-accounting.co.uk/wp-content/uploads/2019/02/aeroplane-1.jpg "aeroplane | SG Accounting") But, before you book your flight ticket, there are some important things you need to take into consideration, these include: ## **Documentation** For the brief amount of time, we remain in the EU, you don’t need a visa to travel to other EU countries. However, you may be required to obtain a permit to contract in some EU states. If you’re looking to work as a contractor in countries outside of the EU, such as Dubai, for instance, you need to obtain a visa. Depending on the country, this can be a lengthy process, and as such some clients require you to have all the relevant documentation already in place before they’ll offer you a contract. ## **Money** When working abroad, you’ll probably get paid in the currency of the country you’re contracting in. When you want to convert this money to sterling, you’ll face exchange rates and possible transfer fees. This can be costly if you are doing it on a regular basis. ![Exchange rates](https://sg-accounting.co.uk/wp-content/uploads/2019/02/exchangerates.jpg "exchangerates | SG Accounting") As it’s impossible to know when exchange rates will go up or down, it’s important you research the cheapest way to exchange or transfer money. It can work out cheaper to use a provider like [Transferwise](https://wise.com/) rather than a high street bank as they use a mid-market rate and offer low-fees on transfers. ## **Relocation expenses** Relocating abroad is not cheap, it becomes even more expensive if you plan to take your family with you. The costs of flights, visa’s and accommodation can soon add up. If you’re moving to work on a long-term contract, it may be worthwhile enquiring if your client can assist with some of the relocation costs. ## **Taxes** Working as a contractor overseas can be complicated in terms of tax. Where you pay tax and how much depends on your country of residence and the country you are contracting in. If you’re classed as a UK-resident, you’ll be required to pay tax on your income here in the UK and in the country you’re contracting in. If you are not a UK resident, you don’t pay UK tax on your foreign income. There is some good news though, the Double Taxation Treaty allows you to claim some tax relief. The rate of relief that is available depends on the agreement that is in place between the UK and the country in which you’re working. Finally, if you plan to return to the UK at some point, we strongly advise you make voluntary National Insurance Contributions, as this maintains your entitlement to receive certain benefits and the State Pension. Contracting overseas opens up the opportunity for you to work on projects you may not have the chance to do so here in the UK. Plus, it exposes you to new cultures and gives you the chance to learn a new language, which all look great on your CV. However, relocating abroad for work is a big decision and there are lots of things to consider first, particularly your tax situation. ***Our team at SG Accounting, have lots of experience in helping contractors prepare themselves for working abroad. Give us a call on 01962 867550 and we’ll be happy to discuss your current situation and offer advice on how best to reduce your tax liabilities whilst working overseas.*** **Categories:** New to contracting, Tax --- ### [SG are pleased to announce that our FCSA accreditation has been renewed for another year](https://sg-accounting.co.uk/blog/sg-are-pleased-to-announce-that-our-fcsa-accreditation-has-been-renewed-for-another-year/) **Published:** May 24, 2022 **Author:** Kerry Newman **Content:** **Who are the FCSA?** The Freelancer and Contractor Services Association (FCSA) is the UK’s leading membership body, that’s dedicated to raising standards, and promoting supply chain compliance for the temporary labour market. **Why are they important to contractor service providers?** When a contractor or freelancer service provider is awarded FCSA accreditation, it means that they’ve been recognised as the industry’s compliance gold standard. To be awarded accreditation a company must go through rigorous and stringent annual assessments, which are carried out independently by nationally renowned professional service firms. FCSA accreditation is awarded to Umbrella Companies, Limited Company advisors, and self-employed / CIS contractor providers that demonstrate the highest standards in industry. **What does it mean to be FCSA accredited?** Having FCSA accreditation provides clients and employees with the assurance that our practices and business are fully compliant and transparent. It allows new clients to sort the reliable Umbrella Companies and Limited Company contractor accountancies apart from those who operate untrustworthy practices, such as tax evasion. It allows contractors the safety and reassurance that the service provider they’re using is 100% compliant, and will keep them on the right side of legislation. **What will SG Accounting be doing to support contractors in the future?** Being FCSA accredited shows our clients and the rest of the industry the high level of professionalism and compliance which we operate at, and the standard we offer. Being FCSA accredited means we’re operating at the level expected of us, and we strive to continue at nothing less. We’re proud to once again be FCSA accredited, along with our company brand, [SG Umbrella](https://sg-umbrella.co.uk/). For more information about our FCSA accreditation take a look at the FCSA website, or speak to your SG Accountant. **Categories:** News **Tags:** Kerry Newman --- ### [Being paid by an umbrella company](https://sg-accounting.co.uk/blog/being-paid-by-an-umbrella-company/) **Published:** December 10, 2018 **Author:** Kerry Newman **Content:** If you’re thinking of becoming a contractor, the two main ways you can work are through your own limited company or via an umbrella company. We advise individuals who are serious about contracting or who want to work the most tax-efficient way as possible that working via a limited company is the best option for them. However, if you just want to tip your toe into contracting to see what it’s like, or don’t want the extra responsibility of running a limited company, working through an umbrella company is a good option too. This article explains the benefits of working through an umbrella company and details how you’ll get paid. ## **What is an umbrella company?** ![Question Mark on chalk board. What is an umbrella company?](https://sg-accounting.co.uk/wp-content/uploads/2018/11/Howwillthiswork.jpg "Howwillthiswork | SG Accounting") An umbrella company is defined as “*a company that acts as an employer to agency contractors who work under a fixed term contract, usually through a recruitment agency*.” Basically, instead of signing a contract with the agency or end client you sign a contract with the umbrella company, who effectively becomes your employer. The process of signing up to and getting paid by an umbrella agency is as follows: 1. Find a placement (typically through an agency). The umbrella company will then sign a contract with the agency 2. You will sign a contract with the umbrella company 3. Once you have worked your pre-set hours each week, you’ll complete a timesheet and pass this onto your manager for them to sign 4. You’ll forward a copy of this timesheet (detailing the number of hours worked) to the recruitment agency and the umbrella company 5. Your umbrella company will invoice the agency, who will in turn invoice the client 6. The umbrella company receives payment from the agency and prepares to pay you using their payroll It’s straight forward really! **Tip**: Today, most contracts are found through recruitment agencies. It seems like some recruitment agencies have close ties with specific umbrella companies. The agency may make it seem like you have to use this umbrella company. You don’t! You are free to choose your own. ## **Benefits of an umbrella company** ![Thumbs Up, positive about the benefits of being paid by an Umbrella Company.](https://sg-accounting.co.uk/wp-content/uploads/2018/12/ThumbsUp.jpg "ThumbsUp | SG Accounting") Working through an umbrella company is a stress-free way to contract. You don’t have the added paperwork that comes with being a director of a limited company. Plus, your tax and National Insurance Contributions are taken care of by the umbrella company. In addition to this, as you are working through an umbrella company, you are entitled to receive full employment rights and benefits, like holiday, sick and paternity or maternity pay. Something you don’t get when working through a limited company. ## **Getting paid via an umbrella company** The main difference of working through an umbrella company versus working through your own limited company, is that all UK umbrella companies pay you PAYE. This is similar to, as if you were working as a permanent employee. Therefore, you will be paid a salary net of Income Tax and National Insurance Contributions, plus the pre-agreed umbrella company’s fee and any other deductions, like pension contributions. Ultimately, you will end up with less take home pay than if you worked through your own limited company, but you’ll also have less paperwork! ***If you are interested in finding out further details on how to move into contracting, you can*** [***download***](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) ***our free guide to contracting, which explains everything you need to know. Or, if you’d like to talk to one of our Director’s about our umbrella service, give us a call on 01962 867550, or send us a* *[message](https://sg-umbrella.co.uk/contact/)* *via our website.*** **Categories:** Umbrella **Tags:** New - Guide, New - Service --- ### [Making Tax Digital - a contractor's look at when, where and how you'll be affected](https://sg-accounting.co.uk/blog/making-tax-digital-a-contractors-look-at-when-where-and-how-youll-be-affected/) **Published:** November 29, 2021 **Author:** Kerry Newman **Content:** **What is Making Tax Digital (MTD)?** MTD is the government’s plan to transform the tax system and move everything online. The Treasury minister Jesse Norman, has hailed the expansion of MTD the ‘next step to creating a modernised digital tax system fit for the 21st century’. He said that MTD should make ‘keeping on top of tax affairs easier, boost productivity and reduce error’. Originally introduced back on April 1st 2019, all VAT registered businesses with a taxable turnover that exceeded the £85,000 VAT threshold, were now required to use compatible digital software to store and submit their VAT information to HMRC. From April 1st 2022, all businesses that are VAT registered, must follow the new MTD rules, regardless of whether their taxable turnover is above the £85,000 threshold. The government is also extending MTD to include Self Assessment Tax Return information (by April 2024) and Corporation Tax (date to be confirmed). **What records will you be required to keep digitally?** - Your business name - Business’ address - VAT registration number - Your VAT accounting schemes (if you currently use any) **When making a supply to customers (your output VAT):** - The supply date - The supply value - The VAT rate charged **When receiving a supply (input VAT):** - The supply date - The supply value, including any exempt or zero rated VAT - The amount of claimable input tax **Your VAT account must include:** - Sales tax output dates - Output tax due on acquisitions from other EU member states - The tax payable on behalf of your supplier under a reverse charge procedure - Any tax reclaimable following a correction or error adjustment - Any other necessary adjustment required by VAT rules **When do you need to start keeping digital records?** If your business is VAT registered with a taxable turnover above the VAT threshold of £85,000 or more, you will have already been required to do so since April 1st 2019. From April 1st 2022, every VAT registered business will be required to keep digital records, regardless of their turnover. **What is the soft landing period?** For the VAT periods beginning in the 2019/20 tax year, all businesses won’t need digital links for all software, and will be able to cut and paste or manually transfer records instead. Be aware that this doesn’t include the actual VAT return submission, which must be shared with HMRC using an API. **Will MTD mean an increase in business admin?** For most Limited Company contractors, they have found that using MTD compatible software for VAT has actually saved them time and reduced their admin burden. **Will you be fined if you don’t comply?** If you fail to follow the MTD rules and submit your VAT information to HMRC using compatible software, you will be subject to fines and penalties. **Will MTD be extended to any other taxes?** Yes, the MTD rules will be extended to include the submission of Self Assessment Tax Returns by 2024, and Corporation Tax (date to be confirmed). **When can you apply for MTD?** You’re able to sign up now, using the [MTD sign up form via the gov.uk website](https://www.gov.uk/charge-reclaim-record-vat). **MTD for Income Tax** The implementation for MTD for Income Tax Self Assessment (MTD for ITSA) has been delayed until April 6th 2024. This applies to an individual, partnership or trust with a total business or income from property that exceeds £10,000 per year. **How SG Accounting can help you to prepare for MTD** The good news for our clients is that we will continue to ensure everyone is compliant, and we’ll take as much of the headache away from you as possible. The process you currently use with your SG accountant won’t change, as our processes are all MTD compatible. If you use FreeAgent they’re also digitally compatible, so there’s no need to source alternative software. When it comes to changes within tax, we’ve got our finger on the pulse, and are ready to support you and make the transition as smooth and painless as possible. Get in touch with your accountant for more detailed information. **Categories:** New to contracting, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [Coronavirus business support measures explained](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/) **Published:** March 23, 2020 **Author:** Kerry Newman **Content:** This guide covers all of the business support measures announced by Rishi Sunak in March and is **being updated as and when new initiatives are launched or changes are made** to existing ones. Please bookmark this page to keep up to date. *Last updated 17th August 2020:* [Additions to Grants for the self-employed](#2) ### **Contents** - [Coronavirus Job Retention Scheme](#1) - [Local authority discretionary grants](#16) - [Grants for the self-employed](#2) - [Bounce back loan scheme](#3) - [Ban on evictions for commercial tenants](#4) - [3 month extension for filing business accounts](#5) - [Deferral of VAT liability](#6) - [Deferral of Income Tax payment](#7) - [Other Tax payments (HMRC Time to Pay)](#8) - [Support for businesses who are paying sick pay to employees](#9) - [Support for retail, hospitality and leisure businesses that pay business rates](#10) - [Cash grants for retail, hospitality and leisure businesses](#11) - [Support for nursery businesses that pay business rates](#12) - [Support for businesses that pay little or no business rates](#13) - [Coronavirus Business Interruption Loan Scheme](#14) - [Insurance](#15) ## **Coronavirus Job Retention Scheme** A generous initiative that will allow an employer to “furlough” a worker between 1 March 2020 and 31 October 2020 (but the 10th June was the last date at which you can furlough someone for the first time – more details below). This is designed to help employers pay up to 80% of the salary of those employees that would otherwise have been made redundant during and because of this crisis. This is subject to a cap of £2,500 per month per employee. **Who is eligible?** All UK businesses are eligible as are Company Directors including Limited Company Contractors The HMRC guidance says: “As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme….the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.” Furthermore, public sector clients are encouraged to furlough their contractor staff if need be: “If Contingent Workers are unable to work due to COVID-19, for example, due to sickness, self-isolation, or the temporary closure of offices, they should be paid at 80% of their pay rate up to a maximum of £2,500 per month.” Those working through an umbrella company are eligible to be furloughed through the scheme and should be agreed with the umbrella agency as the deemed employer (although you’d want to discuss with the end client too) To be eligible, the staff member has to have been employed by the business on or before March 19th 2020. **What will you need to do?** Designate employees as “furloughed workers” and notify your employees of this change (note that as of the 10th June you can only extend the furlough of someone already previously furloughed – no new employees can be included) Submit information to HMRC about the employees that have been furloughed and their earnings through an [online portal](https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme). **How will the wages payment be calculated?** Wages for full or part time employees on a salary will be calculated based on 80% of the salary in their last pay period prior to 19th March 2020. **When will the scheme end?** The scheme will close to anyone who hasn’t been furloughed for 3 weeks by 30 June, so you will only be able to claim for employees after that if they have been furloughed for a full three-week period at any time before the end of June. So a period of furlough would have to have started on or before 10 June. You will then have until 31 July to make a claim for any periods of furlough up until 30 June – this applies to both employees furloughed for the first time and those you have previously furloughed and claimed for. For employees previously furloughed (for at least 3 weeks prior to 30 June), the scheme is open until October 31 although the rules of the scheme are changing from 1 July. **New rules from 1 July** - For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work. - For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough. - For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed. - For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed. ## Local authority discretionary grants scheme In an effort to plug a gap, the government announced in Late May that discretionary grant funds will be made available via local councils. Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for this Discretionary Grants Scheme. **Who is eligible?** You may be eligible if your business: - is based in England - has fewer than 50 employees - has fixed building costs such as rent - was trading on 11 March 2020 - has been adversely impacted by the coronavirus Local councils have discretion about how to prioritise the funding so you’ll have to check with your council for details of their scheme. **What will you need to do?** Visit your local council’s website to find out how to apply. You can find the website for your local council [here](https://www.gov.uk/find-local-council). ## **Grants for the self-employed** Self-employed workers are apply to for up to 2 taxable grants to help them cope with the financial impact of coronavirus. **Grant 1** applications opened on 13 May and closed on 13 July and cover 3 months’ worth of profit at a rate of 80% of average monthly trading profits or £2,500, whichever is lowest **Grant 2** The second stage of Self Employment Income Support Scheme (SEISS) opened for applications on August 17th and will cover 3 months’ worth of profit at a rate of 70% of average monthly trading profits and capped at £6,570. **Who is eligible?** To be eligible for grant 2 your business must have been adversely affected by Coronavirus on or after 14 July 2020 and you must : - have traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year - have traded in the tax year 2019 to 202 - intend to continue to trade in the tax year 2020 to 2021 You can make a claim for the second grant if you’re eligible, even if you did not make a claim for the first grant. **What will you need to do?** - If you want to claim the second and final grant you must make your claim on or before 19 October 2020. - You will need your Self Assessment Unique Taxpayer Reference (UTR), National Insurance number and Government Gateway user ID and password - You can complete the claim form [here](https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme) ## **Bounce-back loan scheme** The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. The length of the loan is 6 years, but you can repay early without paying a fee. **Who is eligible?** You can apply for a loan if your business: - is based in the UK - was established before 1 March 2020 - has been adversely impacted by the coronavirus Businesses from any sector can apply, except banks, insurers and reinsurers, public-sector bodies, state-funded primary and secondary schools. You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) or COVID-19 Corporate Financing Facility. If you’ve already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. **What will you need to do?** There are 11 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website. The lender will ask you to fill in a short online application form and self-declare that you are eligible. The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed. ## **Ban on evictions for commercial tenants** Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction. These measures will mean no business will be forced out of their premises if they miss a payment in April, May and June. **Who is eligible?** All UK businesses renting commercial premises are eligible **What will you need to do?** Discuss with your landlord initially to see if a voluntary arrangement involving rent deferral In any event, there now exists a legislative backstop to prevent evictions due to lack rent payment ## **3 month extension for filing business accounts** From 25 March 2020, businesses are able to apply for a 3-month extension for filing their accounts. **Who is eligible?** All UK businesses are eligible **What will you need to do?** - Apply online [here](https://find-and-update.company-information.service.gov.uk/extensions) – it will take around 15 minutes - Those citing issues around COVID-19 will be automatically and immediately granted an extension ## **Deferral of VAT liability** If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you can defer the payment until March 2021. HMRC will not charge interest or penalties on any amount deferred. **Who is eligible?** All UK VAT registered businesses are eligible to defer: - quarterly and monthly VAT returns’ payments for the periods ending in February, March and April - payments on account due between 20 March 2020 and 30 June 2020 - annual accounting advance payments due between 20 March 2020 and 30 June 2020 **What will you need to do?** - This is an automatic offer with nothing for you to do in order to claim. - Direct Debits – Cancel your direct debit with the bank - You will still be required to file your VAT return - You will need to pay by March 2021 - VAT refunds and reclaims will still be paid as usual ## **Deferral of Income Tax payment** A measure to help self employed defer a Self Assessment payment on account from July 2020 to January 2021. **Who is eligible?** All self assessment payers can defer these payments, including directors of ltd companies such as contractors. **What will you need to do?** This is an automatic offer with nothing you need to do to take advantage of this. Just don’t make the payment if you are self employed.No penalties of interest for late payment will be charged in the deferral period. ## **Other Tax payments (HMRC Time to Pay)** This is a scale up of an existing scheme (Time to Pay) for businesses and individuals in financial distress. The help offered here is available on a case by case basis and tailored to individual circumstances. **Who is eligible?** Anybody who pays tax to the UK Government and has outstanding tax bills. **What will you need to do?** - - - - If you have missed a tax payment or are worried you will miss your next one due to Covid-19 then call HMRC’s dedicated helpline: 0800 0159 559 - It is always better to talk to HMRC rather than ignoring a tax debt ## **Support for businesses who are paying sick pay to employees** In the past SSP (Statutory Sick Pay) has not been recoverable by an employer from UK Government. It was announced that temporary legislation will be put in place to allow employers to reclaim SSP (£94.25 per week) for the first 2 weeks for employees off work due to Covid-19. SSP will be paid from day 1 rather than day 4 if due to Covid-19 and applies retrospectively from 13 March 2020 **Who is eligible?** UK based employers with fewer than 250 employees at 28 February 2020 can claim for the first 2 weeks of employee sickness due to Coronavirus. This includes for quarantined individuals. Directors of ltd companies with less than 250 employees can pay themselves two weeks SSP (£94.25 per week) if they earn at least £118 per week. The self employed are not eligible for SSP but can claim Universal Credit or Employment and Support Allowance payable from day 1 of sickness rather than day 8. The earnings floor has been removed. **What will you need to do?** The online service you’ll use to reclaim SSP is not available yet. HMRC will announce when the service is available and this guidance will be updated. Meantime, employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 Online. ## **Support for retail, hospitality and leisure businesses that pay business rates** A business rates holiday for all businesses in the retail, hospitality and leisure industry. So no business rates to pay for April 2020 to March 2021. **Who is eligible?** A business based in England that is in the retail, hospitality and/or leisure industry. This includes shops, restaurants, cafes, drinking establishments, cinemas and live music venues, for assembly and leisure and hotels, guest & boarding premises and self-catered accommodation. **What will you need to do?** - - - - This will happen automatically and eligible businesses will have their bills reduced to zero. ## **Cash grants for retail, hospitality and leisure businesses** The Retail and Hospitality Grant Scheme provides businesses in that sector with cash grants of up to £25,000 per property. Businesses with a rateable value of under £15,000 will receive a £10,000 grant. Businesses with a rateable value of £15,001 to £51,000 a grant of £25,000 will be received. **Who is eligible?** A business based in England that is in the retail, hospitality and/or leisure industry. This includes shops, restaurants, cafes, drinking establishments, cinemas and live music venues, for assembly and leisure and hotels, guest & boarding premises and self-catered accommodation. **What will you need to do?** You do not need to do anything. Your local authority will write to you if you are eligible. ## **Support for nursery businesses that pay business rates** A business rates holiday will be introduced for all nursery businesses. So no businesses rates payable for April 2020 to March 2021. **Who is eligible?** English based nurseries that are on Ofsted Early Years Register. **What will you need to do?** This will be an automatic reduction in business rates for eligible businesses and you should receive a new bill from your local authority. ## **Support for businesses that pay little or no business rates** The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. **Who is eligible?** A business based in England that occupies property and already receives small business rate relief or rural rate relief. **What will you need to do?** You do not need to do anything. Your local authority will write to you if you are eligible for this grant. ## **Coronavirus Business Interruption Loan Scheme** Support primarily for small and medium-sized businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. The maximum length of the facility depends on the type of finance you apply for and will be up to 3 years for overdrafts and invoice finance facilities and up to 6 years, for loans and asset finance facilities. **Who is eligible?** You are eligible for the scheme if your business: - - - - is based in the UK - has an annual turnover of up to £45 million You need to show that your business: - - - - would be viable were it not for the pandemic - has been adversely impacted by the coronavirus **What will you need to do?** The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. There are over 50 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website. You’ll need to tell the lender: - - - - the amount you’d like to borrow - what the money is for - how long you’d like to pay it back Depending on the lender and the amount requested you may be asked for some or all of the following supporting documents: - - - - management accounts - cash flow forecast - business plan - historic accounts - details of assets ## **Insurance** Most businesses are unlikely to be covered but businesses that do have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry has confirmed that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics. Hi Niels, from Zoe **Categories:** Coronavirus, News --- ### [Sunak delivers Budget to meet ‘challenging times’](https://sg-accounting.co.uk/blog/sunak-delivers-budget-to-meet-challenging-times/) **Published:** March 12, 2020 **Author:** Kerry Newman **Content:** ## Sunak delivers Budget to meet ‘challenging times’ Chancellor Rishi Sunak delivered his first Budget, and the first since the UK’s departure from the European Union, against the backdrop of the coronavirus outbreak. The Chancellor announced a £30 billion stimulus package to support the economy through coronavirus contagion and pledged to give the NHS whatever extra resources are needed to cope. Following the news that the Bank of England had reduced interest rates to 0.25%, in an emergency response to the coronavirus, Mr Sunak put further measures in place. These include Statutory Sick Pay (SSP) for employees who are advised to self-isolate, even if they are displaying no symptoms. The government will also meet some SSP costs for businesses. In addition, business rates for shops, cinemas, restaurants and music venues in England with a rateable value below £51,000 have been suspended for a year. This tax holiday will be worth up to £25,000 to thousands of businesses across the retail, leisure and hospitality sectors. Citing the latest economic forecasts from the Office for Budget Responsibility, Mr Sunak said the economy is predicted to grow by 1.1% this year. However, the GDP forecast does not fully account for the impact of coronavirus. Turning to duties, tax on beer, wine, cider and spirits have been frozen while tobacco duty will continue to rise by inflation plus 2%. Fuel duty will also remain frozen, for a tenth consecutive year, despite widespread speculation that it would rise. However, Mr Sunak introduced other green measures including a new tax on plastic packaging and freezing the climate change levy on electricity while raising it on gas. The Chancellor also promised to spend £500 million to support the rollout of new rapid charging hubs for electric cars. In addition, Mr Sunak resisted calls to end Entrepreneurs’ Relief, although the lifetime allowance will be reduced from £10 million to £1 million. The Chancellor will abolish the so-called ‘tampon tax’, reducing the VAT rate on sanitary products to zero from 1 January 2021, as well as scrapping VAT on digital e-publications, including e-books, e-newspapers, e-magazines and academic e-journals, from 1 December 2020. The Budget confirmed increased spending on infrastructure projects including broadband, railway and roads. £5 billion was promised to get gigabit-capable broadband into the hardest to reach places and £510 million of new investment into the shared rural mobile phone network. ### ### **Budget Highlights** - A reduction in the Entrepreneurs’ Relief lifetime limit - An increase in the Employment Allowance - An increase in the rate of Structures and Buildings Allowance - An increase and extension of business rates discounts - Extended access to Statutory Sick Pay due to coronavirus - An increase to the National Insurance thresholds - Fuel duty to be frozen for the 10th consecutive year --- ## ## **Personal tax** ### Pensions changes The pensions annual allowance (currently £40,000) is the maximum amount of tax-relieved pension savings that can be accrued in a year. However, for those on higher incomes, the annual allowance is reduced by £1 for every £2 that an individual’s ‘adjusted income’ exceeds £150,000, to a minimum annual allowance of £10,000. Adjusted income is broadly net income before tax with the addition of any pension accrual. The taper potentially applies to an individual with income before tax, without the addition of the pension accrual, above £110,000. This is known as the ‘threshold income’. Adjusted income and threshold income will each be raised by £90,000 for 2020/21. The threshold income will be £200,000, so individuals with income below this level will not be affected by the tapered annual allowance. The annual allowance will begin to taper down for individuals who also have an adjusted income above £240,000. There is also a change to the minimum annual allowance. The minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000 from 6 April 2020. This reduction will only affect individuals with adjusted income over £300,000. ### ### Support during the coronavirus The Prime Minister previously announced that the forthcoming COVID-19 Bill will temporarily allow Statutory Sick Pay (SSP) to be paid from the first day of sickness absence, rather than the fourth day, for people who have COVID-19 or have to self-isolate in accordance with government guidelines. The Budget sets out a further package to widen the scope of SSP and make it more accessible. The government will temporarily extend SSP to cover: - individuals who are unable to work because they have been advised to self-isolate - people caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate. ### ### **Support for those ineligible for SSP** The government recognises that self-employed people and employees earning below the National Insurance Lower Earnings Limit are not entitled to SSP and will offer financial support to these individuals through a ‘new style’ Employment and Support Allowance and Universal Credit. ## ### Child Trust Funds (CTFs) Junior ISAs and its precursor CTFs allow tax free savings to be made for children under 18. There is no access to the investments until the child is 18. CTF accounts will start to mature in September 2020 when the first children reach 18. Without regulatory change the investments would lose their tax advantaged status. CTF and ISA regulations have therefore recently been made which: - make sure that investments in CTF accounts retain their tax advantaged status post maturity, pending instructions from the account holder - allow savings transferred from a matured CTF to be disregarded for the annual ISA subscription limit. | ### Comment | |---| | Around six million children hold a CTF and approximately 800,000 will mature each year from September 2020. A significant proportion of these accounts are thought to be ‘dormant’ – holding just the contributions made by the government. Government contributions are not made to Junior ISAs. This government webpage:[bit.ly/2s8ceyz](https://www.gov.uk/find-hmrc-contacts/child-trust-fund-enquiries) allows a check to be made as to where a CTF is held but a Government Gateway user ID is required first. | ## ### Junior ISA and CTF annual subscription limits The annual subscription limit for Junior ISAs and CTFs will be increased from £4,368 to £9,000 for 2020/21. --- ## ## **Income tax and personal savings** The Chancellor announced the following income tax rates and allowances. ### Income tax rates and bands | ### 2020/21 | ### 2019/20 | |---|---| | **Band £** | **Rate %** | **Band £** | **Rate %** | | 0 – 37,500 | 20 | 0 – 37,500 | 20 | | 37,501 – 150,000 | 40 | 37,501 – 150,000 | 40 | | Over 150,000 | 45 | Over 150,000 | 45 | *Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.* ### Savings income | | ### 2020/21 | ### 2019/20 | |---|---|---| | Savings allowance basic rate | £1,000 | £1,000 | | Savings allowance higher rate | £500 | £500 | *A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band.* ### Dividend income | | **2020/21** | **2019/20** | |---|---|---| | Dividend allowance | £2,000 | £2,000 | | Dividend ordinary rate | 7.5% | 7.5% | | Dividend upper rate | 32.5% | 32.5% | | Dividend additional rate | 38.1% | 38.1% | ### Personal allowances | | **2020/21** | **2019/20** | |---|---|---| | **Personal allowance** | £12,500 | £12,500 | | **Personal allowance income limit** | £100,000 | £100,000 | | **Marriage allowance** Transferable between certain spouses where neither pay tax above the basic rate | £1,250 | £1,250 | | **Married couple’s allowance** (relief given at 10%) Either partner born before 6 April 1935 · minimum amount · income limit | £9,075 £3,510 £30,200 | £8,915 £3,450 £29,600 | | **Blind person’s allowance** | £2,500 | £2,450 | ## ### Scottish income tax rates and bands Savings and dividend income are taxed using UK rates and bands. | **2020/21** | **2019/20** | |---|---| | **Band £** | **Rate %** | **Band £** | **Rate %** | | 0 – 2,085 | 19 | 0 – 2,049 | 19 | | 2,086 – 12,658 | 20 | 2,050 – 12,444 | 20 | | 12,659 – 30,930 | 21 | 12,445 – 30,930 | 21 | | 30,931 – 150,000 | 41 | 30,931 – 150,000 | 41 | | Over 150,000 | 46 | Over 150,000 | 46 | ## ### Welsh income tax rates Although income tax for Wales has been devolved, Welsh resident taxpayers continue to pay the same overall rates as taxpayers in England and Northern Ireland. --- ## ## **Employment taxes** ### National Insurance thresholds The government has recently announced National Insurance thresholds for 2020/21. Most thresholds will rise with inflation. Two thresholds, however, will rise by 10% from £8,632 to £9,500: - the primary threshold – which sets the level at which employees start to pay Class 1 National Insurance contributions (NICs) - the lower profits limit – which sets the level at which the self-employed start to pay Class 4 NICs. The upper thresholds which apply to these two classes of NICs remain at £50,000. | ### Comment | |---| | The secondary threshold, which sets the level at which employers pay the main rate of NICs, only rises in line with inflation. | ## ### Off-payroll working in the private sector The changes to the off-payroll working rules (commonly known as IR35), which came into effect in April 2017 for the public sector, will be extended to the private sector from April 2020. Draft legislation has been issued. The new rules apply to payments made for services provided on or after 6 April 2020. The off-payroll working rules apply where an individual (the worker) provides their services through an intermediary (typically a personal service company) to another person or entity (the client). The client will be required to make a determination of a worker’s status and communicate that determination. In addition, the fee-payer (usually the organisation paying the worker’s personal service company) will need to make deductions for income tax and NICs and pay any employer NICs. Only medium and large businesses will be subject to the 2020 rules, so small businesses will not need to determine the status of the off-payroll workers they engage. A small company is one which meets two of these criteria: its annual turnover is not more than £10.2 million: it has not more than £5.1 million on its balance sheet: it has 50 or fewer employees. For unincorporated organisations it is only the annual turnover test that applies. Review In January 2020, the government announced a review of the implementation of the April 2020 reform, to address concerns from affected businesses and individuals. The government has confirmed the changes will go ahead but: - businesses will not have to pay penalties for errors relating to off-payroll working in the first year, except in cases of deliberate non-compliance - there will be a legal obligation on clients to respond to a request for information about their size from the worker or the fee-payer. ## Employer provided cars The scale of charges for calculating the taxable benefit for an employee who has use of an employer provided car is computed by reference to bands of CO2 emissions multiplied by the original list price of the vehicle. The maximum charge is capped at 37% of the list price of the car. For 2019/20 the rates increased by 3% from the rates applying for 2018/19. The government announced in Budget 2017 that CO2 emissions for cars registered from April 2020 will be based on the Worldwide Harmonised Light Vehicles Test Procedure (WLTP). Draft legislation has been issued to amend the previously planned benefit percentages for 2020/21 through to 2022/23: - All zero emission cars will attract a reduced percentage of 0% in 2020/21 and 1% in 2021/22, before returning to the planned 2% rate in 2022/23. - For cars registered before 6 April 2020, the current test procedure will continue to apply and there are no further changes to percentages previously set for 2020/21. These rates will be frozen at the 2020/21 level for 2021/22 and 2022/23. - For cars first registered from 6 April 2020 most rates will reduce by 2% in 2020/21 before returning to planned rates over the following two years, increasing by 1% in 2021/22 and 1% in 2022/23. | ### Comment | |---| | WLTP aims to be more representative of real world driving conditions, compared to the current test known as the New European Driving Cycle. The government estimates that reported CO2 values may be on average about 20 – 25% higher under the WLTP testing standards compared to the current test. | ## Employment Allowance The Employment Allowance provides businesses and charities with relief from their employer NICs bill. Regulations have been issued to restrict the Employment Allowance, from 6 April 2020, to those employers whose employer NICs bill was below £100,000 in the previous tax year. Employers who are connected to other employers (such as companies within a group) will need to add together all of their employer Class 1 NICs liabilities incurred in the tax year prior to the year of claim to determine eligibility. The maximum Employment Allowance will be increased from £3,000 to £4,000 with effect from 6 April 2020. From 6 April 2020 the Employment Allowance will operate as de minimis State aid. This means it will count towards the total aid a business is entitled to under the relevant de minimis State aid cap. | ### Comment | |---| | De minimis State aid rules apply if a business engages in economic activity, providing goods or services to the market. Most businesses will not have received de minimis State aid before so will not need to do further checks to determine if they are eligible for the Employment Allowance. | ## ## Loan Charge review The Loan Charge tackles disguised remuneration tax avoidance schemes. These are tax arrangements that seek to avoid income tax and NICs by paying income to individuals in the form of loans, usually via an offshore trust, with no expectation that the loans will ever be repaid. The charge applies to any loans made through disguised remuneration schemes after 6 April 1999, which had not been repaid by 5 April 2019. Draft legislation has been issued to amend the scope of the Loan Charge: - It will now only apply to outstanding balances of disguised remuneration loans made between 9 December 2010 and 5 April 2019 inclusive. - It will not apply to loans made in tax years before 2016/17 where a reasonable disclosure of the use of a disguised remuneration tax avoidance scheme was made within the relevant tax return or associated documents where appropriate, and HMRC failed to take any action (for example by opening an enquiry). - Those affected by the Loan Charge will be able to elect to split their loan balance over three consecutive years 2018/19 to 2020/21 (rather than the full charge arising in 2018/19). - The date by which the additional information form must be returned to HMRC will move from 1 October 2019 to 1 October 2020. The form requires taxpayers to provide full information to HMRC relating to any outstanding disguised remuneration loans for which they will need to make tax payments. --- ## ## **National insurance** ### 2020/21 Class 1 (employed) rates | ### Employee | | ### Employer | | |---|---|---|---| | **Earnings per week** | % | **Earnings per week** | % | | Up to £183 | 0 | Up to £169 | 0 | | £183.01 – £962 | 12 | Over £169 | 13.8 | | Over £962 | 2 | | | *Entitlement to contribution-based benefits for employees retained for earnings between £120 and £183 per week. The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £962 per week.* | **Class 1A (employers)** | On employee taxable benefits | 13.8% | |---|---|---| | **Class 1B (employers)** | On PAYE Settlement Agreements | 13.8% | | **Class 2 (self-employed)** | Flat rate per week | £3.05 | | | Small profits threshold | £6,475 per annum | | **Class 3 (voluntary)** | Flat rate per week | £15.30 | | **Class 4 (self-employed)** | On profits between £9,500 – £50,000 | 9% | | | Excess over £50,000 | 2% | ### **Minimum wage** Increases in the National Minimum Wage and National Living Wage rates now occur in April each year. | **Age** | ### NLW | ### 21 – 24 | ### 18 – 20 | ### 16 and 17 | ### Apprentices | |---|---|---|---|---|---| | From 1 April 2019 | £8.21 | £7.70 | £6.15 | £4.35 | £3.90 | | From 1 April 2020 | £8.72 | £8.20 | £6.45 | £4.55 | £4.15 | *Apprentice rates apply to those under 19, or 19 or over and in the first year of their apprenticeship. National Living Wage applies to those aged 25 and over.* ## **Tax and Travel** ### Mileage rates Changes to the HMRC business mileage rates are announced from time to time. The fuel only advisory rates below relate to company cars only and apply from 1 March 2020. | ### Car – fuel only advisory rates Engine capacity | ### Petrol | ### Diesel | ### LPG | |---|---|---|---| | 1400cc or less | 12p | 9p | 8p | | 1401cc to 1600cc | 14p | 9p | 10p | | 1601cc to 2000cc | 14p | 11p | 10p | | Over 2000cc | 20p | 13p | 14p | For those using their own vehicle the following mileage allowance payments apply. | ### Vehicle | ### First 10,000 miles | ### Thereafter | |---|---|---| | Car/van | 45p | 25p | | Motorcycle | 24p | 24p | | Bicycle | 20p | 20p | ## ### Car benefits | ### 2020/21 | ### Cars registered pre 6.4.20 | ### Cars registered after 5.4.20 | |---|---|---| | ### CO2 emissions ### (g/km) | % of list price taxed | % of list price taxed | | 0 | 0 | 0 | | 1-50 Electric range | | | | >130 | 2 | 0 | | 70-129 | 5 | 3 | | 40-69 | 8 | 6 | | 30-39 | 12 | 10 | | <30 | 14 | 12 | | 51-54 | 15 | 13 | | For every extra 5 | +1 | +1 | | 160 and above | 37 | n/a | | 170 and above | n/a | 37 | | *For fully diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard) but the maximum is still 37%. For emissions over 75g/km if the CO2 figure does not end in a 5 or a 0 round down to the nearest 5 or 0.* | ## **Business tax** ### Corporation tax rates Corporation tax rates have already been enacted for periods up to 31 March 2021. The main rate of corporation tax is 19%. The rate for the Financial Year beginning on 1 April 2020 was due to fall to 17% but the Chancellor has announced the rate will remain at 19%. ### Capital Allowances: Structures and Buildings Allowance The annual rate of capital allowances available for qualifying investments to construct new, or renovate old, non-residential structures and buildings will increase from 2% to 3%. The change will take effect from 1 April 2020 for corporation tax and 6 April 2020 for income tax. ### Enhanced Capital Allowances in Enterprise Zones The government has announced the 100% first year allowance for investment in new plant and machinery within designated assisted areas within Enterprise Zones will remain available for expenditure incurred in relation to all areas, whenever designated, until at least 31 March 2021. ### First year allowances for business cars from April 2021 The government has announced an extension to 100% first year allowances for zero-emission cars, zero-emission goods vehicles and equipment for gas refuelling stations by four years from April 2021. CO2 emission thresholds will also be amended from April 2021. These determine the rate of capital allowances available through which the capital expenditure for business cars can be written down. The thresholds will be reduced from 50g/km to 0g/km for the purpose of the first year allowances for low CO2 emission cars and from 110g/km to 50g/km for the purpose of WDAs for business cars. | ### Comment | |---| | The reduction in thresholds will mean that only business cars acquired with CO2 emissions of 0g/km will be eligible for first year allowances. Ultra-low emission vehicles which currently qualify for first year allowances if 50g/km or less will no longer qualify. They will be eligible for WDAs at the main rate (18%). Cars with CO2 emissions exceeding 50g/km will be eligible for WDAs at the special rate (6%). | ## ## Research and Development (R&D) tax relief The rate of tax credit for companies falling within the Research and Development Expenditure Credit (RDEC) scheme will rise by 1% to 13% from 1 April 2020. This relief is given as an above the line credit for companies undertaking qualifying R&D. Budget 2018 announced that, from 1 April 2020, the amount of payable R&D tax credit that a qualifying loss-making company can receive in any tax year will be restricted to three times the company’s total PAYE and NICs liability for that year. The government has now announced the implementation of the restriction will be delayed to 1 April 2021. ## Corporation tax loss relief Draft legislation has been issued to extend the rules that potentially limit the use of brought forward losses to include brought forward capital losses. Companies (and corporate groups) will continue to have a £5 million ‘deductions allowance’ before restrictions apply. The changes will have effect where carried forward capital losses are used to offset chargeable gains accruing from 1 April 2020. | ### Comment | |---| | The inclusion of capital losses will mean that it will be more likely that the deductions allowance will be exceeded. | ## Intangible fixed assets The government has announced an extension to corporation tax relief for intangible fixed assets. All pre-Finance Act 2002 intangible assets acquired from 1 July 2020 will come within the intangible fixed asset regime, subject to certain transitional provisions. | ### Comment | |---| | This measure removes a restriction that exists in relation to pre-Finance Act 2002 intangible assets that prevents some companies from claiming relief for older, well-established intellectual property rights. The change will mean that corporate intangible assets will now be relieved and taxed under a single regime for acquisitions from 1 July 2020. | ## ## Digital Services Tax The government has confirmed a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users. The tax only applies when the group’s worldwide revenues from these digital activities are more than £500 million and more than £25 million of these revenues are derived from UK users. The tax will apply from 1 April 2020. ## Freeports The government is consulting on proposals to create up to ten freeports across the UK which would have different customs rules to those which apply in the rest of the UK. The government is considering a UK freeport model which would include multiple customs zones located within or away from a port, as well as a type of special economic zone (SEZ) designated over or around the customs zones. The government intends to work with the devolved administrations to develop proposals to allow freeports to be created in Scotland, Wales and Northern Ireland, in addition to those in England. The proposals include the following customs and tariff benefits for businesses bringing goods into a freeport site: - duty suspension, with no tariffs, import VAT or excise to be paid on goods brought into a freeport from overseas until they leave the freeport and enter the UK’s domestic market - duty inversion, if the duty on a finished product is lower than that on the component parts, allowing businesses to import components duty free, manufacture the final product in the freeport, and then pay the duty at the rate of the finished product when it enters the UK’s domestic market - duty exemption for re-exports, allowing businesses to import components duty free, manufacture the final product in the freeport and pay no tariffs when the final product is re-exported - simplified customs procedures for businesses accessing freeports. | ### Comment | |---| | Freeports are secure customs zones located at ports where business can be carried out inside a country’s land border, but where different customs rules apply. Typically, goods brought into a freeport do not attract a requirement to pay duties until they leave the freeport and enter the domestic market. No duty is payable at all if the goods are re-exported. | ## ## Business rates Business rates have been devolved to Scotland, Northern Ireland and Wales. The government has already announced that, for one year from 1 April 2020, the business rates retail discount for properties with a rateable value below £51,000 in England will increase from one third to 50% and will be expanded to include cinemas and music venues. To support small businesses in response to COVID-19, the retail discount will be increased to 100% and expanded to include hospitality and leisure businesses for 2021. The government previously committed to introducing a £1,000 business rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020. To further support pubs, in response to COVID-19 the discount for pubs will be increased to £5,000. The government is launching a fundamental review of business rates to report in the autumn. A call for evidence will be published in the spring. ## Time to Pay The government will ensure that businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. HMRC has set up a dedicated COVID-19 helpline to help those in need, and they may be able to agree a bespoke Time to Pay arrangement. Time to Pay gives businesses a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back. ## Statutory Sick Pay The government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related SSP by refunding eligible SSP costs. The eligibility criteria for the scheme include: - the refund will be limited to two weeks per employee - employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020 - employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19 - employers should maintain records of staff absences, but should not require employees to provide a GP fit note - the eligible period for the scheme will commence from the day on which the regulations extending SSP to self-isolators come into force. **Capital taxes** ## Capital gains tax (CGT) rates The current rates of CGT are 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains; mainly chargeable gains on residential properties with the exception of any element that qualifies for Private Residence Relief. There are two specific types of disposal which potentially qualify for a 10% rate up to a lifetime limit for each individual: - Entrepreneurs’ Relief (ER). This is targeted at directors and employees of companies who own at least 5% of the ordinary share capital in the company, provided other minimum criteria are also met, and the owners of unincorporated businesses. - Investors’ Relief. The main beneficiaries of this relief are external investors in unquoted trading companies who have newly-subscribed shares. Investors’ Relief has a lifetime limit of £10 million, however the lifetime limit position for ER has been changed in the Budget and is considered further below. ## ## CGT annual exemption The CGT annual exemption is £12,000 for 2019/20 and £12,300 for 2020/21. ## Entrepreneurs’ Relief (ER) The lifetime limit is reduced from £10 million to £1 million for ER qualifying disposals made on or after 11 March 2020. There are special provisions for disposals entered into before 11 March 2020 that have not been completed. | ### Comment | |---| | The government’s manifesto stated clearly that there would be a reform and review of this relief, so a reduction in the limit was not unexpected, though the magnitude of the reduction and the immediate implementation will be a surprise. No other consultations to reform the relief were announced. | ## ## Private Residence Relief (PRR) Draft legislation has been issued to make changes to the PRR regime from 6 April 2020. For properties that have not been occupied throughout the period of ownership, available deductions for capital gains tax purposes will be amended as follows: - the final period exemption will be reduced from 18 months to nine months (there are no changes to the 36 months that are available to disabled persons or those in a care home) - lettings relief will be reformed so that it only applies in those circumstances where the owner of the property is in shared occupancy with a tenant. | ### Comment | |---| | At present, lettings relief gives up to £40,000 relief (£80,000 for a couple who jointly own the property) for someone letting part, or all, of a property which is their main residence, or was the former main residence at some point in their period of ownership. Despite concerns raised during the consultation about periods of letting prior to April 2020 and whether the current rules should be allowed to apply, the government is proceeding as planned and lettings reliefs will be abolished except in very limited circumstances of co-occupation with a tenant. The changes apply for disposals on or after 6 April 2020, regardless of when the period of letting took place. | ## ## Payments on account and 30 day returns Legislation has been enacted to change reporting obligations for residential property gains chargeable on UK resident individuals, trustees and personal representatives. Also introduced is a requirement to make a payment on account of the associated CGT liability. For disposals made on or after 6 April 2020: - a tax return is required if there is a disposal of UK land on which a residential property gain accrues - CGT is required to be computed on the reported gain in the tax return. The return needs to be filed and the CGT paid within 30 days of the completion date of the property disposal. The new requirements do not apply if a chargeable gain does not arise, for example where the gains are covered by PRR. ## Inheritance tax (IHT) nil rate bands The nil rate band has remained at £325,000 since April 2009 and is set to remain frozen at this amount until April 2021. An additional nil rate band, called the ‘residence nil rate band’ (RNRB), continues to be phased in. For deaths in 2019/20 it is £150,000 rising to £175,000 for deaths in 2020/21. Thereafter it will rise in line with CPI. | ### Comment | |---| | The RNRB was introduced in April 2017 to allow the family home to be passed more easily to direct descendants on death without incurring a charge to IHT. There are, however, a number of conditions that must be met in order to obtain the RNRB, which may involve redrafting an existing will. | ## ## Stamp Duty Land Tax (SDLT) surcharge A SDLT surcharge on non-UK residents purchasing residential property in England and Northern Ireland is to go ahead. The 2% surcharge is to take effect from 1 April 2021. Where contracts are exchanged before 11 March 2020 but complete or are substantially performed after 1 April 2021, transitional rules may apply. ### **Other matters** ## VAT ### E-publications The government will introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, to make it clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts. ### Tampon tax From 1 January 2021 the government will apply a zero rate of VAT to women’s sanitary products. ### Postponed accounting From 1 January 2021 postponed accounting for VAT will apply to all imports of goods, including those from the EU. | ### Comment | |---| | The postponed accounting for VAT aims to provide a boost to those VAT registered UK businesses which are integrated in international supply chains as they adapt to the UK’s new trading arrangements under Brexit. | ## Plastic Packaging Tax This will be a new tax that applies to plastic packaging produced in or imported into the UK that does not contain at least 30% recycled plastic. The tax rate will be £200 per tonne of non-compliant plastic packaging. A consultation on the design and implementation of the tax has been issued and the tax is to take effect from April 2022. **Duties** ## Alcohol and tobacco duties The duty rates remain frozen for beer, spirits, wine and made-wine, still and sparkling cider and perry. The duty rate on all tobacco products will continue to increase by 2% above RPI inflation. The duty rate on hand-rolling tobacco will increase by a further 4%. These rates will have effect from 11 March 2020. ## Fuel duty Fuel duty will be frozen for the 2020/21 tax year. ## What They Said… ‘This is the Budget of a government that gets things done.’ **Rishi Sunak, Chancellor of the Exchequer** ‘The reality is that this is a Budget that is an admission of failure – an admission that austerity has been a failed experiment.’ **Jeremy Corbyn, Leader of the Labour Party** ‘In deeply challenging times, the Chancellor has worked against the clock to deliver two Budgets in one: a first for national resilience today and a second for economic ambition tomorrow.’ **Dame Carolyn Fairbairn, Director General of the Confederation of British Industry** ‘This is a pro-small business Budget, which has delivered a high streets bonus, a series of Conservative manifesto promises to small businesses, and emergency steps to support small firms through the coronavirus outbreak.’ **Mike Cherry, National Chairman of the Federation of Small Businesses** ‘The Budget has addressed the immediate challenges facing the economy, but the Chancellor will have to do more to support businesses as they navigate changes to trading arrangements and the end of the Brexit transition period.’ **Dr Adam Marshall, Director General of the British Chambers of Commerce** **2020/21 Tax Calendar** | ### April 2020 | |---| | 5 | Last day of 2019/20 tax year. Deadline for 2019/20 ISA investments and pension contributions. Last day to make disposals using the 2019/20 CGT exemption. | | 14 | Due date for income tax for the CT61 period to 31 March 2020. | | 19 | Automatic interest is charged where PAYE tax, Student loan deductions, Class 1 NI or CIS deductions for 2019/20 are not paid by today. Penalties may also apply if any payments have been made late throughout the tax year. PAYE quarterly payments are due for small employers for the pay periods 6 January 2020 to 5 April 2020. PAYE, Student loan and CIS deductions are due for the month to 5 April 2020. Deadline for employers’ final PAYE return to be submitted online for 2019/20. | | ### May 2020 | |---| | 3 | Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 April 2020. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 May 2020. | | 31 | Deadline for forms P60 for 2019/20 to be issued to employees. | | ### June 2020 | |---| | 1 | New Advisory Fuel Rates (AFR) for company car users apply from today. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 June 2020. | | 30 | End of CT61 quarterly period. | | ### July 2020 | |---| | 5 | Deadline for reaching a PAYE Settlement Agreement for 2019/20. | | 6 | Deadline for forms P11D and P11D(b) for 2019/20 to be submitted to HMRC and copies to be issued to employees concerned. Deadline for employers to report share incentives for 2019/20. | | 14 | Due date for income tax for the CT61 period to 30 June 2020. | | 19 | Class 1A NICs due for 2019/20. PAYE, Student loan and CIS deductions due for the month to 5 July 2020. PAYE quarterly payments are due for small employers for the pay periods 6 April 2020 to 5 July 2020. | | 31 | Second payment on account 2019/20 due. | | ### August 2020 | |---| | 2 | Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 July 2020. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 August 2020. | | ### September 2020 | |---| | 1 | New Advisory Fuel Rates (AFR) for company car users apply from today. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 September 2020. | | 30 | End of CT61 quarterly period. | | ### October 2020 | |---| | 1 | Due date for payment of Corporation Tax for period ended 31 December 2019. | | 5 | Deadline for notifying HMRC of new sources of taxable income or gains or liability to the High Income Child Benefit Charge for 2019/20 if no tax return has been issued. | | 14 | Due date for income tax for the CT61 quarter to 30 September 2020. | | 19 | Tax and NICs due under a 2019/20 PAYE Settlement Agreement. PAYE, Student loan and CIS deductions are due for the month to 5 October 2020. PAYE quarterly payments are due for small employers for the pay periods 6 July 2020 to 5 October 2020. | | 31 | Deadline for submitting ‘paper’ 2019/20 self assessment returns. | | ### November 2020 | |---| | 2 | Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 October 2020. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 November 2020. | | ### December 2020 | |---| | 1 | New Advisory Fuel Rates (AFR) for company car users apply from today. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 December 2020. | | 30 | Online filing deadline for submitting 2019/20 self assessment return if you require HMRC to collect any underpaid tax by making an adjustment to your 2021/22 tax code. | | 31 | End of CT61 quarterly period. Filing date for Company Tax Return Form CT600 for period ended 31 December 2019. | | ### January 2021 | |---| | 1 | Due date for payment of corporation tax for period ended 31 March 2020. | | 14 | Due date for income tax for the CT61 quarter to 31 December 2020. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 January 2021. PAYE quarterly payments are due for small employers for the pay periods 6 October 2020 to 5 January 2021. | | 31 | Deadline for submitting your 2019/20 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2019/20 liability together with the first payment on account for 2020/21 are also due. Capital gains tax payment for 2019/20. Balancing payment – 2019/20 income tax and Class 4 NICs. Class 2 NICs also due. | | ### February 2021 | |---| | 2 | Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 January 2021. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 February 2021 | | ### March 2021 | |---| | 1 | New Advisory Fuel Rates (AFR) for company car users apply from today. | | 3 | 5% late payment penalty on any 2019/20 outstanding tax which was due on 31 January 2021 and still remains unpaid. | | 19 | PAYE, Student loan and CIS deductions are due for the month to 5 March 2021. | | 31 | End of corporation tax financial year. End of CT61 quarterly period. Filing date for Company Tax Return Form CT600 for period ended 31 March 2020. Last minute planning for tax year 2020/21 – please contact us for advice. | --- This Budget Report was prepared immediately after the Chancellor’s Budget Statement based on official press releases and supporting documentation. The Budget proposals are subject to amendment before the Finance Act receives Royal Assent. This Report is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. **Categories:** Coronavirus, News --- ### [Important IR35 update: be prepared for April 2020](https://sg-accounting.co.uk/blog/important-ir35-update-april-2020/) **Published:** October 21, 2019 **Author:** Kerry Newman **Content:** ![IR35 update April 2020](https://sg-accounting.co.uk/wp-content/uploads/2019/10/ir35-2020.jpg "ir35-2020 | SG Accounting") You will no doubt be aware of the proposed changes to IR35 (often referred to as the ‘off-payroll rules’) set to come into force from April 2020. Our aim here is to ensure you are aware of the support that we can offer and also the steps that you can take in order to ensure your IR35 status is assessed fairly from April onwards. ## The background: how did IR35 work before? The responsibility for determining whether IR35 applies to your work has always been yours. You may have asked us to review your contract and/or working practices and we subsequently would have given you our opinion on whether IR35 applied to your assignment. At SG, we primarily deal with what we consider to be ‘high-end’ professional services contractors who have specialist skills and who work on a project basis. The contracts we see will typically support this and if not, we have often suggested that you seek revisions to the contract before signing. Therefore, the vast majority of our clients are considered outside of IR35. Our view on your IR35 status is based not only on our understanding of the legislation but also the vast amount of case law from the various decisions arrived upon at tribunal (dating back to what is often considered one of the most important ‘employment status’ cases of all – Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance 1968!). ### **What’s changing?** However, from April 2020 your end-client will become responsible for determining your status. They must assess each assignment with ‘reasonable care’ and provide you with a ‘Status Determination Sheet’ that explains the reasoning behind their decision. In the event that you dispute the decision, the legislation provides for a ‘client-led disagreement process’. In short, you have to provide evidence to the contrary and your client then has 45 days to respond or change their decision and provide a new Status Determination Sheet. ## The Problems If you are considered inside IR35 from April onwards, your future invoices will be subject to tax and National Insurance in a similar way to if you were employed by your end client. Whilst it varies depending on the circumstances, for most this will mean between 20-30% additional tax liability, which will be deducted at source – with you receiving the net amount. ### **Lack of understanding** Most end-clients have little (if any) IR35 expertise. They have been told that they can use [HMRC’s CEST online tool](https://www.gov.uk/guidance/check-employment-status-for-tax), answer a series of questions about your engagement and the tool will tell them whether IR35 applies. ![HMRC CEST tool screenshot](https://sg-accounting.co.uk/wp-content/uploads/2019/10/cest.jpg "cest | SG Accounting") The tool has been designed by HMRC and is therefore weighted in their favour. It is widely considered to be fundamentally flawed and yet the decision the tool arrives at will be relied upon by your end client to determine your IR35 status. ### **Blanket assessments** We have already seen some businesses make ‘blanket assessments’ – essentially ignoring that the legislation demands they take reasonable care and simply suggesting that all of their contractors are inside IR35. We have also seen some businesses confirm they will stop using limited company contractors entirely from April 2020 with the option of leaving the role, going ‘perm’ or using an umbrella company, often the suggested alternatives. We believe this approach is very short sighted – the contracting market exists because those businesses want an agile and flexible workforce in order to deliver their projects. Paying a higher day rate for ‘top talent’ without needing to provide employment benefits is a deliberate commercial strategy. The fact that tax advantages are available for contractors has always been the reward for associated risks. In 2017, very similar rules were introduced to public sector organisations and a similar approach of blanket assessments and not using limited company contractors followed. Many either renegotiated their day rates (to compensate for the additional tax) or left and found contracts elsewhere. It wasn’t long before these organisations were forced to reconsider their approach as projects ground to a halt. We expect to see a similar cycle with the private sector roll-out. The question is how long will it take these businesses to realise the knock-on effect of their approach. ## What you should do If you are working with a client that will no longer engage with limited companies from April onwards then your choices are likely to be: - Leave; - Accept permanent employment; or - Use an umbrella company. ### **What are the pros and cons?** For the first two, you will need to assess your situation, the market and any offer on the table – clearly, if you are offered a fantastic package to join as permanent member of staff then you may decide to accept! However, it is likely that the package will represent a significant reduction in your income so that will need to viewed against the positives of employment benefits and any so-called ‘job security’. ### **Use an umbrella company to your advantage** If you decide to continue the contract but via an umbrella company, speak to us. We include the use of [SG Umbrella ](https://sg-umbrella.co.uk/)**for an additional monthly charge.** This gives you the flexibility to swap between your existing limited company and umbrella depending on the contract in place. You’ll benefit from having all of your financial affairs under ‘one roof’. We also offer some services that many others don’t – allowing you to continue making employer contributions to your current pension by way of an example. For many others, the likely issue will be that their end-client either blanket assesses all contractors as inside IR35 or carries out an individual assessment but incorrectly arrives at an inside IR35 conclusion. ## What are the next steps? Your first action should be to request the ‘Status Determination Sheet’ that each business is required to provide. Once you have this, send it to us with a copy of your latest contract and we will carry out a review. Whilst we acknowledge that HMRC’s CEST tool is flawed, for many of our clients it will still arrive at an outside of IR35 decision. This can then be provided to your end-client and the ‘client-led disagreement’ process should begin. Your client/agency may ask you to complete the tool yourself, if this is the case then you should also discuss it with us first. HMRC have said that they will stand by the decision of the tool provided the answers given are factually correct. So for many, an outside of IR35 decision should be enough to reassure the end-client. ### **Considerations** However, it is quite possible that businesses will refuse to reconsider incorrect or blanket inside IR35 assessments. The disagreement process has not been defined and we shouldn’t expect HMRC to focus their resources on ensuring end-clients comply – after all, they just want the additional tax. It is therefore vital that contractors work together to challenge incorrect decisions. If our experience of the public sector reform is anything to go by, if the end-client is unwilling to reconsider, many will look elsewhere to find work considered outside of IR35 or seek to renegotiate pay terms in order to compensate. It would be far easier to simply do it right in the first place! Caution should be exercised in accepting an inside IR35 decision from an existing client where you have previously operated outside of IR35. HMRC have said that they ‘have no plans’ to open retrospective enquiries into prior years but HMRC’s behaviour in recent years suggests this shouldn’t be relied upon. ## Consider Tax Investigation Insurance We have negotiated a ‘Tax Investigation Insurance’ policy with one of the UK’s leading IR35 defence specialists – Markel Tax. For £10+VAT per month, you can protect yourself against any of the possible defence costs of a future IR35 enquiry. By its very nature, IR35 is a complex and often subjective issue and therefore the time and costs of an HMRC enquiry can be significant. Speak to us if you want further information. ## To conclude… In summary, we have always been behind the concept of any genuine IR35 reform that would correctly tax those working in the same way as employees. However, by pushing the burden onto UK businesses, who typically have no expertise with IR35 and then telling them they’ll pay the tax liability if they get it wrong, we can expect a very risk adverse approach from some end-clients. Contractors shouldn’t allow that approach to cost them 20-30% of their income unfairly. It is important to remember that these new rules do not change how IR35 should be assessed nor do they supersede the 50 years of case law on employment vs self-employment. If our opinion was that you were outside of IR35 when we reviewed your contract, it is very likely that will still be the case now. Don’t allow your client to decide otherwise without following the process set out in the legislation. ## Need a hand? We can help. For all enquiries and questions, [contact us](/contact/). We will be happy to discuss your options in further detail. **Categories:** IR35, News **Tags:** IR35 - Guide, Switching - Service --- ### [IR35 in the private sector: draft legislation announced](https://sg-accounting.co.uk/blog/ir35-in-the-private-sector-draft-legislation-announced/) **Published:** July 18, 2019 **Author:** Kerry Newman **Content:** Contractors’ questions on the new ‘off payroll’ working reforms are beginning to be answered, as the government announces draft legislation for the Finance Bill 2019-2020. IR35 in the private sector, as it is commonly referred to, is due to take effect from 6th April 2020. ![HMRC (HM Revenue & Customs) letterhead](https://sg-accounting.co.uk/wp-content/uploads/2019/07/hmrc.jpg "hmrc | SG Accounting") It is important to note that this is not entirely new legislation but an extension of the current public sector legislation, with some modifications for the private sector. ## What are the main points to be aware of for IR35 in the private sector? 1. The end-client becomes responsible for making the decision as to whether the engagement falls within IR35. If they decide it does, the contractor is deemed to be an employee for tax purposes and tax is taken at source. 2. The new proposals apply to the private sector and the third sector i.e. charities, voluntary and community groups, social enterprises, mutual and cooperatives. 3. Only medium and large organisations, as defined by the Companies Act (2006), are included in the proposals. Small companies are exempt. According to the Companies Act (2006), a small company is one which satisfies two or more of the following criteria in one year: 1. Turnover of no more than £10.2 million 2. Balance sheet total of no more than £5.1 million 3. No more than 50 employees 4. Contractors working with ‘small companies’ retain the power to determine their own IR35 status. 5. The end-client must produce an SDS – Status Determination Sheet. This is a written statement which provides a conclusion to whether the engagement falls within IR35 and the reasoning for this decision. 6. The end-client must ensure reasonable care is taken in providing the SDS. 7. The end-client must provide a copy of the SDS to the Personal Service Company or PSC. 8. The end-client must also pass the SDS onto the party directly below them in the contractual chain. This becomes particularly complicated if there are several agencies involved. 9. The draft legislation states the agency immediately above the PSC in the contractual chain and who holds the SDS is deemed to be the Fee Payer – the party who is responsible for ensuring the correct tax is applied to the PSC 10. End-clients are responsible for implementing a disagreement process. There is no guidance on what this should involve, only that the end-client has 45 days to respond. If the end-client fails to respond within the 45 days, they are automatically assigned the position of Fee Payer ## Why are the changes coming in? The government argues that the changes are necessary so that people doing the same job, for the same employer, pay the same employment taxes. Interestingly, the government does not expect any major economic impacts to occur due to the proposed changes, but research by FCSA (Freelancer and Contractor Association) predicts that around 13% or 78,000 individuals will leave the industry. ![IR35 in the private sector](https://sg-accounting.co.uk/wp-content/uploads/2019/07/exit.jpg "exit | SG Accounting") If this is true, many organisations could find themselves losing skilled contractors, which potentially puts many projects at risk. ## Our view We are disappointed that the government has pressed ahead with plans to implement the new IR35 rules, especially given the issues that were experienced in the public sector roll-out and also at such a crucial economic time for the country. In the public sector, many organisations adopted a ‘blanket assessment’ on all contractor roles, which seemed to ignore the ‘reasonable care’ approach, which was required of them. Many of our clients who were affected with their contracts subsequently negotiated higher day rates to compensate them or secured other ‘outside of IR35’ work elsewhere. This meant that many public sector organisations found themselves with a skills shortage and the risk of projects being delayed. Since then, we have found many organisations adopting a more commercial approach with regards to IR35 status and genuinely working with their contractors to ensure working arrangements are in line with an outside of IR35 position. We think a similar pattern will emerge in the private sector. Many private sector businesses have started to communicate plans with their flexible workforces and variety of approaches have become common knowledge. Notably, HSBC and Morgan Stanley have made clear their plans to reduce their contractor workforces by either terminating contracts or offering permanent positions. RBS on the other hand have said they will collaborate with contractors to ensure working practices are sufficiently robust to support outside of IR35 status where appropriate. Time will tell how the rest of the private sector deal with the reforms. ## What should you do? For current contracts, it remains very much business as usual. However, for future extensions or new contracts, your end client will need to tell you whether the role is considered to be outside of IR35. The draft legislation includes some detail on a disagreement process – we would urge you to ensure that your client has fairly assessed the role and, in cases where an inside of IR35 status has been arrived at you request an SDS. Although the process for challenging IR35 decisions is not yet clear, we will be monitoring this and will be happy to support you where ‘reasonable care’ has not been used in coming to that conclusion. ![Contractor signing contract](https://sg-accounting.co.uk/wp-content/uploads/2019/07/contracts.jpg "contracts | SG Accounting") Some agencies and end clients have been preparing for this and advising in advance on the likelihood of a contractor being “caught by IR35” from April 2020 and suggesting using an umbrella company. It is important to know that you can still use your Ltd company and it may still be the best way of operating even if caught by IR35 in the new rules, as a subsequent contract may not be. Here at SG our sister company, SG Umbrella offers Umbrella services for an additional monthly fee. [Click here](https://sg-umbrella.co.uk/) for further information on SG Umbrella or call us to find out what is involved in working with an umbrella company. ## Make your views count It’s time to have your voice heard! The government has asked anyone who may be impacted by the draft legislation to give their feedback. Hurry though as you only have until 5th September to do it. We will be making our views known, and we’ll keep you updated on any news relating to the draft legislation. If you feel that you’ll be affected in any way by the proposed changes, speak to us on [01962 867550](tel:01962%20867550). **Categories:** Guides, IR35, News **Tags:** IR35 - Guide, Switching - Service --- ### [The £85,000 FSCS protection and how it applies to your ltd company bank account](https://sg-accounting.co.uk/blog/85000-fscs-protection/) **Published:** May 16, 2019 **Author:** Kerry Newman **Content:** **With the collapse of Northern Rock, Bradford & Bingley, Icelandic banks and others now over 10 years ago, savers should still be thinking “Is my money safe?”** As your business grows, it is likely the cash you hold in the company bank account will grow too. Any cash deposited with a bank or building society that is authorised by the Prudential Regulation Authority benefits from the Financial Services Compensation Scheme should that bank or building society ever fail. You can find out if your bank is covered [here](https://register.fca.org.uk/s/). ## What is the compensation limit? The compensation limit is £85,000 per bank or building society. If you have money in multiple accounts with banks that are part of the same banking group, they are treated as one bank. This means that the compensation limit applies to the total amount you hold across all these accounts, not to each separate account. The limit doubles to £170,000 for joint accounts. You also get temporary protection on high balances up to £1 million. This covers life events such as selling your home, inheritances, redundancy and insurance payouts where your cash deposits may increase. You get cover on these for six months if your bank or building society goes bust. There is more information [here](https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/) on what constitutes a life event. ![Contractor accountant in suit and tie with thumbs up](https://sg-accounting.co.uk/wp-content/uploads/2019/05/adult-agent-approval-684385.jpg "adult-agent-approval-684385 | SG Accounting") ## How do I get FSCS protection? You do not need to do anything to get this protection, you are automatically covered. If you hold more than £85,000 with one banking group then you may want to deposit this money across different banking groups so all of your cash is protected. You may even consider splitting your cash if you hold under £85,000 as if your bank went bust your cash may be inaccessible for a period of time. Also note that is it not only cash that is protected by the Financial Services Compensation Scheme, it can also cover things such as pensions, investments, insurance and mortgages. More information can be found on the FSCS website [here](https://www.fscs.org.uk/what-we-cover/). Feel free to give one of our expert accountants a call for further advice and guidance. **Categories:** Finance, Guides --- ### [Upskilling and CPD for contractors](https://sg-accounting.co.uk/blog/upskilling-and-cpd-for-contractors/) **Published:** June 25, 2019 **Author:** Kerry Newman **Content:** As an independent contractor the majority of your time is spent on client work (as this is what pays the bills!) but as more people choose to become contractors (figures for 2018 show that there around 1.77 million people are working as contractors), it’s important that you keep your skills current while also planning where you want to go with your career and how you are going to do that. At college or university, you had an abundance of time to study, but finding the time to study while you’re working can be difficult. However, if you are meticulous with your planning and organisation and are willing to put in some late nights or early mornings you can top-up your skills or acquire new ones without studying full-time. Also, if you are a member of a professional organisation, such as the Institute of Engineering and Technology it may be a requirement for you to complete a certain amount of CPD – Continuous Professional Development each year. Upskilling and CPD don’t necessarily mean that you have to return to the classroom, there are so many options available, some of these include: **Conferences** Thousands of conferences are held each year in the UK and many more across the globe covering everything from accounting, IT, engineering to gaming. Conferences are an amazing way to pick up new industry trends, to try out new technologies and to meet up with colleagues and peers. Some trade conferences also offer points for attendees which can go towards your CPD. ![Conference room full of IT contractors.](https://sg-accounting.co.uk/wp-content/uploads/2019/06/conferenceforITcontractors.jpg "conferenceforITcontractors | SG Accounting") **Trade magazines** Trade magazines may be something that drops through your letterbox each month or quarter and which you flick through quickly. But trade magazines are an amazing source of news such as emerging trends, techniques and technology. So, the next time you get one, take some time to read it in depth. **E-learning** E-learning is based around distance learning and involves learning through online courses, presentations, seminars, eBooks etc. There is a huge wealth of distance learning courses available across multiple disciples. Some are offered by recognised learning institutions such as colleges and universities, but there’s also a lot which is offered by unrecognised institutions so it’s important you carefully research courses and their providers to find one that is right for you. **Podcasts** If you’re not familiar with podcasts, they are a digital audio file which can be downloaded and listened to using multiple devices. Podcasts have become incredibly popular in the last couple of years because they can be listened to at any time and anywhere, like on your lunch break, on your commute or even at the gym. ![Contractor listening to podcast on headphones.](https://sg-accounting.co.uk/wp-content/uploads/2019/06/manlisteningtopodcasts.jpg "manlisteningtopodcasts | SG Accounting") If there’s an industry expert who you particularly admire, check to see if they have a podcast. Most of the time they do! **University** If you are looking to totally change your career path, it may be that a degree is the only way to go. If so, there are other options to studying full-time, such as part-time degree courses which can be done alongside work such as in the evenings or at weekends. Most universities offer part-time or flexible degrees and so does the **[Open University](https://www.open.ac.uk/)**. As an end note another benefit of upskilling and CPD is that you may be able to claim the cost of this as a business expense which can be offset against your Corporation Tax bill. It’s a double win! ***We work with contractors at various stages of their contracting career, so whether you’re looking for your first accountant or are wanting to change accountants, our team has the knowledge and expertise to support you at every step.*** ***To find out about our*** [***accounting packages***](https://sg-accounting.co.uk/prices/) ***or to speak to one of our Directors, give us a call on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Guides, News, Running your business **Tags:** Switching - Service --- ### [Harnessing the power of client testimonials](https://sg-accounting.co.uk/blog/harnessing-the-power-of-client-testimonials/) **Published:** July 30, 2019 **Author:** Kerry Newman **Content:** As well as having a killer CV and dazzling references another way to get work as a contractor is having client testimonials on your website or social profiles. A client testimonial is a mini case study which is provided by someone you’ve worked with and it discusses the benefits of your services. If you’ve never considered asking a client for a testimonial, here are some reasons why you should be: 1. You can talk all day about how great you are, but having others say it for you adds credibility to your claims 2. Testimonials can help diminish a client’s concerns about bringing in external support to work on a project 3. Client testimonials are an important marketing tool in selling your services If this doesn’t sell you on asking for client testimonials, this should: research published by [BigCommerce](https://www.bigcommerce.co.uk/blog/) shows that 92% of shoppers read online reviews and testimonials in the purchase decision stage. And, 72% stated that positive reviews make them trust a business more! ![Business people with speech bubble above head.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/ClientTestimonial.jpg "ClientTestimonial | SG Accounting") **How to structure a client testimonial** Client testimonials can take many different forms, the most commonly used ones are: - Quotes – a statement of your services is provided along with the name of the individual and business who provided the quote - Video – if your client isn’t camera shy, they may be willing to be filmed talking about the benefits of using your contracting services - Audio – gathering an audio copy of a client testimonial takes less work than a video testimonial – they can be created using a smartphone with a good microphone - Case studies – start with an overview of the business’s problems and go into detail on of your processes and finish off with a statement of the results you achieved **How to use client testimonials** Where some people go wrong is hiding their testimonials in places which are hard to find. Amazing client feedback is something you should not be embarrassed to show off so proudly display it on your website’s homepage or even think about creating a dedicated webpage for them. As well as displaying them on your website, you can also use client testimonials on: - Social profiles; LinkedIn has a section called ‘Recommendations’ where you can ask connections you’ve worked with to leave feedback on the work you did for them. Facebook’s business page also provides customers with the option to leave a review - Promotional materials: if you produce a range of marketing materials such as leaflets, brochures or videos to promote your contracting business you can build testimonials into the content - Presentations: getting work directly with a client may involve you pitching for the business. If you’re tasked with making a presentation you can include a range of client testimonials into the pitch ***Talking about client testimonials, you can read a selection of our glowing testimonials*** [***here***](https://sg-accounting.co.uk/)***. Alternatively, if you’re interested to hear how we can support you through your contracting career, send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/) ***or speak to one of our Directors on 01962 867550.*** **Categories:** Guides, New to contracting --- ### [Strategies to generate leads as an IT Contractor](https://sg-accounting.co.uk/blog/strategies-to-generate-leads-as-an-it-contractor/) **Published:** May 11, 2023 **Author:** Kerry Newman **Content:** ## **Strategies to generate leads as an IT Contractor** IT contractors often rely on recruitment agencies to secure work due to convenience and ease of access to job opportunities. However, marketing your contracting business can open doors for clients to approach you directly. This not only saves you looking for clients but also cuts out the agency, saving your client the agency costs and giving you more control over contract terms and day rates. It can be a daunting task to generate leads on your own, however it’s not as difficult as it sounds. Here are some of the best strategies for you to consider implementing. ## **Build Your Own Website** Why not distinguish yourself from other IT contractors by going beyond a traditional CV and instead creating your own website? This is an excellent way to showcase your skills, experience, and past projects. It’s also relatively affordable, and with the right knowledge, you can have your website up and running within a day or two. If you’ve also already set up a Limited Company or are thinking about doing so, having a website can increase your credibility, and show potential clients that you’re serious about your career as an IT contractor. ## **Make Good Use of Social Media** It is essential to harness the power of social media, particularly LinkedIn, which is the largest B2B social media platform. Many businesses advertise contract roles on LinkedIn, making it an ideal platform to find potential opportunities. To make your profile stand out, be sure to include: - A professional profile picture - A headline that clearly defines your expertise as an IT contractor - A comprehensive list of projects you’ve worked on - A compelling summary highlighting why companies should choose you over other IT contractors ## **Create Profiles on Job Sites** When registering for contractor job sites, take the time to detail your skills, experience, and qualifications and specify the types of roles you’re interested in. Remember, it’s not only recruiters who use these platforms; hiring managers also pay to access their CV databases. Some recommended job sites for contractors include; [Indeed](https://uk.indeed.com/), [CW Jobs](https://www.cwjobs.co.uk/), [Monster](https://www.monster.com/resume/), [OnlyContractJobs](https://www.onlycontractjobs.com/), [Reed](https://www.reed.co.uk/), [itjobswatch](https://www.itjobswatch.co.uk/) (for IT contracting roles), and [Jobserve](https://jobserve.com/gb/en/Job-Search/) (for IT and engineering roles). ## **Network, Network, Network** Networking, both online and in-person, is a valuable way to raise your professional profile, expand your circle of connections, and meet like-minded IT contractors. Explore in-person meetups on platforms like [Eventbrite](https://www.eventbrite.co.uk/) and business forums related to your industry. Alternatively, engage in online networking by joining Facebook or LinkedIn groups, or participating in Twitter chats. By joining LinkedIn groups you’ll be able to widen your network by linking with other members of the group. It’s important not to be discouraged if you don’t get enquiries straight away as it often takes time to build relationships and trust. Just remember that it will all be worth it in the long run! If you’ve already set up a Limited Company or you’re considering doing so, through the use of a contractor accountant, they can also point you in the direction where their other clients find the majority of their work at that particular time. ## **Request Referrals** If you have already successfully completed some projects and have established a network of IT contractor friends, consider referring roles to each other when you lack the capacity to take them on yourself. Additionally, if you had a positive experience with a client, why not ask them to refer you to their friends and colleagues? It’s always worth asking! ## **How SG Accounting can help** If you’re new to contracting and require the assistance of an experienced contractor accountant, or if you’re considering switching accountants, [click here](https://sg-accounting.co.uk/prices/) to explore our all-inclusive monthly accounting packages. We can set up a Limited Company for you, and provide you with the expertise support and advice to help you succeed as an IT contractor. Alternatively, you can contact us on 01962 867550 or [get in touch](https://sg-accounting.co.uk/contact/), and we’ll be glad to assist you. Note: All the information and advice in this blog post was correct at the time of writing. **Categories:** IT Contractor, New to contracting, Running your business **Tags:** Kerry Newman --- ### [SG Accounting’s FCSA accreditation renewal 2025](https://sg-accounting.co.uk/blog/sg-accounting-is-fcsa-accredited-for-another-year/) **Published:** April 10, 2025 **Author:** Kerry Newman **Content:** ### The whole team here at SG Accounting are proud to announce that our FCSA accreditation has been renewed for yet another year! ## How do you become FCSA accredited? To maintain our status as an accredited FCSA member, we undergo a rigorous, independent annual assessment covering all aspects of our business; including our services, operations, policies, and processes. This thorough review ensures we continue to meet the FCSA’s high standards of compliance. [You can view our accreditation here](https://www.fcsa.org.uk/fcsa-member/sg-accounting-sg-umbrella/). **Head of SG Accounting Kerry Newman comments** *“SG Accounting thoroughly deserves it’s FCSA accreditation renewal for another year, as the team work incredibly hard to ensure we offer an outstanding level of service to our clients, and this is further demonstrated by our ability to achieve the high standards of the FCSA assessment for another year running!”* ## What does it mean to be FCSA accredited? Accreditation is only awarded once you’ve demonstrated your compliance of FCSA’s high standards, and that we’re acting both professionally and ethically with the UK’s tax, employment and regulatory laws. A copy of our audit report is also shared with HMRC, as proof of our compliance is required annually. We’re so proud to be able to demonstrate our high standards of compliance within the professional employment sector for another year running, and strongly advise contractors and small business owners to ensure they work exclusively with FCSA accredited providers only. ## SG Accounting – helping you run your business confidently and compliantly SG Accounting is run by experienced and independent contractor and small business accountants, who know the needs of business owners like the back of their hands. They can advise you on set-up, help you make the most tax -efficient decisions and, help with crypto, buy-to-let or any other business interests. [Get in touch for more information on how we can help you reach your business goals](https://sg-accounting.co.uk/contact/). **Categories:** News **Tags:** Kerry Newman --- ### [SG Accounting is FCSA accredited for another year running](https://sg-accounting.co.uk/blog/sg-accounting-is-fcsa-accredited-for-another-year-running/) **Published:** June 20, 2024 **Author:** Jen Winslow **Content:** Here at SG Accounting we’re delighted to announce that our FCSA accreditation has been renewed for another year. To become an accredited member we annually have to undertake an independent and rigorous assessment of all our business services, operations, policies and processes, which are all examined to ensure we’re complying with the FCSA’s high compliance standards.[ You can view our accreditation here.](https://www.fcsa.org.uk/fcsa-member/sg-accounting-sg-umbrella/) ## **Head of SG Accounting Kerry Newman comments** *“I am delighted to announce that the SG Accounting team has renewed its FCSA accreditation for a further year. The team work incredibly hard to ensure we offer an outstanding level of service to our clients, and this is further demonstrated by our ability to achieve the high standards of the FCSA assessment!”* ## **What does is mean to be FCSA accredited?** By having accreditation we’re sending our clients and recruitment businesses a clear message that we adhere to the highest standards set by the FCSA, and that we’re acting both professionally and ethically within the UK tax, employment, and regulatory laws. HMRC also receive a copy of the audit report, as we are required to prove our compliance annually. We’re incredibly proud of our ability to demonstrate the high standard of compliance within the professional employment sector, and strongly encourage all contractors to ensure they’re working with FCSA accredited providers only. ## **SG Accounting – helping you run your business confidently and compliantly** SG Accounting is run by experienced and independent contractor and small business accountants, who know the needs of business owners like the back of their hands. They can advise you on set-up, help you make the most tax -efficient decisions and, help with crypto, buy-to-let or any other business interests. [Get in touch for more information on how we can help you reach your business goals](https://sg-accounting.co.uk/contact/). **Categories:** News --- ### [What to Do If You Can’t Pay HMRC: Expert Guidance from SG Accounting](https://sg-accounting.co.uk/blog/what-to-do-if-you-cant-pay-hmrc-expert-guidance-from-sg-accounting/) **Published:** November 19, 2025 **Author:** Dean Lacey **Content:** We know that from time-to-time everyone can experience uncertainty surrounding their finances, and that this time of year in the lead up to Christmas and tax return season can amplify those worries. If you're struggling with balancing your business' finances and are concerned where to turn for support or guidance, SG Accounting is here to help. In this blog we help steer you in the right direction. You are not alone, we're here to help and can assist you in getting the support you need. ## Contents ## ## Your Client Director is here for you First and foremost, your Client Director is always here for you. Please know that they have spoken to numerous other clients about their financial situations and have been able to offer guidance and support on where to turn next. Whilst it can seem easier to bury your head in the sand or avoid talking about it, the best course of action is to get it out in the open and seek help. We strongly urge anyone who finds themselves in this position to get in touch with their Client Director and let us help put a plan together. Please know that we do this without judgement and are here to help you. ### ## Concerns over how HMRC will react A common misconception about HMRC is that they are harsh enforcers who will demand immediate payment if you disclose that you owe money, regardless of your individual circumstances. This is a complete myth, and that with the right communication and visibility, HMRC deal with each case individually and compassionately. They're able to look at your circumstances and potentially offer a payment plan that suits both yourself and them, so there is light at the end of the tunnel. Please note that your Client Director cannot answer specific questions regarding your circumstances or speak to HMRC on your behalf. Whilst they are there to help you understand your situation and what you need to do, they do not have authorisation to discuss your finances with HMRC. ### ## Your options if you're unable to pay If after speaking with HMRC you feel as though the option they've set out for you is still unachievable, you can liquidate your company through Creditor's Voluntary Liquidation (CVL). You'd need to appoint an insolvency practitioner, who'd effectively become the middleman between your company and HMRC, and they work by assisting in managing your debt and ultimately dissolving your company. Your Client Director can put you in touch with a trusted insolvency practitioner. It's important to remember that this process should be considered a last resort, as it may impact your eligibility for future directorships. You may also have other options dependent on your circumstances, and we'd advise speaking with your Client Director. ### ## Steps to take 1\. Before you do anything else, speak to your Client Director. They can help build a clear picture of what needs to be done, so you have a complete understanding of your situation and the steps you need to take. 2\. Speak to HMRC directly, you can [find all of their phone numbers here](https://www.gov.uk/find-hmrc-contacts/payment-problems-enquiries). The more information and clarity you're able to provide them with, the more options they'll be able to give you, such as setting up a **Time to Pay Plan.** They're open Monday to Friday, 8am to 6pm and are closed weekends and bank holidays. When you call, ensure you have the following information ready (your Client Director can help you prepare this information): - Your Unique Taxpayer Reference (UTR) or tax reference number - Details of the amount you owe and why you can't pay - How much you can pay now and how long you need to pay the rest - Your income and expenditure details (for individuals/self-employed) 3\. If you feel like the options provided by HMRC are out of your reach, consider company liquidation. Ask your Client Director for more information. 4\. Ensure you're taking some time to look after yourself. Financial issues can be incredibly stressful, and the impact they can have not only on your professional life but also your personal life can become overwhelming. Remember that your Client Director is always here to offer guidance and a listening ear, but if you're struggling with your mental health [Samaritans are always there to listen](https://www.samaritans.org/how-we-can-help/contact-samaritan/). You're able to call them directly on **116123**, email them at <jo@samaritans.org>, [write a letter](https://www.samaritans.org/how-we-can-help/contact-samaritan/write-letter/), or [speak to a Samaritan face-to-face](https://www.samaritans.org/how-we-can-help/contact-samaritan/visit-us-branch/). ## ## Help is always available, no matter what Never feel you must face these challenges alone or hope they'll resolve themselves. Many of our clients have navigated similar situations, and while the outcome may not have matched their original expectations, there is always a path forward. With the right guidance and support, [we're here to help you take the next steps](https://sg-accounting.co.uk/contact/). Dean Lacey Client Director Dean joined SG back in December 2023, and is FCCA qualified. Specialising in contractor accounting since 2010, he particularly enjoys building client confidence in managing their own tax affairs, and building up their businesses. [See Full Bio](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/dean-lacey/) [LinkedIn](https://www.linkedin.com/in/dean-lacey-69665065) **Categories:** limited company, News, Running your business, Tax, VAT **Tags:** Dean Lacey --- ### [Business Bank Account FAQs](https://sg-accounting.co.uk/blog/business-bank-account-faqs/) **Published:** July 26, 2023 **Author:** Kerry Newman **Content:** ## **What’s the difference between my personal bank account and a business bank account?** When you set up a business it’s a great idea to get a separate business bank account set up. Your business and personal affairs, including finances, are kept completely separate, and having a business bank account allows this process to be much smoother. It also makes your accountant’s job much easier, as they’re able to distinguish business and personal transactions. ## **Can my current bank open a business bank account?** Most banks will be able to set up a business bank account. In the past we have found many of the high street banks take a very long time to open one. For this reason we have researched a number of banks that we know offer a very smooth bank account opening process. ## **How do you know which business bank account is right for you?** It depends on what you’re looking for, and what each bank can offer you. Some may offer free set up, no charges on transactions for X number of months, a cash back incentive for choosing them, or mobile and online banking. ## **Which bank accounts can you use with SG Accounting?** We have researched a number of banks for small businesses and have close working relationships with [Tide](https://www.tide.co/) and [Zempler](https://www.zemplerbank.com/landing/business/go/generic/) in order to make the application process easier…some are even able to offer preferential deals for new businesses. We’re also more than happy working with other banks, so if you’re already using a different bank, simply let us know. Many of our clients have more than one account, so speak to our team about how this can benefit you. ## **How do they work with FreeAgent or other software?** Tide and Zempler integrate automatically with FreeAgent and many other software providers in real-time, meaning what you see is 100% up to date. The integration is seamless, so there’s no waiting around for updates, or unexpected mistakes. If you use a different business banking partner, simply ask us how they integrate with FreeAgent. ## **Why are two business accounts better than one?** Having two accounts allows you to keep your tax in one, and the rest of your day to day money in the other. It also allows you to have a back-up from an Financial Services Compensation Scheme point of view, should there be a problem, so you’ll never be left high and dry. ## **What’s the best way to get started?** Give our team a call on 01962 867550, and we’ll talk through your options with you. Whether setting up a new business or maybe you have a property portfolio, or are considering another type of investment, either way we’ll be able to discuss and give you some personalised advice based on our years of experience. ## **Have more questions? We’ll have the answers** If there’s anything else you want to ask or to simply chat through your options, [please do get in touch](https://sg-accounting.co.uk/contact/) or give us a call. We look forward to hearing from you! **Categories:** Business Bank Accounts **Tags:** Kerry Newman --- ### [The importance of a work life balance for contractors](https://sg-accounting.co.uk/blog/importance-of-work-life-balance-contractors/) **Published:** May 11, 2018 **Author:** Kerry Newman **Content:** The reason why some choose to become a self-employed contractor is that they want to achieve a better work-life balance. They are tired of being told when and where they must work. The idea behind becoming a contractor is that they have greater control and flexibility over the roles they take on. Contracting can offer this flexibility, but many may find themselves working more hours than they did as an employee. Plus, if you have the option of being able to work from home, the line between your work life and home life can easily become blurred. This article discusses the importance of a work life balance and offers practical tips on how to achieve this. ### **The relationship between work and stress** Research carried by the mental health charity, [MIND](https://www.mind.org.uk/news-campaigns/news/work-is-biggest-cause-of-stress-in-peoples-lives/#.WvLQ84gvzIU), found that the biggest cause of stress in adults is work. In fact, one in three adults citied that their work life was very stressful. The research also found that one in five people take a sick day because of stress. Self-employed contractors do not get paid sick-pay, so for every day you take off sick, you are losing out on earnings. Put a stop to stress with our tips for creating a better work life balance: ## **Put away the tech** ![A contractor using their work phone at home next to a magazine and a coffee set](https://sg-accounting.co.uk/wp-content/uploads/2018/05/phone-at-home.jpg "phone at home | SG Accounting") Smartphones are a big part of our culture. Our fascination with constantly being connected to the online world can mean that work is never far away from our thoughts. To avoid being tempted to check messages every time the phone ‘pings’, consider having a separate phone that you solely use for work. Once the work day is over you can switch it off and enjoy your down time. Plus, don’t forget that mobile phone costs (as long as the contract is in your limited company’s name) is a legitimate business expense. For details of other legitimate business expenses, see our article ‘[Ask an Expert: What you need to know about expenses’](https://sg-accounting.co.uk/blog/ask-an-expert-expenses/). ## **Switch off at home** ![Woman curled up in a cosy corner with a beverage. Looks very chilled out.](https://sg-accounting.co.uk/wp-content/uploads/2018/05/relaxed-at-home.jpg "relaxed at home | SG Accounting") It’s highly likely that you will spend most of your time on-site at the client’s premises. However, you may set up a home office for admin tasks or to occasionally work from home. If you have such a space, it’s important not to get into the habit of doing a few hours of work on the night or at the weekend. Once, your work day is over, close the office door or put your laptop away and take some ‘chill’ time. ## **Become bendy** ![A woman poised in a yoga pose on a pink yoga mat](https://sg-accounting.co.uk/wp-content/uploads/2018/05/balance-exercise.jpg "balance exercise | SG Accounting") It’s well known that exercise is fantastic for our overall health and well-being. Partaking in exercise also has a direct effect on beating stress. Some of the best exercises for stress relief are Yoga and Pilates. A big part of Yoga and Pilates is deep-breathing. According to the American Institute of Stress, spending 20 minutes a day deep breathing can reduce stress and anxiety as it increases oxygen to the brain which promotes a state of calmness. So, if you’re looking to kick stress to the kerb, grab your exercise mat and head down to your local Yoga or Pilates class. ***For over 20 years we have been providing contractors with a fully advised accountancy and taxation services. Read what*** [***others have to say***](https://sg-accounting.co.uk/about-sg-accounting/reviews-and-testimonials/) ***about our services and how we make their lives as a contractor that bit easier.*** **Categories:** New to contracting, Running your business --- ### [IR35 April 2021 – a reminder of what’s happening](https://sg-accounting.co.uk/blog/ir35-april-2021-a-reminder-of-whats-happening/) **Published:** October 13, 2020 **Author:** Kerry Newman **Content:** Remember when IR35 was the biggest thing to worry about? It feels like a life time ago now, and you may have even forgotten, given everything else that’s been going on. But whilst it may seem like it’s taken a back seat for the government, it’s still very much at the forefront of our accountant’s minds. So what is changing, when is it proposed to happen and what do you need to do to prepare? In this blog we answer all those questions, keeping it nice and simple, so you can get back to focusing on the important things. **First things first, what’s going to change?** The rules for how to determine IR35 status aren’t changing, and they didn’t for the Public sector either. The only thing changing is the entity in charge of making the determination. Whoever makes the decision is expected to use reasonable care in making the determination, and judge each contract on its own merits.This therefore means: - Your IR35 status determination will lie with the end-hirer - The end-hirer will bear the tax risk should they determine your IR35 status incorrectly - The rules surrounding how your IR35 status is determined aren’t changing, therefore if you’re working on a Private contract and it’s legitimately ‘outside’ of IR35 come April 6th, you should be considered ‘outside’ by HMRC once the new rules take hold **How might this impact the contractor population?** Some end-hirers may be nervous about bearing the tax implications should they incorrectly determine a contractor’s IR35 status, and may therefore decide to only employ contractors who are using Umbrella companies, rather than being Limited (as Umbrella companies pay tax, PAYE and National Insurance Contributions at source). End-hirers may also make a blanket decision on their contractors they use and deem they’re all ‘inside’ IR35, so as to not possibly be caught out. **What are the possible implications?** Limited Company contractors who are genuinely ‘outside’ IR35 and incorrectly classed will be made to work on a PAYE basis, and as a result lose out on the tax benefits which come with being truly ‘outside’. **How should the end-hirer determine your status?** There are three key tests which HMRC have laid out to determine your status, all of which the end-hirer must use ‘reasonable care’ when assessing. These tests, often referred to as ‘MSC’ are: **Mutuality of obligation:** Relates to the extent you’re obliged to complete work that’s offered to you, or whether the client is obliged to offer you extra work that’s outside of the contract. If your working obligations are clearly set out in the contract and work is limited to those obligations, this strongly suggests that IR35 does not apply. **Substitution:** Are you able to send someone else in your place to complete your work? If so, even for a short period this demonstrates that your contract is ‘outside’ IR35. **Control:** The level of control your client has over your working practices can impact your status. The more control you have as the contractor when it comes to how, when and where you work, the more likely you’ll be found ‘outside’. **What does ‘reasonable care’ actually mean?** You client must be able to demonstrate that they have used ‘reasonable care’ when determining your IR35 status. Sadly many clients have very little knowledge when it comes to IR35, and therefore may make blanket status decisions without taking MSC into consideration. It is unclear how HMRC is likely to police the ‘reasonable care’ taken. **What about CEST?** Some clients use the [CEST online tool](https://www.gov.uk/guidance/check-employment-status-for-tax) (Check Employment Status for Tax), whereby they answer a series of questions about the contactors’ engagement, and the tool tells them whether IR35 applies. As CEST was designed by HMRC, contractors understandably aren’t keen, and argue it’s weighted in HMRC’s favour. It’s widely considered fundamentally flawed (even HMRC investigations have contradicted their own CEST tool), yet its decision is what your client will base their final IR35 status outcome on. **What can you do to prepare?** Whilst April 2021 may seem like a little way off yet, there are a few things you can do now to ensure you’re ready for the change: **Know what to do if you don’t agree with your client’s decision –** If your first contract post April 2021 is decided to be ‘inside IR35 then you’ll want to be ready to challenge that decision. You’re able to process a ‘client-led disagreement’ which allows you to present your evidence to the client, who’ll then have 45 days to respond to your appeal. [Download our IR35 Survival Guide](https://sg-accounting.co.uk/guides/your-ir35-survival-guide/) for more information on this, and also what to do if your client refuses your appeal. **Find a specialist accountant –** if you haven’t already done so, make this your number one priority. Most accountants will have a broad understanding of what IR35 is, but only specialists will have the knowledge and experience to ensure they’re doing everything they can to support you correctly. And if your status is incorrectly determined, a specialist accountant will be on hand to help you challenge it. Take a look at our dedicated IR35 page for more information on the services we offer Limited Company contractors. **Find a solution that works for you, no matter your status –** If you’re found ‘inside’ but want or need to continue working on your contract, you’ll have to pay PAYE, National Insurance Contributions and Tax at source. So how do you go about that when you’re a Limited Company contractor? At SG Accounting our sister company, [SG Umbrella](https://sg-umbrella.co.uk/contact/), provides contractors in this exact position with umbrella services for a monthly fee. For more information about the services we offer contractors, or to simply have your IR35 questions answered by one of our director-level accountants, [get in touch](https://sg-accounting.co.uk/contact/) with the SG Accounting team today. **Categories:** IR35, News **Tags:** IR35 --- ### [IR35 April 2020 – essential FAQs](https://sg-accounting.co.uk/blog/ir35-april-2020-essential-faqs/) **Published:** February 17, 2020 **Author:** Kerry Newman **Content:** With IR35 changes in the private sector just around the corner, find out here exactly what is happening, how the change might impact you and what action can be taken to protect your contracts and take home pay. ## What’s changing? From April 2020, the rules around IR35 in the Private Sector will be bought in line with those for the Public Sector, with the end hirer making the IR35 determination across the board and bearing the tax risk if they get it wrong. ## What’s not changing? The rules used to determine IR35 status are not changing, so in theory, if you are legitimately contracting through as Limited Company now, then you should be able to continue to do so post-April. If your contract is in the Public Sector, the end hirer is already responsible for assessing IR35 status, and this will not change. ## What will the impact be on contractors? Our experience of the changes being implemented in the Public Sector suggest that some end hirers may take a risk averse stance, deeming a large proportion of contractors as inside IR35 as a result. This may result in some contractors temporarily needing to work on a PAYE basis and losing the tax benefits of working through a Limited Company. ## How will my client assess my IR35 status? You client should use ‘reasonable care’ to ensure that they are making the determination based on the three tests that HMRC have laid out; control, substitution and mutuality of obligation. However, many end-clients have little (if any) IR35 expertise and as a result some businesses are making ‘blanket assessments’ in advance of April 2020 – essentially ignoring that the legislation demands they take reasonable care and simply suggesting that all of their contractors are inside IR35. Others are using HMRCs CEST (Check Employment Status for Tax) online tool, where they answer a series of questions about the contractor’s engagement and the tool tells them whether IR35 applies. ## What’s wrong with CEST? The tool has been designed by HMRC and some therefore argue that it is weighted in their favour. It is widely considered to be fundamentally flawed (indeed, HMRC investigations have regularly contradicted their own CEST tool) and yet the decision the tool arrives at will be relied upon by your end client to determine your IR35 status. ## Can I argue my case if I disagree with my client? If you find yourself with an end-client who has either blanket assessed all contractors as inside IR35 or carries out an individual assessment but incorrectly arrives at an inside IR35 conclusion, there are steps you can take, with a ‘client-led disagreement’ process part of the legislation. You can provide your evidence to your end client who then has 45 days to respond to your appeal. For more information about the appeals process, **[download our IR35 Survival Guide now](https://sg-accounting.co.uk/guides/your-ir35-survival-guide/).** ## What should I do if my client refuses to reconsider an incorrect assessment? You have 3 options: Leave and contract elsewhere – more reasonable clients do exist Accept permanent employment – but negotiate hard to help compensate for your losses! Contract through an umbrella company – ideally temporarily while you dispute your case Contract through your Limited Company – you’ll still pay tax and NI but there are other financial benefits To find out more about the options, download our **[IR35 Survival Guide now](https://sg-accounting.co.uk/guides/your-ir35-survival-guide/).** ## If I’ve been working outside IR35 and now I’m found inside for the same contract, will HMRC investigate? Caution should be exercised in accepting an inside IR35 decision from an existing client where you have previously operated outside of IR35. HMRC have said that they ‘have no plans’ to open retrospective enquiries into prior years but HMRC’s behaviour recently suggests this shouldn’t be relied upon. Our advice would be to challenge the decision with the support of your contractor accountant. ## Where can I get the best advice for my situation? A specialist contractor accountant is your best bet. At SG we’ve worked with contractors for more than 20 years, helping them through the changes in the Public Sector and are passionate about supporting the flexible workforce through the upcoming changes too. We have an in-depth understanding of the IR35 legislation and can discuss and advise on your individual circumstances for each contract you undertake. We can advise on changes to your contracts and working practices to make an ‘outside IR35’ determination more likely, and help you with evidence to appeal against an ‘inside’ determination. Every one of our clients has access to our sister company, SG Umbrella for an additional monthly fee. [**Get in touch**](https://sg-accounting.co.uk/contact/) now if you’d like the re-assurance of our IR35 expertise or [download your FREE IR35 Survival Guide now](https://sg-accounting.co.uk/guides/your-ir35-survival-guide/). **Categories:** IR35 **Tags:** IR35 - Guide, Switching - Service --- ### [Spending Review and Autumn Statement 2015](https://sg-accounting.co.uk/blog/spending-review-and-autumn-statement-2015/) **Published:** November 25, 2015 **Author:** Kerry Newman **Content:** The Chancellor gave his speech in the House of Commons today (25th November 2015) setting out his plans for the next few years and the current state of the economy. We were expecting some news for contractors and small businesses in relation to Travel and Subsistence claims and IR35 however there was no mention of IR35 and only minor clarifications to the changes in Travel and Subsistence claims set to come in April 2016. The full document can be found here: <https://www.gov.uk/government/publications/spending-review-and-autumn-statement-2015-documents> THE HIGHLIGHTS FOR CONTRACTORS AND FREELANCERS IR35 – A discussion document on IR35 was published in the Summer and invited responses from the industry. The responses have been received back and the Government will be reviewing these as part of a consultation. Nothing has been mentioned today regarding this and I don’t believe we will see anything back until next year at the earliest. TRAVEL AND SUBSISTENCE CLAIMS – As confirmed at the Summer Budget 2015, the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where IR35 applies. This change will take effect from 6 April 2016. APPRENTICESHIP LEVY – The Government will introduce an apprenticeship levy in April 2017. This will be at a rate of 0.5% of the employer’s salary costs and paid via PAYE. There is an exemption of £15,000 so effectively small businesses with salary costs of less than £3m per year will not have to pay this. It will however mean that umbrella companies will have to suffer this levy. I can’t see the umbrella companies taking this on the chin so would expect a further 0.5% deduction to be made by the umbrella company on its contractor workers. STAMP DUTY LAND TAX – Not content with hitting the buy to let investors with a personal tax liability following the restriction of mortgage interest tax relief there will be a new charge introduced for investors in buy to let property or second homes. Stamp Duty Land Tax will be paid at an additional 3% on top of headline rates from April 2016. Interestingly, Corporate entities appear to be excluded from this so we will need to wait on the legislation but could be another reason to transfer property held personally to a limited company structure or use profits built up in an existing company to invest in property. CAPITAL GAINS TAX: PAYMENT WINDOW – Another one here for investors in property. A payment on account will need to be made of the capital gains tax liability within 30 days of the sale from April 2019. Again, we will need to wait on the detail here but it will be interesting to see how this will be administered, my guess is that it will be deducted by the solicitor. DIVIDEND TAXATION CHANGES – There was no further mention of this and we are anticipating legislation to be drawn up in December 2015. We will of course digest this and contact our clients in January 2016 with details of the most tax efficient salary/dividend split and also if we should look at changes to shareholdings. CONTRACTOR LOAN SCHEMES AND OTHER TAX AVOIDANCE SCHEMES – Again, we have seen mention of HMRC being given more resources to tackle tax avoidance schemes. Our advice is unchanged….if something looks too good to be true it normally is! Contractor loan schemes that offer take home pay rates of 90% etc are a top priority for HMRC and we have seen so many examples of contractors being lured into these schemes and then hit with crippling tax bills down the line. OTHER HIGHLIGHTS - Planned cuts to tax credits have been scrapped entirely - New 30-hour free childcare subsidy for parents of three-and four-year-olds to be limited to those working more than 16 hours a week from 2017. The income limit on claiming this is being reduced from £150,000 to £100,000. - A Help to Buy scheme in London will offer up to 40% of the value of new build homes in interest free loans. - State pension will rise by £3.35 to £119.30 per week from next year. OUR RECOMMENDATIONS FOLLOWING THE AUTUMN STATEMENT - We will keep an eye on the IR35 consultation and feedback with anything relevant that comes out of this. - For those disguised employees caught by IR35 you will no longer be able to claim a deduction for Travel and Subsistence expenses when calculating the deemed salary from April 2016. You will however still be able to claim the 5% flat rate deductions, pension costs, capital allowances etc. - No changes to the current method of claiming expenses for the vast majority of ltd company contractors not caught by IR35. With the crackdown by HMRC on tax avoidance generally, we would urge all contractors to take a look at our expenses guide ([https://sg-accounting.co.uk/resources/guides/expenses-guide/](https://sg-accounting.co.uk/guides/expenses-guide/)) and review claims for items like the use of flat rate lunch deductions. - The use of Umbrella Companies in contracting will be even less attractive post April 2016 with the removal of travel and subsistence expenses and if the apprenticeship levy of 0.5% is passed on to workers. If you or a contractor you know is working under an umbrella company at the moment feel free to give us a call or pass on our details to see where we can help. We are expecting a large number of umbrella workers to be setting up limited companies over the next few months. Both operating inside and outside IR35 is still more beneficial through a ltd company and will become even more so for the majority of contractors. - We have a couple of years before the restrictions on mortgage interest relief come in for buy to let investors. We will be working with our partner Financial Advisors and mortgage brokers to see how the transfer of property into a ltd company will work where there is an existing mortgage in place. As long as the mortgage companies will lend to a ltd company we envisage tax savings in the future by holding property in a ltd company. **Categories:** News --- ### [Buying a company car as a contractor](https://sg-accounting.co.uk/blog/buying-company-car-contractor/) **Published:** July 24, 2018 **Author:** Kerry Newman **Content:** The majority of contractors use their personal car to travel to and from their clients’ offices. Those who do will use HMRC’s Mileage Approved Rates (MAPs) to claim for the cost of these journeys. However, they also have the option of purchasing a company car through their limited company. Check out our article on [‘Fuel efficient cars for contractors’ ](https://sg-accounting.co.uk/blog/fuel-efficient-cars-contractors/)to find out more. ![Purchasing a car](https://sg-accounting.co.uk/wp-content/uploads/2018/07/16689214063_459a1c92c6_z.jpg "16689214063_459a1c92c6_z | SG Accounting") From understanding the tax implications to knowing which option is better for you, this article discusses everything you need to know about buying a company car as a contractor. ## How it works If you decide to purchase a car through your limited company, the company will also be responsible for the maintenance and servicing costs of the car. These will be put through the accounts under [day to day running costs](https://sg-accounting.co.uk/guides/expenses-guide/). ## How it is taxed The amount of tax you pay on buying a company car depends on several factors, which include: - The list price of the vehicle - CO2 emissions of the car - The type of fuel it uses (electric, petrol, diesel) - Whether the company will pay the fuel costs - Which personal income tax the vehicle benefit cost falls in to As your limited company is providing you with a car you have to pay an income tax charge on the value of the benefit in kind you receive during the tax year. Plus, the company has to pay Employers Class 1A National Insurance Contributions on the value of the benefit. The benefit charge is calculated using the list price of the car and its CO2 emissions. You then multiply the car’s list price against the corresponding fixed rate percentage: | **CO2 emissions (g/km)** | **2018/19 Benefit in Kind %** | |---|---| | 0-50 | 13% | | 51-75 | 16% | | 76-94 | 19% | | 95-99 | 20% | | 100-104 | 21% | | 105-109 | 22% | | 110-114 | 23% | | For each additional 5g | Add 1% | | Until maximum reached | 37% | **Source**: HMRC Note: These rates are based on cars that are electric or use petrol. For a diesel car add an extra 4% (up to the maximum of 37%). ## A real life example ## ![Mercedes car for contractors](https://sg-accounting.co.uk/wp-content/uploads/2018/07/mercedes-contractor-car.jpg "mercedes-contractor-car | SG Accounting") This example is based on a limited company purchasing a Mercedes that costs £32,000 with CO2 emissions of 108g/km.\* Car benefit charge: £32,000 x 22% = £7040 Multiply this figure by the personal income tax rate the charge will fall into. If you’re a basic rate payer this will be £7040 x 20% = £1408 or for a higher rate tax payer, it will be £7040 x 40% = £2816. In addition to this your limited company has to pay Employers Class 1A National Insurance Contributions – £7040 x 13.8% = £971.52. \*This is a very simple example to illustrate how the system works and doesn’t consider other variables. ## Which option is the best? One of the advantages of buying a company car is that the capital cost of the car can be offset against your corporation tax. Which can also be spread over the lifetime of the vehicle, resulting in the company paying less tax. Whilst you can’t claim VAT on the car’s purchase cost, you can claim VAT on its running costs. ***However, the example above does illustrate how complex calculating company car taxation can be. We strongly suggest you [seek advice from ourselves](https://sg-accounting.co.uk/contact/) before deciding to buy a company car as you may be better off using your personal car and claiming for mileage costs. Give us a call 01962 867550 to discuss your options.*** **Categories:** Finance, New to contracting, Running your business --- ### [Autumn Budget Report 2018](https://sg-accounting.co.uk/blog/autumn-budget-report-2018/) **Published:** October 30, 2018 **Author:** Kerry Newman **Content:** Chancellor Philip Hammond presented this year’s Autumn Budget earlier than usual, due in part to the crucial final stages of the government’s Brexit talks with the EU. In our budget blog we provide an overview of the key announcements featuring in the Chancellor’s speech. The major change for contractors was the extension of the public sector [IR35](https://sg-accounting.co.uk/resources/guides/what-is-ir35/) rules to the private sector from April 2020. We are pleased that the Government has listened to ours and other voices asking for there not to be a knee jerk introduction of these rules. There will be a consultation next year into how the rules would apply but it is expected that the only real change would be who makes the decision and has the risk on IR35 status. The main implications are: - The risk of IR35 and the responsibility for making the decision on whether a contract is caught or not will fall on the end hirer rather than the contractor from April 2020. This will not apply for small companies (those with turnover of less than £10.2m, balance sheet total of less than £5.1m and 50 or fewer employees). - There will be a consultation on the detail of how the rules will apply but we do not anticipate any changes to the IR35 status determination so if you are outside IR35 now then you should expect to remain outside IR35 post April 2020. - The end hirer will need to show “reasonable care” in arriving at their determination of IR35 status. So we don’t expect to see any blanket decisions and instead each role looked at on its own merit. Indeed there is still an incentive for end hirers to ensure contractors are operating correctly outside IR35. Commenting on the budget our Managing Director, Daniel Mepham said, *“The announcement of the extension of the public sector rules into the private sector in this budget is what we expected. It’s good news that the government listened to us and other interested parties lobbying for more consideration before leaping into something. The main points of interest I see are:* 1. *It’s 18 months before the rules come into place. This gives businesses such as agencies and large companies the time to consider the rules and put decent contracts in place. The big banks etc will continue to recognise the importance of contractors in their workforce so it’s in their interest to have as many outside IR35 roles as possible. One bank won’t want to make a blanket “caught” decision and lose contractors to the bank next door that offers the role outside IR35.* 2. *Consultation on the way it is introduced will be next year. So still gives the opportunity for a watered down introduction in the private sector. E.g. CEST tool that actually works!* 3. *If Brexit doesn’t go to plan then there is plenty of time for a reversal of the decision such as with the self employed NI increase cancelled last year after it was announced in the Budget.* 4. *If a contractor is outside IR35 now then that shouldn’t change. It’s just the fee payer making the decision and taking on the risk. If the role is still outside IR35 then after April 2020 the risk passes to the engager…got to be good news for the contractor to not have to worry about it.* 5. *The decision by the engager can be appealed. If the contractor is deemed inside then we could appeal (if there is a case) when we put in the Corporation Tax return for the year.* *Ultimately, if you’re digging holes on £8 per hour through a ltd company then you’ve got a problem (but you probably had a problem before anyway!) but our clients are high earning experts that should still remain outside IR35 in the main. SG Accounting has a long history of navigating these changes, from before IR35 even existed in 2000, and will continue to fight the cause for our contractor clients and employees engaged under our sister brand SG Umbrella.”* --- **Contents** 1. [Introduction and highlights](#intro) 2. [Business tax and investment incentives](#business-tax) 3. [National insurance contributions (NICs)](#nics) 4. [National Minimum Wage and National Living Wage](#minimumwage) 5. [Tax and travel](#taxandtravel) 6. [Income tax and personal savings](#incometax) 7. [Capital taxes](#capitaltaxes) 8. [Value Added Tax (VAT)](#vat) 9. [Duties](#duties) 10. [Other measures](#othermeasures) 11. [What they said](#whattheysaid) 12. [Making Tax Digital](#digitaltax) --- ## Hammond delivers pre-Brexit Budget for a ‘brighter future’ ![Budget 5 months before we leave European Union.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/brexit-eu-europe-113885.jpg "brexit-eu-europe-113885 | SG Accounting") Chancellor Philip Hammond has delivered his second Autumn Budget, exactly five months before Britain is due to leave the European Union. The Chancellor was in bullish mood, asserting that the era of austerity is ‘finally coming to an end’ after a ‘long, hard journey’. However, he maintained that UK debt remains too high and highlighted the importance of continuing to reduce debt and borrowing. Citing the latest economic forecasts from the Office for Budget Responsibility, Mr Hammond revealed that the UK growth forecast has been upgraded from 1.3% to 1.6% for 2019, while public borrowing in 2018/19 is set to be £11.6bn lower than previously forecast at the time of the Spring Statement. With the Brexit negotiations ongoing, the Chancellor announced an additional £500m of departmental funding for Brexit preparations. He also raised the possibility of upgrading the 2019 Spring Statement to a ‘full fiscal event’ if no deal was agreed. Key announcements for businesses include a two-year cut in business rates for small retail properties in England from April 2019, worth £900m, together with a £675m fund to help rejuvenate high streets. The Annual Investment Allowance will also increase from £200,000 to £1m for a period of two years. Meanwhile, individual taxpayers are set to benefit from a bringing forward of the planned increase in the income tax personal allowance, which will rise by a further £650 in April 2019 to £12,500. The higher rate threshold will also increase from £46,350 to £50,000. However, from 2021, both thresholds will rise in line with CPI inflation. The stamp duty relief for first-time homebuyers will be extended to shared equity purchases of up to £500,000, while the lifetime allowance for pension savings will increase to £1,055,000. As widely anticipated, the Chancellor confirmed plans to introduce a new tax on the UK revenues of digital services companies from 2020, applying to those with global sales of more than £500m per annum. However, plans for a tax on takeaway coffee cups were overruled in favour of a new tax on plastic packaging containing less than 30% recycled material. Turning to duties, tax on beer, most cider and spirits have been frozen. Wine duty will rise in line with inflation, while tobacco duty will continue to rise by inflation plus 2%. Other announcements include confirmation of an extra £20.5bn for the NHS over the coming five years, together with additional funding to help welfare claimants transfer to Universal Credit. An additional £950m will be made available for the Scottish government, £550m for the Welsh government and £320m for the Northern Ireland Executive for the period to 2020/21. --- ## **Budget Highlights** **Two-year cut in business rates for small retail properties from April 2019** **Increase in personal allowance brought forward to April 2019** **Annual Investment Allowance increasing to £1m** **New 2% Digital Services Tax to be introduced from 2020** **Stamp duty exemption for first-time buyers extended to shared equity homes** **New tax on non-recycled plastic packing** **VAT threshold to remain unchanged until April 2022** **Access to Employment Allowance restricted from April 2020** --- ## **Business tax and investment incentives** ![Corporation tax in 2018 budget.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/Corporation.jpg "Corporation | SG Accounting") **Corporation tax** Corporation tax rates are as follows: | **Financial year from** | **1 April 2018** | **1 April 2019** | **1 April 2020** | |---|---|---|---| | Corporation tax rate | 19% | 19% | 17% | **Annual Investment Allowance (AIA)** The AIA will be temporarily increased from £200,000 to £1m. This change will have effect in relation to qualifying expenditure incurred from 1 January 2019 to 31 December 2020. **Capital allowances – special rate pool** The rate of writing down allowance on the special rate pool of plant and machinery will be reduced from 8% to 6%. The new rate will be effective from 1 April 2019 for businesses within the charge to corporation tax and 6 April 2019 for businesses within the charge to income tax. **Structures and Buildings Allowance (SBA)** The government will introduce a new SBA to provide relief for qualifying expenditure on new non-residential structures and buildings. Relief will be available for eligible expenditure incurred where all contracts for the physical construction works are entered into on or after 29 October 2018. Relief will not be available for the costs of land or dwellings. The SBA will be available at an annual rate of 2%. This will be at a flat rate, calculated on the amount of original construction expenditure. There will not be a system of balancing charges or balancing allowances on a subsequent disposal of the asset. Instead, a purchaser will continue to claim the annual allowance of 2% of the original cost. **First Year Allowances (FYAs)** Legislation will be introduced to end the FYA and first year tax credits for products on the Energy Technology List and the Water Technology List from April 2020. The current 100% FYA for expenditure incurred on electric charge-point equipment will be extended for a further four years. It will expire on 31 March 2023 for corporation tax and 5 April 2023 for income tax purposes. **Corporate capital loss restriction** The government will legislate to restrict companies’ use of carried forward capital losses to 50% of capital gains from 1 April 2020. The measure will include an allowance that provides companies unrestricted use of up to £5m capital or income losses each year. An anti-forestalling measure to support this change will have effect on and after 29 October 2018. **Research and Development (R&D) tax relief** A limit will be introduced on the amount of payable tax credit that can be claimed by a company under the R&D SME tax relief. The limit will be set at three times the company’s total PAYE and NICs payment for the period. The change will have effect for accounting periods beginning on or after 1 April 2020. Any loss that a company cannot surrender for a payable credit can be carried forward and used against future profits. **Digital Services Tax** From April 2020, the government will introduce a new 2% tax on revenues of certain digital businesses which derive value from their UK users. The tax will: - apply to revenues generated from the provision of search engines, social media platforms and online marketplaces - apply to revenues from those activities that are linked to the participation of UK users, subject to a £25m per annum allowance - only apply to groups that generate global revenues from in-scope business activities in excess of £500m per annum - include a safe harbour provision that exempts loss-makers and reduces the effective rate of tax on businesses with very low profit margins. **UK property income of non-UK resident companies** As previously announced, from 6 April 2020, non-UK resident companies that carry on a UK property business, or have other UK property income, will be charged to corporation tax, rather than being charged to income tax as at present. **Charities** Legislation will be introduced to increase the small trading tax exemption limits. These limits apply to trading that does not relate to the charity’s primary purpose. The current exemption threshold of £50,000 will be changed to £80,000 and the lower band changed from £5,000 to £8,000. The changes will have effect on and after 6 April 2019 for unincorporated charities and from 1 April 2019 for incorporated charities. **Corporate intangible fixed assets regime** The government will publish detailed proposals on how it intends to partially reinstate relief for acquired goodwill in the acquisition of businesses with eligible intellectual property. It will also alter the regime’s de-grouping charge rules so that a charge will not arise where de-grouping is the result of a share disposal that qualifies for the Substantial Shareholding Exemption. The changes to the de-grouping rules will have effect in relation to de-groupings occurring on or after 7 November 2018. **Off-payroll working rules** Responsibility for operating the existing off-payroll working rules, and deducting any tax and NICs due, will move from individuals to the organisation, agency or other third party paying an individual’s personal service company. Small organisations will be exempt. This change will come into effect from 6 April 2020. **Employment Allowance** The government will legislate to restrict access to the NICs Employment Allowance to employers with an employer NICs liability below £100,000 in their previous tax year. Where employers are connected under the Employment Allowance rules the threshold will apply to their aggregated liability. This will take effect from 2020. --- ## **National insurance contributions (NICs)** **2019/20 Class 1 (employed) rates** | **Employee** | | **Employer** | | |---|---|---|---| | **Earnings per week** | % | **Earnings per week** | % | | Up to £166 | 0 | Up to £166 | 0 | | £166.01 – £962 | 12 | Over £166 | 13.8 | | Over £962 | 2 | | | | | | | | *Entitlement to contribution-based benefits for employees retained for earnings between £118.01 and £166 per week. The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £962 per week.* | **Class 1A (employers)** | On employee taxable benefits | 13.8% | |---|---|---| | **Class 1B (employers)** | On PAYE Settlement Agreements | 13.8% | | **Class 2 (self-employed)** | Flat rate per week | £3.00 | | | Small profits threshold | £6,365 per annum | | **Class 3 (voluntary)** | Flat rate per week | £15.00 | | **Class 4 (self-employed)** | On profits between £8,632 – £50,000 | 9% | | | Excess over £50,000 | 2% | In a change to the government’s previous plans, Class 2 NICs are no longer set to be abolished from April 2019. --- ## **National Minimum Wage and National Living Wage** Increases in the National Minimum Wage and National Living Wage rates now occur in April each year. The rates applying from 1 April 2019 are outlined below. | | **Apprentices\*** | **16 and 17** | **18 – 20** | **21 – 24** | **25 and over** | |---|---|---|---|---|---| | National Minimum Wage | £3.90 | £4.35 | £6.15 | £7.70 | – | | National Living Wage | – | – | – | – | £8.21 | \*Under 19, or 19 or over and in the first year of their apprenticeship. --- ## **Tax and travel** ![Vehicle Tax within the 2018 budget.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/blur-car-drive-451590.jpg "blur-car-drive-451590 | SG Accounting") **Car and fuel benefits** The taxable petrol and diesel car benefit is based on the car’s CO2 emissions. It is calculated using the car’s UK list price and applying the ‘appropriate percentage’. The diesel supplement increased to 4% from 6 April 2018. It is removed altogether for diesel cars which are certified to the Real Driving Emissions 2 (RDE2) standard. The car fuel benefit is calculated by applying the same percentages to the fuel benefit charge multiplier, which for 2019/20 is £24,100. 2020/21 sees the introduction of a new range of bands with appropriate percentages ranging from 2%-19% for ultra-low emission vehicles (ULEVs) emitting less than 75 g/km of CO2. Cars with emissions over this amount would see the appropriate percentage set at the lesser of: 20%, plus 1% for each 5 g/km by which emissions exceed 75 g/km; and 37%. **VAT on fuel for private use in cars** Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation charge. **Company vans** The taxable benefit for the unrestricted private use of vans is £3,430 for 2019/20. There is a further £655 taxable benefit if the employer provides fuel for private travel. | **Van and fuel charge** | **Van £** | **Fuel £** | **Total £** | |---|---|---|---| | Tax (20% taxpayer) | 686.00 | 131.00 | 817.00 | | Tax (40% taxpayer) | 1,372.00 | 262.00 | 1,634.00 | | Tax (45% taxpayer) | 1,543.50 | 294.75 | 1,838.25 | | Employer’s Class 1A NICs | 473.34 | 90.39 | 563.73 | There is a benefit charge for zero emission vans but there is no fuel benefit for such vans. **Mileage rates** Changes to the HMRC business mileage rates are announced from time to time. The fuel only advisory rates below relate to company cars only and apply from 1 September 2018. | **Vehicle** | **First 10,000 miles** | **Thereafter** | **Car – fuel only advisory rates Engine capacity** | **Petrol** | **Diesel** | **LPG** | |---|---|---|---|---|---|---| | Car/van | 45p | 25p | 1400cc or less | 12p | 10p | 7p | | Motorcycle | 24p | 24p | 1401cc to 1600cc | 15p | 10p | 9p | | Bicycle | 20p | 20p | 1601cc to 2000cc | 15p | 12p | 9p | | | | | Over 2000cc | 22p | 13p | 13p | | CO2 emissions | Appropriate percentage | |---|---| | (g/km) | Petrol % | Diesel % | | 0 – 50 | 16 | 20 | | 51 – 75 | 19 | 23 | | 76 – 94 | 22 | 26 | | 95 – 99 | 23 | 27 | | 100 – 104 | 24 | 28 | | 105 – 109 | 25 | 29 | | 110 – 114 | 26 | 30 | | 115 – 119 | 27 | 31 | | 120 – 124 | 28 | 32 | | 125 – 129 | 29 | 33 | | 130 – 134 | 30 | 34 | | 135 – 139 | 31 | 35 | | 140 – 144 | 32 | 36 | | 145 – 149 | 33 | 37 | | 150 – 154 | 34 | | 155 – 159 | 35 | | 160 – 164 | 36 | | 165 and above | 37 | **Plug-in grants** The government has reformed the plug-in grant scheme, which offers grants towards the purchase of new qualifying ultra-low emission cars. The scheme will now focus on zero emission models such as pure electric and hydrogen fuel cell cars. By 9 November 2018 at the latest, the grant rate for Category 1 vehicles will reduce from £4,500 to £3,500 and Category 2 and 3 vehicles will no longer be eligible. The government has rolled out new plug-in van and motorcycle grants. **Vehicle Excise Duty (VED) rates** **VED bands and rates from 1 April 2019 for cars first registered on or after 1 April 2017** For the first year this is based on CO2 emissions. However, new diesel vehicles registered after **1 April 2018** that do not meet the RDE2 standard will be charged a supplement on their First Year Rate to the effect of moving up by one VED band. After the first year, all vehicles with zero emissions will be exempt from the standard rate of vehicle tax, and all other petrol or diesel vehicles will pay a standard rate of £145 a year. An additional rate will be added to the vehicle tax for all new vehicles with a list price of over £40,000 (including zero emission vehicles). This additional rate of £320 will be payable each year for five years from the end of the first vehicle licence. After the five year period the standard rate will apply. The government proposes to change to the new worldwide harmonised light vehicle testing procedure (WLTP) for measuring CO2 emissions. **Standard rates which apply from 1 April 2019 for cars registered from 1 March 2001 to 31 March 2017** | **VED Band** | **CO****2** **emissions** **(g/km)** | **Standard rate** | |---|---|---| | A | Up to 100 | £0 | | B | 101-110 | £20 | | C | 111-120 | £30 | | D | 121-130 | £125 | | E | 131-140 | £145 | | F | 141-150 | £160 | | G | 151-165 | £200 | | H | 166-175 | £235 | | I | 176-185 | £260 | | J | 186-200 | £300 | | K\* | 201-225 | £325 | | L | 226-255 | £555 | | M | Over 255 | £570 | \*Includes cars emitting over 225 g/km that were registered before 23 March 2006. | **CO****2** **emissions (g/km)** | **First year rate** | |---|---| | 0 | £0 | | 1 – 50 | £10 | | 51 – 75 | £25 | | 76 – 90 | £110 | | 91 – 100 | £130 | | 101 – 110 | £150 | | 111 – 130 | £170 | | 131 – 150 | £210 | | 151 – 170 | £530 | | 171 – 190 | £855 | | 191 – 225 | £1,280 | | 226 – 255 | £1,815 | | Over 255 | £2,135 | --- ## **Income tax and personal savings** ![Personal Savings in the 2018 budget.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/piggybankandmoney.jpg "piggybankandmoney | SG Accounting") The Chancellor announced a bringing forward of the planned increases in the personal allowance and the higher rate threshold for income tax. **Income tax rates and bands** | **2019/20** | **2018/19** | |---|---| | **Band £** | **Rate %** | **Band £** | **Rate %** | | 0 – 37,500 | 20 | 0 – 34,500 | 20 | | 37,501 – 150,000 | 40 | 34,501 – 150,000 | 40 | | Over 150,000 | 45 | Over 150,000 | 45 | **Savings income** | | **2019/20** | **2018/19** | |---|---|---| | Savings allowance basic rate | £1,000 | £1,000 | | Savings allowance higher rate | £500 | £500 | A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band. **Dividend income** | | **2019/20** | **2018/19** | |---|---|---| | Dividend allowance | £2,000 | £2,000 | | Dividend ordinary rate | 7.5% | 7.5% | | Dividend upper rate | 32.5% | 32.5% | | Dividend additional rate | 38.1% | 38.1% | **Personal allowances** | | **2019/20** | **2018/19** | |---|---|---| | **Personal allowance** | £12,500 | £11,850 | | **Personal allowance income limit** | £100,000 | £100,000 | | **Marriage allowance** Transferable between certain spouses where neither pay tax above the basic rate | £1,250 | £1,190 | | **Married couple’s allowance** (relief given at 10%) Either partner born before 6 April 1935 | £8,950 | £8,695 | | - minimum amount | £3,450 | £3,360 | | - income limit | £29,600 | £28,900 | | **Blind person’s allowance** | £2,450 | £2,390 | **Scottish income tax rates and bands** Savings and dividend income are taxed using UK rates and bands. | **2019/20** | **2018/19** | |---|---| | Rates and bands for 2019/20 will be announced in the Scottish Budget | Band £ | Rate % | | 0 – 2,000 | 19 | | 2,001 – 12,150 | 20 | | 12,151 – 31,580 | 21 | | 31,581 – 150,000 | 41 | | Over 150,000 | 46 | **Welsh income tax rates** From 6 April 2019, the UK government will reduce the basic, higher and additional rates of income tax paid by Welsh taxpayers by 10%, and three Welsh rates of income tax will then be added to the reduced UK rates. The Welsh government proposes to set the first Welsh rates at 10%. **Individual Savings Accounts (ISAs)** Individuals can invest in any combination of cash or stocks and shares up to the overall annual ISA subscription limit. However, a saver may only pay into a maximum of one Cash ISA, one Stocks and Shares ISA, one Innovative Finance ISA and one Lifetime ISA. The overall investment limit for 2019/20 is £20,000 (£4,368 for junior accounts). --- ## **Capital taxes** ![Capital gains tax calculator in the autumn budget 2018.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/budgeting.jpg "budgeting | SG Accounting") **Inheritance tax (IHT)** IHT is currently charged at 40% on the proportion of an individual’s estate exceeding the ‘nil-rate band’ of £325,000. Married couples and registered civil partners can pass any unused nil-rate band to one another on death. A residence nil-rate band (RNRB) now applies in addition to the nil-rate band, allowing a current or former ‘family home’ to be passed wholly or partially tax-free on death to direct descendants. The RNRB rates are set as follows: | **2018/19** | £125,000 | |---|---| | **2019/20** | £150,000 | | **2020/21** | £175,000 | There is a tapered withdrawal of the RNRB for estates valued at more than £2m, at a withdrawal rate of £1 for every £2 over this threshold. **IHT: changes to RNRB** The RNRB is intended to make it easier to pass on the family home to direct descendants without an IHT charge. A new measure introduces minor technical amendments to the RNRB relating to downsizing provisions and the definition of ‘inherited’ for RNRB purposes. These amendments clarify the working of the downsizing rules, and provide certainty over when a person is treated as ‘inheriting’ property. This measure will ensure that the RNRB is working in line with the original policy intent, meaning that it cannot be claimed outside of the intended scope and removing any uncertainty for taxpayers. **Capital gains tax (CGT)** | **Individuals** | **2019/20** | **2018/19** | |---|---|---| | Exemption | £12,000 | £11,700 | | Standard rate | 10% | 10% | | Higher rate/additional rate | 20% | 20% | | **Trusts** | | | | Exemption | £6,000 | £5,850 | | Rate | 20% | 20% | Higher rates (18%/28%) may apply to the disposal of certain residential property and carried interest. **Entrepreneurs’ Relief and Investors’ Relief** The first £10m of lifetime qualifying gains for each relief are charged at 10%. Gains in excess of the limit are charged at the rates detailed above. **Entrepreneurs’ Relief: minimum qualifying period extension** A new measure increases the minimum period throughout which certain conditions must be met to be eligible for Entrepreneurs’ Relief from one year to two years. This measure affects individuals who dispose of all or part of their business, individuals who dispose of shares in their personal company on or after 6 April 2019, and trustees who dispose of trust business assets. It will have effect for disposals on or after 6 April 2019, except where a business ceased before 29 October 2018. Where the claimant’s business ceased, or their personal company ceased to be a trading company (or the holding company of a trading group), before 29 October 2018, the existing one year qualifying period will continue to apply. **Entrepreneurs’ Relief: definition of a ‘personal company’** A new measure adds two new tests to the definition of a ‘personal company’. Both conditions, as well as the existing ‘share capital’ and ‘voting rights’ conditions must be met throughout the specified period. The new conditions require the individual to be beneficially entitled to at least: - 5% of the company’s distributable profits - 5% of its assets available for distribution to equity holders in a winding up. The measure has effect for disposals on or after 29 October 2018. **Taxing gains made by non-residents on UK immovable property** This measure is intended to ensure equal treatment between UK residents and non-UK residents on disposals of UK immovable property. It extends the scope of the UK’s taxation of gains accruing to non-UK residents to include gains on disposals of interests in non-residential UK property. It also extends the charge on gains on disposals of interests in residential property to diversely held companies, those widely held funds not previously included, and to life assurance companies. The measure also taxes non-UK residents’ gains on interests in UK property rich entities (for example, selling shares in a company that derives 75% or more of its value from UK land). The measure will have effect for disposals made on or after 6 April 2019. Anti-forestalling measures are in place. **CGT payment window** UK residents will be required to make a payment on account of CGT following the completion of a residential property disposal. The new legislation will also replace and extend the existing reporting and payment on account rules for non-UK residents. The above changes to the legislation will apply to disposals by non-UK residents on or after 6 April 2019. For UK residents the changes will have effect for disposals on or after 6 April 2020. **CGT private residence relief: reform of ancillary reliefs** From April 2020 the government will make two changes to private residence relief. The final period exemption will be reduced from 18 months to nine months. There will be no changes to the 36 months that are available to disabled persons or those in a care home. Lettings relief will be reformed so that it only applies in circumstances where the owner of the property is in ‘shared-occupancy’ with a tenant. --- ## **Value Added Tax (VAT)** | **From** | **From 1 April 2019** | **From 1 April 2018** | |---|---|---| | Standard rate | 20% | 20% | | VAT fraction | 1/6 | 1/6 | | Reduced rate | 5% | 5% | | Annual Registration Limit | £85,000 | £85,000 | | Annual Deregistration Limit | £83,000 | £83,000 | **VAT: treatment of vouchers** The government will implement an EU Directive on the VAT treatment of vouchers to ensure that the correct amount of VAT is charged on what the customer pays, irrespective of whether payment is with a voucher or other means of payment. This measure introduces legislation providing for the VAT treatment of vouchers issued on or after 1 January 2019. It affects only vouchers for which a payment has been made and which will be used to buy something. The measure does not apply to vouchers issued before 1 January 2019, for which existing rules will continue to apply. ## **Duties** **Alcohol and tobacco duties** The duty rates will be frozen for: - duty rates on beer - duty rates on spirits and other drinks above 22% alcohol by volume (abv) - duty rates on still cider and perry, and lower strength sparkling cider and perry. The duty rates on wine and made-wine at or below 22% abv, and high strength sparkling cider above 5.5% abv will rise by RPI inflation from 1 February 2019. The duty rate on all tobacco products will continue to increase by 2% above RPI inflation. It was also announced that hand-rolling tobacco will rise by an additional 1%, to 3% above RPI inflation this year. The new tobacco duty rates will have effect from 6pm on 29 October 2018. **Air Passenger Duty (APD)** The long haul rates of APD for the tax year 2020/21 will increase in line with the RPI as forecast at Autumn Budget 2018. Short haul rates will not rise. Previous plans for the Scottish government to replace APD with Air Departure Tax have been deferred, pending the resolution of issues relating to the exemption for flights departing from the Highlands and Islands. **Fuel duty** Fuel duty will be frozen for the 2019/20 tax year. **Stamp Duty Land Tax (SDLT)** **and first-time buyers relief** As from 22 November 2017, first-time buyers in England and Northern Ireland paying £300,000 or less for a residential property pay no SDLT. First-time buyers paying between £300,000 and £500,000 pay SDLT at 5% on the amount of the purchase price in excess of £300,000. This Budget announced an extension to first-time buyers relief in England and Northern Ireland so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property. This change will apply to relevant transactions with an effective date on or after 29 October 2018, and will also be backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers relief will be able to amend their return to claim a refund. --- ## **Other measures** **Voluntary tax returns** Legislation will be introduced in Finance Bill 2018/19 with retrospective and prospective effect to put HMRC’s longstanding practice of accepting voluntary tax returns onto a statutory basis. These voluntary returns will be put on an equal footing with returns delivered under a formal notice to file and apply to income tax, capital gains tax and corporation tax returns. **Business rates relief** Retail properties with a rateable value below £51,000 will see their business rates bills cut by a third for two years from April 2019, subject to state aid limits. **Gift Aid Small Donations Scheme (GASDS)** Currently the GASDS only applies to donations of £20 or less made by individuals in cash or by contactless payment. This limit will increase to £30. Parliamentary timetable permitting, this will become effective from 6 April 2019. --- ## **What they said** ‘I present to the House a Budget for Britain’s future; a Budget that shows the perseverance of the British people finally paying off.’ **Philip Hammond, Chancellor of the Exchequer** ‘What we’ve heard… are half measures and quick fixes while austerity grinds on.’ **Jeremy Corbyn, leader of the Labour Party** ‘Through the Budget, the Chancellor is now using the strength of the Treasury to back small business.’ **Mike Cherry, National Chairman of the Federation of Small Businesses** ‘While we hope the Chancellor’s confidence that there will be a Brexit deal is well-placed, firms have to look at all possible scenarios and will be deeply disappointed to see no funds have been allocated to helping them map out potential outcomes.’ **Stephen Martin, Director General of the Institute of Directors** ‘In an atmosphere of unprecedented uncertainty and heightened political noise, the Chancellor has demonstrated that he is listening to business concerns by delivering a Budget that supports investment and growth.’ **Dr Adam Marshall, Director General of the British Chambers of Commerce** --- ## **Making Tax Digital** ![IT contractor using the computer to complete making tax digital return.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/Maninoffice.jpg "Maninoffice | SG Accounting") The government is phasing in its landmark Making Tax Digital (MTD) initiative, which will see the introduction of a fully digital tax system, with businesses and individuals being required to register, file, pay and update their information via a secure online tax account. From 1 April 2019, businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD ‘functional compatible software’. The government recently announced that it has made the decision to delay the mandation of MTD for VAT until 1 October 2019 for a small minority of VAT-registered businesses with ‘more complex requirements’. Keeping digital records and making quarterly updates will not be mandatory for taxes other than VAT before April 2020, although businesses below the VAT threshold which have voluntarily registered for VAT can opt to join the scheme. ‘Functional compatible software’ is defined as ‘a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API)’. The software must be capable of keeping records in digital form; preserving records in digital form for up to six years; creating a VAT return from the records held; providing HMRC with VAT data on a voluntary basis; and receiving information from HMRC via the API platform. Firms are permitted to keep digital records in a range of compatible software programs. The use of spreadsheets is also permitted, provided that this is in combination with MTD software. However, HMRC has outlined that manual data transfer is not allowed: copying by hand or manual transposition of data into software is not permitted, and cut and paste will not be acceptable in the long-term. HMRC will not be providing taxpayers with MTD software. Currently, it is working alongside software developers in order to ensure products are on the market by the MTD start date. HMRC will provide a full list of MTD-compatible products as soon as possible: an initial list can be found on the gov.uk website. This Budget Report was prepared immediately after the Chancellor’s Budget Statement based on official press releases and supporting documentation. The Budget proposals are subject to amendment before the Finance Act receives Royal Assent. This Report is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. You can greatly reduce your stress by having an experienced contractor accountant to assist you. With over 20 years’ experience in the contracting sector, we class as ourselves as experts in handling contractor accounts. ### If you’re ready to take the step into contracting, [click here](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) to download our free guide to contracting. Or, speak to one of our directors on 01962 867550 to find about our monthly accounting [packages](https://sg-accounting.co.uk/prices/). **Categories:** News --- ### [Is there a perfect time to become an IT contractor?](https://sg-accounting.co.uk/blog/is-there-a-perfect-time-to-become-an-it-contractor/) **Published:** May 10, 2018 **Author:** Kerry Newman **Content:** There are several reasons why you may choose to work as an IT contractor. It could be that you need greater flexibility and your current role can’t offer this, or it could be that you’ve taken a career break and are looking to get back in the world of work. As contractor accountants, we’re often asked the question, “*Is there a perfect time to become an IT contractor?*” The truth is, there isn’t a set date or time when it is best to become a contractor. You must decide when the perfect time is for you. The key things for you to think about are: ## **1. How strong is the contractor market?** ![A female contractor at a desk with a laptop and a coffee working](https://sg-accounting.co.uk/wp-content/uploads/2018/05/contractor-at-laptop.jpg "contractor at laptop | SG Accounting") The outlook for contractors remains promising. According to figures released by REC (Recruitment & Employment Confederation), the demand for skilled IT contractors is particularly strong. We partly have Brexit to thank for this, as companies put hiring plans and projects on hold until the final details of the divorce deal are put in place. There also continues to be a skills-shortage in some areas of the IT industry. Some of the areas that businesses and recruiters are finding it hard to recruit for include; Cyber Security, CAD, Gaming and GDPR. However, the market for contractors does fluctuate. Typically, the quieter months for contractors are July and August and around mid-December. It’s no surprise that these months coincide with the main holiday periods. Recruiters will advise you that the best times to start looking for contract work is around March / April. September is also a good month as companies are keen to move forward with projects after the quiet summer months. ## **2. Are my skills up to scratch?** ![Close-up on a pair of skilled hands problem-solving a rubik's cube](https://sg-accounting.co.uk/wp-content/uploads/2018/05/magic-cube-skills-1.jpg "magic cube skills | SG Accounting") Companies are paying a premium for your expertise. They will expect you to hit the ground running. Before you choose to give up the security of employment and become self-employed, you should assess the skills that are needed to be a successful IT contractor. If you feel that you are lacking in some areas, try to upskill whilst you are still in employment. Doing it before you leave your job will make it easier for you to secure a contract once you do leave. ## **3. Am I ‘fit’ to become a contractor?** ![Above the head of a contractor at a very busy desk in black and white](https://sg-accounting.co.uk/wp-content/uploads/2018/05/bw-contractor-desk.jpg "bw contractor desk | SG Accounting") As we mentioned, your client has hired you for your expertise. This ‘label’ can put added pressure on you. Before you make the decision to become an IT contractor, ask yourself, if you can physically and mentally handle this extra pressure. If you have any doubts, now may not the right time to do it. ## **4. Can I cope financially?** ![Pink piggy bank facing forwards](https://sg-accounting.co.uk/wp-content/uploads/2018/04/piggy-2889042_1920.jpg "piggy | SG Accounting") Being self-employed means, you’ll no longer have the benefit of sick-pay, paid holidays, a pension or a subsidised healthcare. You’ll have to cover the full cost of these things yourself. That saying, as an IT contractor you should expect to earn on average £400 per day. If you’re looking to work in niche areas such as [Cyber-Security](https://sg-accounting.co.uk/blog/contracting-in-cybersecurity/), this can be more than £500 per day. As well as the loss of employment benefits, you’ll have to factor in times when you are in-between contracts. Before making the leap into contracting, examine your monthly expenditure and calculate if your earnings from contacting (taking into account possible periods when you may not be working) will cover your outgoings. ***If you’re in a permanent role and are considering becoming a contractor, or if you’ve been out of the contracting market for a while and are thinking of re-entering,*** [***download***](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) ***our free guide to contracting which is full of practical tips and advice on becoming a contractor.*** **Categories:** New to contracting --- ### [Getting the rate you deserve - negotiating contract rates](https://sg-accounting.co.uk/blog/negotiating-contract-rates/) **Published:** March 27, 2019 **Author:** Kerry Newman **Content:** Contractors who work in the IT sector were able to command some of the highest rates during 2018. According to data by ITjobswatch, in the six months up to 14th January 2019, the average day rate of an IT contractor was £500. If you work in an area of IT where your skills are in high-demand, you can ask for higher rates. For example, a security adviser can look to earn on average £780 per day. But what should you do if your ideal contract role is offering less than your day rate? Well, it’s time to negotiate. The success of your negotiation all depends on how you handle it. Here we discuss steps you can take to make sure you get the outcome you want: ## Do your research If you believe the rate on offer is below the industry average, go armed with evidence to prove it. Recruiters who work in your area of specialism will be able to tell you the average day rate. Of course, you have to factor in things like location and market need, so the rate on offer for a role in Leeds may differ to that of a similar role in London, for instance. ![Hands on laptop doing research.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/Handonlaptop.jpg "Handonlaptop | SG Accounting") You can also find average day rates online. Job search sites like Indeed, Reed, Monster and Jobsite all have salary comparison tools. ## Ask yourself if you’re worth the rate When you go into a negotiation you have to be sure you are going into it on a strong footing. Otherwise, the client may find an excuse to refuse your request for a higher rate. So, make sure you have good references and the required skills and experience to be outstanding in the role. If necessary, find the time to enrol on a course or two to refresh your knowledge and skills. ## Be willing to compromise ![Shaking hands compromising on a price.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/shakinghands.jpg "shakinghands | SG Accounting") It may be easier for the client to match what you are asking for if you are renegotiating a contract. But, if you’ve never worked for them before, the client may act cautiously. In both cases, it’s better for you to go in with a high offer and be willing to negotiate down to a level that you both find acceptable. If this is a ‘dream role’ but the client is unable to budge on the day rate, ask for a clause to be included in your contract that a review of your day rate must be undertaken within a certain time period. A good time to do this is three to six months into the role as this is long enough for the client to measure your performance. ## Keep your cool Negotiating a rate increase can take time. It may be quicker if you are dealing directly with the client. But if you’re having to go through an agency you will have to factor in extra time as the agency will have to wait to hear back from the clients HR department. Our advice is to stay patient and don’t rush the process as you may end up with less than you want. But if you feel the client is deliberately dragging their feet you may have to be prepared to walk away. ***Asking for a higher day rate can be a daunting task, particularly if you’re relatively new to contracting. Don’t worry though, our free guide to contracting explains everything you need to know if you want to work as a contractor. Download your FREE copy*** [***here***](https://sg-accounting.co.uk/guides/a-guide-to-contracting/)***.*** **Categories:** Finance --- ### [Latest legislation affecting contractors](https://sg-accounting.co.uk/blog/latest-legislation-contractors/) **Published:** September 24, 2018 **Author:** Kerry Newman **Content:** Contracting can be one of the most rewarding ways to work – it gives you greater flexibility over who you work for and when you work. It can also provide the opportunity to work on some truly awesome projects. Yet, anyone who works as a contractor will know how much legislation governs the work of a contractor. Particularly those who choose to work through a limited company. In this article we discuss the latest legislation that will affect contractors: ## IR35 – Intermediaries Legislation We can’t have an article on legislation without mentioning IR35, or the Intermediaries Legislation as it also known. IR35 has been around since 2000 and has gone through several transformations since then. Most recently, in April 2017, the off-payroll rules were imposed on public sector contractors. Many public sector organisations decided it best to impose a blanket ban, which meant hundreds of contractors who were legitimately outside of IR35, are now treated as employees for tax purposes. They effectively get taxed as an employee but aren’t entitled to the benefits of employment i.e. holiday, sick, paternity or maternity pay. In May this year, the consultation was started to investigate the impact of extending this to the private sector. Many are saying that this consultation is just a procedure that HMRC has to show they are going through. And, in reality, they have already made the decision to introduce it into the private sector. Only time will tell, what will happen. We are sure to keep you updated on any developments. ## Loan Charge ![A calculator, pen and graph, to calculate the loan charge.](https://sg-accounting.co.uk/wp-content/uploads/2018/09/Calculator.jpg "Calculator | SG Accounting") The Loan Charge is a piece of legislation that comes into force in 2019, but we feel it is important to highlight its impeding effect on some contractors. The Loan Charge will affect contractors who have willing used disguised remuneration schemes to reduce their tax liabilities, and also those who were unwittingly talked into using such a scheme. Disguised remuneration schemes effectively let contractors take a loan (that was generally never repaid) instead of a salary. HMRC became concerned that these schemes were being used to reduce tax liabilities. The Finance (No. 2) Act gives HMRC the power to tax members of these schemes going back almost 20 years. The Loan Charge will apply if the: - Loan was arranged on/after 6th April 1999, and part or all of the loan is outstanding on 5th April 2019 - Loan was arranged on 5th April 1999 and would have fallen into the new disguised remuneration legislation If you fear you may be affected by the Loan Charge, you have several options: - Get in contact with HMRC to discuss a possible settlement package. To do this you will need to forward all relevant information to HMRC by the end of September 2018 - If allowed, pay back the loan in cash by 5th April 2019. This will wipe out any potential tax liabilities - Pay the Loan Charge. Considering that PAYE and NIC due may be considerable due to the timeframe involved - Prove the scheme should not be subject to the retrospective taxation. This is a risky option as it may be hard to successfully prove this ## GDPR GDPR has been extensively covered in the last few months. Reports have mainly discussed the measures that organisations must have in place to seek your consent to use your information and this information is stored. ![Latest legislation affecting contractors](https://sg-accounting.co.uk/wp-content/uploads/2018/09/Manworkingonlaptop.jpg "Manworkingonlaptop | SG Accounting") However, what happens if you are privy to handling others information? If you are a contractor who has access to personal information that an organisation holds, as a ‘third party’ you must ensure that you have procedures and policies in place to protect this data against an attack or a breach. It is important that you assess your current policies and procedures and if necessary take immediate action to ensure they are GDPR compliant. ### Need a hand? If you would further information on the Intermediaries Legislation or Loan Charge, speak to a member of our team on 01962 867550 or contact us [here](https://sg-accounting.co.uk/contact/). Why not download our [‘guide to contracting’](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) to get more advice on all matters contracting. **Categories:** IR35, News **Tags:** IR35 - Guide, Switching - Service --- ### [Budgeting Tips for Contractors](https://sg-accounting.co.uk/blog/budgeting-tips-for-contractors/) **Published:** October 19, 2018 **Author:** Kerry Newman **Content:** For many, the draw of contracting is being able to choose who you work for, where you work and the rate you want to charge. The flexibility that contracting offers, does have a downside – getting a contract is never guaranteed. Here are our top budgeting tips to help you manage in times when you aren’t working because of illness or the lack of available contracts: ## Decide on your structure When you decide to become a self-employed contractor, there are three ways you can operate, as a sole trader, through an umbrella company or through your own limited company. Contractors who plan to make contracting a long-term career choice, frequently choose the option of working through their own limited company. Firstly, you have limited liability for any financial loss the company makes, and secondly, your take-home pay will be higher when compared to working as a sole trader or via an umbrella company. The downside of working through a limited company is managing the paperwork that is generated from the various director responsibilities. There is no need to panic though, as an experienced contractor accountant, we can help you with this. ## Calculate your optimum rate If you are new to contracting or are planning on working short contracts, it is essential that you have a good grasp on your monthly outgoings i.e. mortgage / rent, utility bills, food shopping, loan or credit card repayments etc. Knowing what your outgoings are will make setting your rates that much easier. ## Know where you stand with money If you decide that working through a limited company is the best structure for you, you must remember that any money held within the business does not belong to you. It belongs to the business. You can only withdraw money held within the limited company via a salary, dividends, or a combination of both. ![People holding piggy bank of money used for saving.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/piggybankandmoney.jpg "piggybankandmoney | SG Accounting")Using the business’s money for personal expenses, or vice versa can cause issues further down the line, which can be difficult to resolve. ## Make saving second nature When a contractor joins us one of the first things we tell them is put money away each month to cover their tax liabilities. As a general rule, we recommend putting away between 25% to 35% of your monthly turnover. In addition to this, it also advisable to set aside a further 10% to 15% as savings that you can draw on at times when you are not working. Saving money may not be in your nature but getting into the habit of doing it early on in your contracting career will help you manage your cashflow and ensure you have money to see you through the quiet periods. ## Don’t be late with payments A very simple piece of advice, but with hectic schedules, it can be easy for things to be forgotten. To avoid late payment fees and interest payments, make sure you pay things like credit cards on time. ![Mobile phone on brown folder. Phone says pay invoice.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/payinginvoice.jpg "payinginvoice | SG Accounting")Some of the contractors we work with have found it helpful to set a direct debit to cover the minimum payment. ## Get professional help We may sound biased in saying this but engaging with an experienced accountant will truly save you time and money. With over 20 years’ experience of working with contractors, we can advise on which structure is best suited to you, give guidance if you need to be VAT registered, offer clarification on expenses and assist with preparing and submitting accounts to HMRC. If you would like more advice about contracting, download our [‘Free guide to contracting’](https://sg-accounting.co.uk/guides/a-guide-to-contracting/). ***If reading this has spurred you on to get a handle on your accounts, give us a call on 01962 867550 to see which monthly [accounting package](https://sg-accounting.co.uk/prices/) is best suited for you.*** **Categories:** Finance --- ### [Contracting abroad – what to consider](https://sg-accounting.co.uk/blog/contracting-abroad/) **Published:** June 12, 2018 **Author:** Kerry Newman **Content:** If you are a contractor whose skills are in high-demand, you may at some point in your contracting career find yourself with an offer to work abroad. Not only could this be fantastic for your career, it also offers you the opportunity to immerse yourself in a new culture and expand your professional network. Before, you rush off to buy a plane ticket, here are some things to take into consideration: ## **Travel documents and work permits** ![USA visa issued to a contractor working abroad](https://sg-accounting.co.uk/wp-content/uploads/2018/06/USA_visa_issued_by_Shenyang_2012.jpg "USA_visa_issued_by_Shenyang_(2012) | SG Accounting") As the UK is technically still a member state of the EU, UK residents do not need visas to travel and work in Europe. However, there are some areas where work permits are required. For example, even though Switzerland is part of the EU social charter for free movement of labour, you will need to obtain a residence and work permit to work as a contractor. For countries outside of the EU zone, work permits will be required. How easy it is to obtain a work permit depends on the country that the contract is in and the type of role you will be doing. Before signing a contract, it is worth carrying out extensive research and if possible, speaking with other contractors who have worked in the country, to find out what the process involves. ## **Tax laws** The biggest concern for anyone who is self-employed is being able to maximise their take home pay by working as tax efficiently as possible. This becomes even more important if you are planning on contracting overseas. Even though you will be working abroad, you may still be required to pay UK taxes. Most contractors in the UK choose to work through their own limited company as it is the most efficient set-up in terms of taxation. However, if you continue to operate through a limited company whilst contracting overseas you may be liable for paying corporation taxes in your chosen country if moving the business substantially to that country. Before you make the decision to contract abroad, get professional tax planning advice from an experienced contractor accountant – like ourselves. ## **Working patterns** ![World clocks pointing to the time in London, New York, Tokyo and Moscow](https://sg-accounting.co.uk/wp-content/uploads/2018/06/world-clocks.jpg "world-clocks | SG Accounting") The standard working hours in the UK is 9-5.30. It is unlikely that this will be the case in other countries. For example, in Spain, the typical working day is 9 am to 8 pm, with a two-hour break in the middle of the day. And, in Dubai, the standard working week is Sunday to Thursday. It is important to take into consideration, the working pattern of the country you will be contracting in, and to ask yourself if this will fit with your personal circumstances. ***If you are looking to contract overseas, give us a call on 01962 867550 or send us a message via our [website](https://sg-accounting.co.uk/contact/) to discuss your different options. If you’re interested in becoming a contractor, [download](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) or comprehensive guide to contracting.*** **Categories:** Running your business **Tags:** Switching - Service --- ### [Your contractor accounting glossary of terms](https://sg-accounting.co.uk/blog/your-contractor-accounting-glossary-of-terms/) **Published:** February 4, 2020 **Author:** Kerry Newman **Content:** Do you know your RTI from your PAYE? Contractor accounting can seem full of jargon and acronyms – so here’s a quick overview with our contractor accounting glossary of terms. **Annual Financial Accounts** Annual Financial Accounts often referred to as Company Accounts or Annual Accounts. They include an income statement, a balance sheet and a directors’ report. Annual Financial Accounts need to be submitted to HM Revenue & Customs (HMRC) and Companies House. **Companies House** This is the UK Registrar of Companies where you must incorporate your limited company. Each registered company is required to file Annual Financial Accounts and Confirmation statements with Companies House. **Confirmation statements** Confirmation statements must be filed annually with Companies House. It gives details of directors, secretaries, the registered office, share capital and shareholding. **Corporation Tax** Corporation Tax is a tax levied on company profits. Corporation Tax is calculated as a percentage of your profit at the end of the company year. **Dividends** Dividends are payments made by a company to its shareholders from company profits. **Payroll Year End Returns (FPS)** Each tax year (6 April – 5 April) requires a final payroll return to “close off” the year’s PAYE (pay as you earn or salary tax) submissions to HMRC by all companies that pay staff salaries, by 19 April. **Expenses** Expenses arise during the discharge of company business; they are wholly and exclusively for the business and have been paid for personally. These expenses can be claimed back from the company. Expenses paid out by the company reduce the company profit and corporation tax liability. **Flat Rate Scheme (FRS)** A scheme that was designed to simplify VAT compliance for small businesses. Businesses can charge VAT at the standard (20%) rate and pay it back to HMRC at a lower rate based on their trade sector. **HM Revenue & Customs** Her Majesty’s Revenue and Customs (HMRC), also referred to as “HM Revenue & Customs”, is the government body responsible for the collection of taxes. **IR35** [IR35](https://sg-accounting.co.uk/resources/guides/what-is-ir35/) is a piece of legislation that allows HMRC to collect additional payment where a contractor is an employee in all but name. **Limited company** A separate legal entity incorporated with Companies House. **National Insurance** National Insurance (NI) contributions are made based on earnings or profit. **PAYE** Pay as You Earn (PAYE) is a tax on income deduced at source by employers on behalf of HMRC. **Real Time Information payroll returns** Also known as RTI. These are monthly payroll returns that need to be submitted to HMRC declaring what salaries your company has paid yourself and/or your employees. **Turnover** Your business turnover means the total sum invoiced by your company (excluding VAT). **VAT** Value Added Tax (VAT) is an end-user tax added to products or services. Output VAT is added to invoices and collected on behalf of the government. Input VAT is what is paid to suppliers. The difference in output VAT less input VAT is required to be paid quarterly to HMRC. *We hope you found our contractor accounting glossary of terms useful. Join SG and your Senior (Director level) Accountant will be on the end of the phone to demystify everything for you and help make your contracting career as profitable as possible.* *For more straight-talking advice, why not download your [free guide to contracting](https://sg-accounting.co.uk/guides/a-guide-to-contracting/)?* **Categories:** New to contracting **Tags:** New - Guide, New - Service --- ### [Top-paying sectors and roles for contractors in 2019](https://sg-accounting.co.uk/blog/best-paying-contractor-roles/) **Published:** June 18, 2019 **Author:** Kerry Newman **Content:** Contracting may not be for everyone but for those who are willing to fully embrace it, they can find themselves having greater control over the type of projects they work on, being able to choose which companies they work with and where, and ultimately if they structure the way they work correctly they could take home more money than they did as an employee. If you’re thinking of contracting in your field of expertise or are thinking of retraining in a different sector, here is a list of some of the top paying contract roles: | Sector | Role | Average Day Rate | |---|---|---| | Management | Programme Management | £636 | | Finance | Credit Risk Management | £625 | | IT | Enterprise Architect | £625 | | Consulting | Strategy Consulting | £563 | | Finance | Corporate & MA Strategy | £550 | | Change Management | Risk Change | £525 | | IT | IT Senior Manager | £525 | | Finance | Risk Management | £513 | | Change Management | Operational Change | £500 | | Change Management | Finance Change | £500 | | Management | Project Management | £475 | | Finance | Model Validation | £450 | | Data | Business Analyst | £450 | | IT | IT Service Delivery | £450 | Sources: Indeed, Jobsite, IT, CW Jobs N.B: These are average day rates and rates may vary in different areas, particularly in cities like London, Manchester and Birmingham where there is a higher demand for contractors with these skills. From the table above, it’s evident that the contracting skills most in demand are centred around the Finance, IT and Change Management sector. But what skills will be in demand in twenty or thirty years? A report by the McKinsey Global Institute titled [‘Jobs lost, jobs gained: What the future of work will mean for jobs, skills and wages’](https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages) found that by 2030, 800 million jobs will be lost worldwide to automation. The study focused on 46 countries and found that the countries who are most at risk of job losses to automation include the more affluent nations like India, US, Germany and the UK. This may sound surprising, but these are the countries who have the resources to put into automation. ![Robot illustrating automation on jobs.](https://sg-accounting.co.uk/wp-content/uploads/2019/06/robot.jpg "robot | SG Accounting") As the speed at which are robots are taking over human roles, increases, Thomas Frey, an IBM award winning Engineer and futurist, predicts that the jobs which will be in demand in 2040 include: Robot Maintenance, Data Engineers / Managers, Drone Operatives, Personal health physicians, AI freelancers such as AI writers and AI artists, Driverless crew operatives and engineers, Blockchain Architects, 3D printing fabricators, Cryptocurrency wealth managers and mortgage brokers and Space technology crews. Some of these roles certainly do sound fantastical! **If you are looking to start contracting and are not sure how to start, download our free Guide to Contracting which covers things like the pros and cons of contracting, whether you should work through an umbrella company or a limited company, what you can claim as business expenses and how to find a contractor accountant. [Download your free copy here.](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) Or, if you are already contracting and have a question for us, speak to one of our Directors on 01962 867550 or send us a message via our [website. ](https://sg-accounting.co.uk/)** **Categories:** Guides, News --- ### [Budget 2021 – what does it mean for contractors?](https://sg-accounting.co.uk/blog/budget-2021-what-does-it-mean-for-contractors/) **Published:** March 3, 2021 **Author:** Kerry Newman **Content:** Although Rishi Sunak’s budget today didn’t repeal the off-payroll legislation change due in April as we might have hoped, it’s not all bad news for contractors. With the economy expected to recover to pre-Covid level by mid-2022, the Chancellor set out his plans for supporting the recovery and subsequently recovering some of the cost associated with the pandemic. For contractors the good news is that Income Tax, National Insurance, Annual Exemption for Capital Gains Tax, the VAT registration threshold, Inheritance Tax limit and VAT rates are all not being raised. However, with income tax thresholds and personal allowance frozen from 2022 until 2026, income tax payable will rise as salaries rise. Contractors will also breathe a sigh of relief that no changes were made to Business Asset Disposal Relief (previously Entrepreneurs Relief) meaning those contractors wishing to close via a Members Voluntary Liquidation (MVL) will still be paying tax at a rate of 10% on the assets and cash on closure. Contractors with profits over £50,000 will be caught by a Corporation Tax increase due in 2023, from 19% to 25%. However, many contractors who currently post higher profits can mitigate their tax liability with good financial planning. Please speak to us about how to go about this so we can help get your business in shape before 2023. Pension contributions are going to be a massive tax planning opportunity in the future due to this. With IR35 in the Private Sector due to go ahead from April 1st, please take a look at [our information hub](https://sg-accounting.co.uk/guides/your-ir35-survival-guide/) to make sure you’re ready. Here you’ll find the bullet pointed headlines, followed by all the detail, so read on. ## Headlines **Coronavirus support** - Furlough to be extended until the end of September - Government to continue paying 80% of employees’ wages for hours they cannot work - Employers to be asked to contribute 10% in July and 20% in August and September - Support for the self-employed also to be extended until September - 600,000 more self-employed people will be eligible for help as access to grants is widened - £20 uplift in Universal Credit worth £1,000 a year to be extended for another six months - Working Tax Credit claimants will get £500 one-off payment - Minimum wage to increase to £8.91 an hour from April 2021 **Taxation** - No changes to rates of Income Tax, National Insurance or VAT - Personal income tax allowance to be frozen at £12,570 from 2022 to 2026. - Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026 - Corporation tax on company profits to rise from 19% to 25% in April 2023 (tapered from £50,001 to £250,000 profit) - Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000 - Stamp duty holiday extended to June, with no levy on sales of under £500,000 - No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances **Business, digital and science** - Tax breaks for firms to “unlock” £20bn worth of business investment - Firms will be able “deduct” investment costs from tax bills, reducing costs by 130% - Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships - VAT rate for hospitality firms to be maintained at 5% until September - Interim 12.5% rate to apply for the following six months - Business rates holiday for firms in England to continue until June with 75% discount after that - £5bn in re-opening grants for non-essential businesses worth up to £6,000 per premises - New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas - Contactless payment limit will rise to £100 later this year ## The detail ## Personal Tax ## Universal Credit Universal Credit is a single payment that is made up of different amounts depending on an individual’s circumstances. There is no entitlement if an individual’s capital is worth more than £16,000. Shortly after the 2020 Budget the Chancellor announced an increase in the Universal Credit standard allowance by £20 per week for one year. The government is extending the temporary £20 per week increase for a further six months. ## Working Tax Credit The government is making a one-off payment of £500 to eligible Working Tax Credit claimants to provide extra support over the next six months. ## Mortgage guarantee scheme The government will introduce a new mortgage guarantee scheme in April 2021. This scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of 5% on homes with a value of up to £600,000. Under the scheme, all buyers will have the opportunity to fix their initial mortgage interest rate for at least five years should they wish to. The scheme, which will be available for new mortgages up to 31 December 2022, is designed to increase the availability of mortgages on new or existing properties for those with small deposits. ## Green National Savings and Investment (NS&I) product The government will offer a green retail savings product through NS&I in the summer of 2021. This product will be closely linked to the UK’s sovereign green bond framework and will give all UK savers the opportunity to take part in the collective effort to tackle climate change. The green gilt framework, to be published in June, will detail the types of expenditure that will be financed to meet the government’s green objectives. ## Venture Capital Schemes: extension of the Social Investment Tax Relief The government will continue to support social enterprises that are seeking growth investment by extending the operation of Social Investment Tax Relief to April 2023. This will continue the availability of income tax relief and capital gains tax hold-over relief for investors in qualifying social enterprises. ## Pensions Lifetime Allowance The lifetime limit sets the maximum figure for tax-relieved savings that an individual can build up over their lifetime. Legislation will be introduced to remove the annual link to the CPI increase for the next five years. This will maintain the standard Lifetime Allowance at £1,073,100 for tax years 2021/22 to 2025/26. ## Income Tax and Personal Savings The Chancellor announced the following income tax rates and allowances. ## Income tax rates and bands | ### 2021/22 | | ### 2020/21 | | |---|---|---|---| | **Band £** | **Rate %** | **Band £** | **Rate %** | | 0 – 37,700 | 20 | 0 – 37,500 | 20 | | 37,701 – 150,000 | 40 | 37,501 – 150,000 | 40 | | Over 150,000 | 45 | Over 150,000 | 45 | *Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.* ## Savings income | | ### 2021/22 | ### 2020/21 | |---|---|---| | Savings allowance basic rate | £1,000 | £1,000 | | Savings allowance higher rate | £500 | £500 | *A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band.* ## Dividend income | | **2021/22** | **2020/21** | |---|---|---| | Dividend allowance | £2,000 | £2,000 | | Dividend ordinary rate | 7.5% | 7.5% | | Dividend upper rate | 32.5% | 32.5% | | Dividend additional rate | 38.1% | 38.1% | ## Personal allowances | | **2021/22** | **2020/21** | |---|---|---| | **Personal allowance** | £12,570 | £12,500 | | **Personal allowance income limit** | £100,000 | £100,000 | | **Marriage allowance** Transferable between certain spouses where neither pay tax above the basic rate | £1,260 | £1,250 | | **Married couple’s allowance** (relief given at 10%) Either partner born before 6 April 1935 • minimum amount • income limit | £9,125 £3,530 £30,400 | £9,075 £3,510 £30,200 | | **Blind person’s allowance** | £2,520 | £2,500 | ## Scottish income tax rates and bands Savings and dividend income are taxed using UK rates and bands. | **2021/22** | | **2020/21** | | |---|---|---|---| | **Band £** | **Rate %** | **Band £** | **Rate %** | | 0 – 2,097 | 19 | 0 – 2,085 | 19 | | 2,098 – 12,726 | 20 | 2,086 – 12,658 | 20 | | 12,727 – 31,092 | 21 | 12,659 – 30,930 | 21 | | 31,093 – 150,000 | 41 | 30,931 – 150,000 | 41 | | Over £150,000 | 46 | Over 150,000 | 46 | ## Welsh income tax rates Although income tax for Wales has been devolved, Welsh resident taxpayers continue to pay the same overall rates as taxpayers in England and Northern Ireland. ## Employment ## The Coronavirus Job Retention Scheme (JRS) The current JRS allows an employer to place an employee on furlough and apply for a grant to cover wage costs for the time an employee is on furlough. The employer: - can claim 80% of ‘usual salary’ for hours not worked, up to a maximum of £2,500 per employee (pro-rated for hours not worked) per month - needs to fund employer National Insurance contributions (NICs) and the minimum employer automatic enrolment pension contributions. In December 2020, the Chancellor extended the scheme until the end of April 2021. ### Further extension of JRS In Budget 2021 the Chancellor has further extended the scheme to 30 September 2021. The level of grant available to employers under the scheme will stay the same until 30 June 2021. From 1 July 2021, the level of grant will be reduced and employers will be asked to contribute towards the cost of furloughed employees’ wages. To be eligible for the grant an employer must continue to pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough. The reduction in the level of the grant means that the percentage recovery of furloughed wages will be as follows: - for July 2021 70% of furloughed wages up to a maximum of £2187.50 and - for August and September 2021 60% of furloughed wages up to a maximum of £1,875.00. Employers will need to continue to fund employer NICs and mandatory minimum automatic enrolment pension contributions. | ### Comment | |---| | The Chancellor has also extended eligibility for the scheme. For periods starting on or after 1 May 2021, employers can claim for employees who were employed on 2 March 2021, as long as a PAYE Real Time Information (RTI) submission was made between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. | ## Apprenticeships and traineeships ### High quality traineeships for young people The government will provide an additional £126 million in England for high quality work placements and training for 16-24 year olds in the 2021/22 academic year. Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee. ### Payments for employers who hire new apprentices The government will extend and increase the payments made to employers in England who hire new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme. This is in addition to the existing £1,000 payment the government provides for all new 16-18 year-old apprentices and those aged under 25 with an Education, Health and Care Plan, where that applies. ### Supporting apprenticeships across different employers The government will introduce a £7 million fund from July 2021 to help employers in England set up and expand portable apprenticeships. This will enable people who need to work across multiple projects with different employers to benefit from the high quality long-term training that an apprenticeship provides. ## Off-payroll working in the private sector New tax rules are soon to come into force for individuals who provide their personal services via an ‘intermediary’ to a medium or large business. The new rules apply to payments made for services provided on or after 6 April 2021. The off-payroll working rules apply where an individual (the worker) provides their services through an intermediary (typically a personal service company) to another person or entity (the client). The client will be required to make a determination of a worker’s status and communicate that determination. In addition, the fee-payer (usually the organisation paying the worker’s personal service company) will need to make deductions for income tax and NICs and pay any employer NICs. In the Budget the government announced minor technical changes to improve the operation of the rules, in response to feedback from stakeholders, which will be legislated for in Finance Bill 2021. The government will make changes to the rules regarding provision of information by parties in the labour supply chain. | ### Comment | |---| | These changes will make it easier for parties in a contractual chain to share information relating to the off-payroll working rules by allowing an intermediary, as well as a worker, to confirm if the rules need to be considered by the client organisation. | ## Van benefit charge nil-rating for zero-emission vans From 6 April 2021, a nil rate of tax applies to zero-emission vans within the van benefit charge. In 2020/21 such vans have a van benefit charge at 80% of the standard flat rate of £3,490. ## Temporary changes to legislation resulting from coronavirus ### Easement for employer-provided cycles exemption The government will legislate in Finance Bill 2021 to introduce a time-limited easement to the employer-provided cycle exemption to disapply the condition which states that employer-provided cycles must be used mainly for journeys to, from, or during work. The easement will be available to employees who have joined a scheme and have been provided with a cycle or cycling equipment on or before 20 December 2020. The change will have effect on and after Royal Assent of Finance Bill 2021 and be in place until 5 April 2022, after which the normal rules of the exemption will apply. ### Employer-reimbursed coronavirus tests The government will legislate in Finance Bill 2021 to introduce a retrospective income tax exemption for payments that an employer makes to an employee to reimburse for the cost of a relevant coronavirus antigen test for the tax year 2020/21. Legislation will extend this exemption for the tax year 2021/22. The change will have effect on and after Royal Assent of Finance Bill 2021. The corresponding NICs disregard is already in force and this will also be extended for the tax year 2021/22. ### Extension of income tax exemption for COVID-19 related home office expenses The government will, by secondary legislation, extend the temporary income tax exemption and Class 1 NICs disregard for employer reimbursed expenses that cover the cost of relevant home office equipment. The extended exemption will have effect until 5 April 2022. ## National Insurance ### 2021/22 Class 1 (employed) rates | ### Employee | ### | ### Employer | | |---|---|---|---| | **Earnings per week** | % | **Earnings per week** | % | | Up to £184 | 0 | Up to £170 | 0 | | £184.01 – £967 | 12 | Over £170 | 13.8 | | Over £967 | 2 | | | *Entitlement to contribution-based benefits for employees retained for earnings between £120 and £184 per week.* *The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £967 per week.* | **Class 1A (employers)** | On employee taxable benefits | 13.8% | |---|---|---| | **Class 1B (employers)** | On PAYE Settlement Agreements | 13.8% | | **Class 2 (self-employed)** | Flat rate per week | £3.05 | | | Small profits threshold | £6,515 per annum | | **Class 3 (voluntary)** | Flat rate per week | £15.40 | | **Class 4 (self-employed)** | On profits between £9,568 – £50,270 | 9% | | | Excess over £50,270 | 2% | ## Minimum Wage Increases in the National Minimum Wage and National Living Wage rates occur in April each year. | **Age** | ### NLW | ### 21 – 22 | ### 18 – 20 | ### 16 and 17 | ### Apprentices | |---|---|---|---|---|---| | From 1 April 2021 | £8.91 | £8.36 | £6.56 | £4.62 | £4.30 | *Apprentice rates apply to those under 19, or 19 or over and in the first year of their apprenticeship.* ## Tax and Travel ## Mileage rates Changes to the HMRC business mileage rates are announced from time to time. The fuel only advisory rates below relate to company cars only and apply from 1 March 2021. | ### Car – fuel only advisory rates Engine capacity | ### Petrol | ### Diesel | ### LPG | |---|---|---|---| | 1400cc or less | 10p | 9p | 7p | | 1401cc to 1600cc | 12p | 9p | 8p | | 1601cc to 2000cc | 12p | 11p | 8p | | Over 2000cc | 18p | 12p | 12p | For those using their own vehicle the following mileage allowance payments apply. | ### Vehicle | ### First 10,000 miles | ### Thereafter | |---|---|---| | Car/van | 45p | 25p | | Motorcycle | 24p | 24p | | Bicycle | 20p | 20p | ## Car benefits | ### 2021/22 | ### Cars registered pre 6.4.20 | ### Cars registered after 5.4.20 | |---|---|---| | ### CO2 emissions ### (g/km) | % of list price taxed | % of list price taxed | | 0 | 1 | 1 | | 1-50 Electric range | | | | 130 or more | 2 | 1 | | 70-129 | 5 | 4 | | 40-69 | 8 | 7 | | 30-39 | 12 | 11 | | Under 30 | 14 | 13 | | 51-54 | 15 | 14 | | For every extra 5 | +1 | +1 | | 160 and above | 37 | n/a | | 165 and above | n/a | 37 | *For fully diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard) but the maximum is still 37%. For emissions over 75g/km if the CO2 figure does not end in a 5 or a 0 round down to the nearest 5 or 0.* ## Business ## Coronavirus loan schemes In 2020, the government introduced a number of government-guaranteed coronavirus loan schemes. In December 2020 the Chancellor extended, until the end of March 2021, access to the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme. Budget 2021 announced a new loan scheme to be introduced to replace those coming to an end. From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes. ## Restart Grants In addition Restart Grants will be provided in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses. This will provide the cash certainty needed to plan ahead and safely relaunch trading over the coming months. ## Self-Employment Income Support Scheme (SEISS) Budget 2021 has confirmed details of a fourth grant. This will be 80% of three months’ average trading profits to be claimed from late April 2021. Payment will be in a single instalment capped at £7,500 in total and will cover the period February to April 2021. The scheme has been extended to those who have filed a 2019/20 self assessment tax return prior to 3 March 2021. This means that the newly self-employed from April 2019 now qualify subject to satisfying the other conditions. A fifth and final grant was announced and can be claimed from late July 2021 to cover the period May to September 2021. This grant will be determined by a turnover test. Where the self-employed business turnover has fallen by 30% the grant will be worth 80% of three months’ average trading profits capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. ## Business rates Business rates have been devolved to Scotland, Northern Ireland and Wales. All four nations have introduced 100% business rates relief mainly aimed at retail, leisure and hospitality businesses. Such businesses have not had to pay business rates from 1 April 2020 to 31 March 2021. In a Scottish Budget update statement on 16 February, the Scottish Government proposed an extension to the relief for the retail, hospitality, leisure and aviation sectors until 31 March 2022. The Chancellor has now announced a continuation of 100% business rates relief for eligible retail, hospitality and leisure properties in England to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties. Following the Chancellor’s announcement, the Welsh Finance Minister has extended the rates holiday for the retail, leisure and hospitality sectors in Wales for a further 12 months. ## Reduced VAT rate for hospitality sector In July 2020, the government introduced a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation and admissions to certain attractions. In September 2020 the Chancellor extended the reduced rate to 31 March 2021. The government has now announced an extension of the reduced rate until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022. ## Corporation tax rates The main rate of corporation tax is currently 19% and it will remain at that rate until 1 April 2023 when the rate will increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate. ## Tax losses A temporary extension of the period over which businesses may carry trading losses back for relief against profits of earlier years to get a repayment of tax paid will have effect for company accounting periods ending in the period 1 April 2020 to 31 March 2022 and for tax years 2020/21 and 2021/22 for unincorporated businesses. Trade loss carry back will be extended from the current one year entitlement to a period of three years, with losses being carried back against later years first. For companies, after carry back to the preceding year, a maximum of £2 million of unused losses will be available for carry back against profits of the same trade to the earlier two years. This £2 million limit applies separately to the unused losses of each 12 month period within the duration of the extension. For individuals a separate £2 million cap will apply to the extended carry back of losses made in each of the tax years 2020/21 and 2021/22. The £2 million limit applies separately to the unused losses of each tax year within the duration of the extension. Income Tax payers will not be subject to a partnership-level limit. ## Super-deduction Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first year capital allowances. Under this measure a company will be allowed to claim: - a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances - a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances. This relief is not available for unincorporated businesses. ## First year allowances for business cars from April 2021 Budget 2020 announced the extension of 100% first year allowances for zero-emission cars, zero-emission goods vehicles and equipment for gas refuelling stations by four years from April 2021. CO2 emission thresholds will also be amended from April 2021. These determine the rate of capital allowances available through which the capital expenditure for business cars can be written down. The thresholds will be reduced from 50g/km to 0g/km for the purpose of the first year allowances for low CO2 emission cars and from 110g/km to 50g/km for the purpose of writing down allowances (WDAs) for business cars. ## Freeports In 2020 the government consulted on proposals to create up to ten Freeports across the UK. The government is now proposing a range of measures covering customs, tax reliefs, planning, regeneration funding and innovation to create Freeports as national hubs for global trade and investment across the UK. A UK Freeport will be a geographical area with a diameter up to 45km which is closely linked to a sea port, airport or rail port. East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth and South Devon, Solent, Teesside and Thames have been successful in the Freeports bidding process for England. The government is working with devolved administrations to establish Freeports in each of the nations. ### Customs benefits Within the Freeport there will be a primary customs site and perhaps custom subzones. A customs site or subzone provides customs and tariff benefits such as: - duty deferral while goods remain on site - duty inversion if the finished goods exiting the Freeport attract a lower tariff than their component parts - subject to the UK’s trade agreements, customs duty exemption on goods that are imported into a Freeport, processed into finished goods and subsequently re-exported - simplified import procedures. ### Tax benefits Freeports may also have one or more tax sites within which tax reliefs will apply. The aim is for a single site and up to three tax sites may be allowed but the total area of the site(s) must not exceed 600 hectares. The tax site will likely be located on primarily underdeveloped land to generate new, additional productive activity in Freeport locations. The intention is to offer: - Stamp Duty Land Tax relief on land purchases within Freeport tax sites in England where that property is to be used for qualifying commercial activity - a 10% rate of Structures and Buildings Allowance rather than the 3% rate that applies for businesses constructing or renovating structures and buildings for non-residential use - enhanced tax relief for qualifying new plant and machinery assets for the full cost of the qualifying investment in the same tax period the cost was incurred - 100% relief from business rates on certain business premises within Freeport tax sites in England. Very broadly, the reliefs will apply for expenditure from various dates in 2021 to 30 September 2026. In addition, a 0% rate of employer NICs on the salaries of any eligible employee working in the Freeport tax site is proposed. The relief is intended to be available for up to 9 years from April 2022. ## Research and Development (R&D) tax relief A cap on the amount of R&D tax credit which can be paid to a loss-making small or medium-sized enterprise (SME) will be introduced for accounting periods which commence on or after 1 April 2021. Prior to the introduction of the cap, loss-making SMEs incurring qualifying expenditure on R&D activities are allowed to make a claim to surrender the unrelieved loss for a payable tax credit of up to 14.5%. For accounting periods commencing on or after 1 April 2021, payable tax credits are restricted to £20,000 plus three times the company’s relevant expenditure on workers. Relevant expenditure on workers is the company’s PAYE and NICs for the period and importantly this is the company’s whole PAYE and NIC liability. In addition, if the company is supplied with workers by a connected company the relevant workers’ expenditure is extended to include a proportion of those worker costs. Some companies which create or manage intellectual property and spend less than 15% with connected persons on R&D qualifying expenditure will be exempt from this cap. ## Capital Taxes ## Capital gains tax (CGT) rates No changes to the current rates of CGT have been announced at Budget 2021. This means that the rate remains at 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains; mainly chargeable gains on residential properties with the exception of any element that qualifies for Private Residence Relief. There are two specific types of disposal which potentially qualify for a 10% rate up to a lifetime limit for each individual: - Business Asset Disposal Relief (BADR) (formerly known as Entrepreneurs’ Relief). This is targeted at directors and employees of companies who own at least 5% of the ordinary share capital in the company, provided other minimum criteria are also met, and the owners of unincorporated businesses. - Investors’ Relief. The main beneficiaries of this relief are external investors in unquoted trading companies who have newly-subscribed shares. The lifetime limit for BADR was reduced from £10 million to £1 million for BADR qualifying disposals made on or after 11 March 2020. Investors’ Relief continues to have a lifetime limit of £10 million. ## CGT annual exemption The CGT annual exemption will be maintained at the current 2020/21 level of £12,300 for 2021/22 and up to and including 2025/26. ## Inheritance tax (IHT) nil rate bands The nil rate band has been frozen at £325,000 since 2009 and this will now continue up to 5 April 2026. An additional nil rate band, called the ‘residence nil rate band’ (RNRB) which has been increased in stages and is now £175,000 for deaths in 2020/21 will also be frozen at the current level until 5 April 2026. A taper reduces the amount of the RNRB by £1 for every £2 that the ‘net’ value of the death estate is more than £2 million. Net value is after deducting permitted liabilities but before exemptions and reliefs. This taper will also be maintained at the current level. ## Business assets and Gift Hold-Over Relief Gift Hold-Over Relief operates by deferring the chargeable gain on the disposal when a person gives away business assets. The gain then comes into charge when the recipient disposes of the gifted asset. The recipient is treated as though they acquired the asset for the same cost as the person who gave them the asset. A change to the relief ensures that Gift Hold-Over Relief is not available where a non-UK resident person disposes of an asset to a foreign-controlled company, controlled either by themselves or another non-UK resident with whom they are connected. This measure will affect disposals made on or after 6 April 2021. ## Other Matters ## Land and buildings transaction taxes Land and buildings transaction taxes are devolved to Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax). Stamp Duty Land Tax (SDLT) applies to transactions in England and Northern Ireland. All these taxes have had a temporary increase in the nil rate threshold for residential properties. The thresholds were set to return to the previous thresholds from 1 April 2021. ### Budget announcement The government will extend the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland to 30 June 2021. From 1 July 2021 until 30 September 2021, the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 from 1 October 2021. ### Wales – Land Transaction Tax Following the Chancellor’s announcement, the Welsh Finance Minister has confirmed that the Land Transaction Tax temporary reduction period will be extended by a further three months so that it will end on 30 June 2021. In December 2020, the Welsh Government changed the rates charged on higher rates residential property transactions and non-residential transactions including the rent element of non-residential and mixed leases. The changes to the higher residential rates have the effect of increasing the tax rates applied to the bands by 1%. For non-residential transactions, changes have been made to the bands so as to increase the nil rate thresholds. These changes came into effect on 22 December 2020. ## SDLT surcharge New SDLT rates are proposed for purchasers of residential property in England and Northern Ireland who are not resident in the UK. The new rates will be 2% higher than those that apply to purchases made by UK residents, and will apply to purchases of both freehold and leasehold property as well as increasing SDLT payable on rents on the grant of a new lease. The surcharge will apply to land transactions with an effective date of 1 April 2021 or later. Transitional rules may apply to some contracts exchanged before 11 March 2020 but completed or are substantially performed on or after 1 April 2021, or some contracts substantially performed on or before 31 March 2021 but not completed until 1 April 2021 or later. ## Contactless payment card limit Following a public consultation by the Financial Conduct Authority, the government has approved an increase to the legal contactless payment limits previously set by the European Commission. This will allow banks to support single contactless payments up to £100, and cumulative contactless payments up to £300, without the need for customers to input their chip and pin. The government hopes the banking industry will implement the new limits later this year. ## Duties ## Alcohol and tobacco duties The duty rates are frozen for beer, spirits, wine and made-wine, still and sparkling cider and perry. The duty rate on all tobacco products has also been frozen. ## Fuel duty Fuel duty will be frozen for the 2021/22 tax year. **What They Said…** ‘We need a real commitment to give every business, large or small, the opportunity to grow, innovate and succeed. This future economy won’t be created in any one Budget, but today we lay the foundations.’ **Rishi Sunak, Chancellor of the Exchequer** ‘We needed a Budget to fix our economy… to build a more secure and prosperous economy for the future. Instead we got a Budget that papered over the cracks rather than rebuilding the foundations.’ **Keir Starmer, Leader of the Labour Party** ‘The Chancellor has gone above and beyond to protect UK businesses and people’s livelihoods through the crisis and get firms spending.’ **Tony Danker, Director General of the Confederation of British Industry** ‘Extensions to furlough, business rates relief and VAT reductions give firms a fighting chance not only to restart but also to rebuild.’ **Dr Adam Marshall, Director General of the British Chambers of Commerce** ‘The continuation of business rates and VAT discounts is critical, and it’s important that those in supply chains benefit from them, not just those that neatly fit the definitions of frontline retail, leisure and hospitality.’ **Mike Cherry, National Chairman of the Federation of Small Businesses Thus budget was prepared immediately after the Chancellor’s Budget Statement based on official press releases and supporting documentation. The Budget proposals are subject to amendment before the Finance Act receives Royal Assent. This Report is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. **Categories:** Budget, News, Tax **Tags:** Kerry Newman --- ### [How to improve cashflow in your contracting business](https://sg-accounting.co.uk/blog/how-to-improve-cashflow-in-your-contracting-business/) **Published:** September 3, 2019 **Author:** Kerry Newman **Content:** According to research 8 out of 10 businesses fail within their first two years of operating. The number one reason is poor cashflow. The company could be making huge sales, but if their overheads are equally large or if their customers aren’t paying their invoices on time, the company could easily find themselves in financial difficulty. If you’re an independent contractor working through your own limited company, managing cashflow is particularly important, as one late invoice or a missed payment by a client could leave you in a dire financial state. However, there’s no need to panic, as this article discusses the importance of good cashflow and suggests ways to manage and improve your contracting business’ cashflow. ![Money on a black background.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/money.jpg "money | SG Accounting") ## Why does good cashflow matter? In accounting terms, cashflow is ‘the difference in the amount of cash which is available at the beginning of a period (opening balance) and at the end of the period (closing balance).’ Positive cashflow is what every business should be aiming for and it’s achieved when you have more money coming into the business, than what is going out. Having a good cashflow enables you; to pay yourself a salary and or dividends, re-invest money back into your limited company and provide a buffer so you have something to live off during the lean times when you don’t have any contract work. ## How to improve your cashflow As a contractor there are some simple but highly effective steps you can take to improve your contracting business’ cashflow, these include: ## Invoicing on time ![Invoices on desk with calculator.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/invoicingontime.jpg "invoicingontime | SG Accounting") If you know you have to submit invoices by a certain date to get paid, do it! Submitting invoices late, either causes hassle for the finance department (and they’re the one department you want to keep on your side), or it means you might not get paid that week or month. Online accounting software, like FreeAgent or Xero, takes the hassle out of invoicing and depending on which software you use, you can even set up recurring invoices. ## Cutting back on expenses Audit your expenses to see what your biggest or most frequent expenses are and find ways to reduce it. For example, if you’re paying out a fortune each month on insurance, could you reduce this by swapping suppliers? ## Carefully choosing your clients In the early days of contracting, it can be tempting to take every contract that comes your way, but experience tells you that not every client is what they seem. If you have reservations about a client or have had a bad dealing with them in the past, running a credit check may either give you peace of mind or tell you to avoid them at all costs. Alternatively, if you really want to work with a business but want to make sure you’re financially covered, charge an upfront 50% deposit. ## Building your network Every contractor goes through a period where they’re not working. It’s just part of being a contractor, but you can try to minimise this by building a solid network who can help you find work. This network can be made up of various people; recruiters, past clients, ex-colleagues and/or other contractors. ![Building a network.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/networking.jpg "networking | SG Accounting") Keep in regular touch, either through phone, email or social media (whatever works for you) to let them know about your availability. ### For further ideas on how to improve cashflow or for other financial and tax advice, speak to one of our Directors on 01962 867550 or send us a message via our website and we’ll call you back. **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [Coronavirus business support – FAQ](https://sg-accounting.co.uk/blog/coronavirus-business-support-faq/) **Published:** March 31, 2020 **Author:** Kerry Newman **Content:** With Covid-19 (Coronavirus) having a massive impact on businesses across the UK, it’s understandable that our Limited Company contractors are keen to understand the business support measures that have been announced by the Government. We’ve created a guide to all of the measures that can be read [here](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/), and below you can read the answers to most frequently asked questions that we are getting from our clients: ## **Can I claim the self employed business support package?** The government has announcement a [self-employed business support package](https://www.gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals), however it is not applicable to those that take dividend income from their companies. It only applies to those that file self-employed pages through self-assessment rather than those than operate via their own ltd company. If you have recently moved from self-employed to Limited and filed a self assessment tax return for 2018/19 that had the self employed pages completed, with profits less than £50,000, then you will be eligible and HMRC will be in touch with you in due course. If you became self employed from 6 April 2019 onwards, unfortunately you will not be able to claim any support through this package. Those who pay themselves a salary and dividends through their own company are not covered by the scheme but may be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes and out of contract. This can be claimed by making yourself a ‘furloughed worker’ (see more on this below) and paid via the company payroll we operate but won’t be available to claim until the end of April at the earliest. It will cover 1st March to 31st May and will pay out 80% of the salary that was paid in February 2020. The salary cannot be amended for February 2020 or additional employees added. ## **How do I make myself a furloughed worker? And what do I do next about this?** Under the Government’s Coronavirus business support measures, it has been indicated that some Limited Company contractors may be covered by the ‘Job retention scheme’ and therefore can furlough themselves if unable to work due to Covid-19. The scheme covers Directors who are no longer earning through their Limited Company. If you are still in contract and have income coming into the company then you will not be covered. The job retention scheme allows an employer to “furlough” (temporarily lay off) a worker between 1 March 2020 and 31 May 2020 (although Rishi Sunak has announced this will be extended if needed). This is designed to help employers pay 80% of the salary of employees and is subject to a cap of £2,500 per month per employee. To take advantage of the job retention scheme, your business will need to designate you (the employee) as a “furloughed worker” and submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). This system is being urgently set up as the existing HMRC systems cannot deal with these payments. It is not expected to be set up before the end of April 2020. ## **What can I do right now?** ***If you want to furlough yourself under the job retention scheme:*** At the moment, the Coronavirus Job Retention Scheme is being developed and launch is planned for around the end of April 2020. There is no relief currently available however you can collate the information you’ll need to submit: - the number of employees being furloughed - the claim period (start and end date) - amount claimed (the minimum length of furloughing is 3 weeks) - your bank account number and sort code - your contact name - your phone number This will only apply to those who were on the payroll as at 28 February 2020 and have not been able to work at all in this period due to COVID-19. If you have been able to work but on reduced hours, then unfortunately you will not be able to claim any support through the Coronavirus Job Retention Scheme. ***If you want to claim through the self-employed business support scheme:*** It seems that any funding will not be available until June 2020. Therefore in the interim if you need support you can look at deferring the second payment on account due by 31 July 2020. Other options available are to [defer VAT payments](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/#2) and discuss with HMRC if necessary any time to pay arrangements if you can’t pay any tax liabilities on time. HMRC’s dedicated helpline to discuss this further is 0800 0159 559. Plus, there are further options to claim universal credit or loan funding through the [business interruption loan scheme.](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/#10) ## **My contract has been cancelled or deferred what shall I do?** It seems that a lot of people are in the same boat as you, and whilst contracts are being deferred it is probable that no employment roles will be offered either. We expect most contractors in this position will see their contracts reinstated once the lockdown restrictions have been lifted. In the meantime, we’re advising clients to take advantage of the business support measures set out above where they can. As and when we do have further information on schemes available, we will be updating our main guide [here](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/), so please bookmark the page. **Categories:** Coronavirus --- ### [Mini Budget September 2022](https://sg-accounting.co.uk/blog/mini-budget-september-2022/) **Published:** September 26, 2022 **Author:** Kerry Newman **Content:** ## **The mini budget – what it means for contractors** Well that was a big U-TURN affecting the contracting industry! The (not so) mini-budget delivered by new Chancellor, Kwasi Kwarteng last Friday, had a lot more in it than anyone expected. Repeal of the IR35/off-payroll working legislation from April 2023 is welcome news for our industry. Since 2017 for the Public Sector, and 2021 in the Private Sector, the end client has been responsible for determining the IR35 status of their contractors, with many taking a risk-averse approach to doing so, to the extent of banning Limited Company contractors altogether in some cases. However, from April 2023, the responsibility will return to the contractor, leading to an opening up of the market. On top of this big IR35 news we’ve also summarised the other changes below: - Corporation Tax planned increase from 19% to 25% has been scrapped - Basic rate of income tax reduced from 20% to 19% from April 2023 - Reversal of the 1.25% increase in the dividend tax rate from 2023 - Additional rate of income tax of 45% has been scrapped - NI (health and social care levy) increase of 1.25% has been repealed from 6th November 2022 - AIA remains at £1m indefinitely - Stamp duty 0% threshold increased to £250,000. This is a saving of £2,600 on an average house costing £312,000 - Freeze on energy bills - Rules on bankers’ bonus limits are to be scrapped - IR35-off-payroll rules to be repealed from April 2023. Reverting to pre-2017 rules For a more detailed look at the mini budget and what was announced, take a look below. ### Chancellor reveals his plan for growth The week leading up to Chancellor Kwasi Kwarteng’s ‘Mini Budget’ may have been a short one due to the Queen’s funeral but the new government managed to fill it with a stream of policy announcements. Before Mr Kwarteng stood up to make his statement on ‘The Growth Plan’ much of what he had to say about energy support for businesses and households, bankers’ bonuses, investment zones and reversals to NICs had already been announced. The government also said that the Chancellor’s statement would not be subject to a forecast from the Office for Budget Responsibility. However, this did not stop the media from dubbing this event a Mini Budget. The Growth Plan set out a new approach to the economy built around three central priorities: - reforming the supply-side of the economy - maintaining a responsible approach to public finances - cutting taxes to boost growth. ## National Insurance contributions In September 2021 the government published its proposals for new investment in health and social care in England. The proposals were intended to lead to a permanent increase in spending not only in England but also by the devolved governments. To fund the investment the government introduced a UK-wide 1.25% Health and Social Care Levy based on the National Insurance contributions (NICs) system but ringfenced for health and social care. The Health and Social Care Levy Act provided for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23. From April 2023 onwards, the NIC rates were intended to revert back to 2021/22 levels and be replaced by a new 1.25% Health and Social Care Levy. However, the new Chancellor has decided to: - reverse the temporary increase in NICs from November and - cancel the Health and Social Care Levy completely. The Health and Social Care Levy was expected to raise around £13 billion a year to fund health and social care and the Chancellor has confirmed that funding will be maintained at the same level as if the Levy was in place, funded from general taxation. | ### Comment | |---| | According to the government, not proceeding with the Levy will reduce tax for 920,000 businesses by nearly £10,000 on average next year. For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24. In addition, it will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year. | ### More detail for employees and employers The changes take effect for payments of earnings made on or after 6 November 2022, so: - primary Class 1 NICs (employees) will generally reduce from 13.25% to 12% and 3.25% to 2% and - secondary Class 1 NICs (employers) will reduce from 15.05% to 13.8%. The effect on Class 1A (payable by employers on taxable benefits in kind) and Class 1B (payable by employers on PAYE Settlement Agreements) NICs will effectively be averaged over the 2022/23 tax year, so that the rate will generally be 14.53%. | ### Comment | |---| | The government hopes that most employees will receive the NICs reduction directly via the payroll in their November pay but acknowledges that some will have to wait until December or January, depending on the complexity of their employer’s payroll software. | ### More detail for the self-employed Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%. ## Income tax ### Income tax rates The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This is now being accelerated so that it takes effect from April 2023. | ### Comment | |---| | The government states that this reduction is worth over £5 billion for workers, savers and pensioners. Also, that 31 million taxpayers will benefit in 2023/24, with an average gain of £170. | In addition, to ‘incentivise enterprise and hard-work and simplify the tax system’, the government will abolish the 45% additional rate of income tax from April 2023. Consequently, there will be a single higher rate of income tax of 40%. | ### Comment | |---| | These changes will generally apply to taxpayers in England, Wales and Northern Ireland. It remains to be seen what the Scottish government will do in relation to the setting of rates on non-savings income. | There are a number of tax consequences which stem from these changes. One of them is the amount of tax relief given at source on pension contributions and Gift Aid donations. This is currently given at the basic rate of 20%. The government has stated that there will be a four-year transition period for Gift Aid relief to maintain the income tax basic rate relief at 20% until April 2027. This will support almost 70,000 charities and is worth over £300 million. However, there was little comment on pension contributions other than that there will also be a one-year transitional period for Relief at Source pension schemes to permit them to continue to claim tax relief at 20%. ### Dividends From April 2023: - the dividend ordinary rate of 8.75% will reduce to 7.5% - the dividend upper rate of 33.75% will reduce to 32.5% and - the dividend additional rate will be abolished. As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, it will also reduce to a 32.5% charge for loans made on or after 6 April 2023. These changes will apply in Scotland as the rules on dividends apply to the whole of the UK. ## Business ### Corporation tax rates It had been previously announced that the rate of corporation tax would increase for many companies from April 2023 to 25%. This change will now not go ahead, leaving the rate of corporation tax at 19% for the majority of companies. | ### Comment | |---| | The 19% UK corporation tax rate is significantly lower than the rest of the G7 and the lowest in the G20. | In line with this change, the Bank Corporation Tax Surcharge will remain the same, as will the Diverted Profits Tax. ### Capital allowances The Annual Investment Allowance (AIA) gives a 100% write-off on certain types of plant and machinery, including cars with zero emissions, up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur. Up to 31 March 2023, companies investing in qualifying new plant and machinery are able to benefit from capital allowances, generally referred to as ‘super-deductions’. These reliefs are not available for unincorporated businesses. Interestingly, these allowances were not mentioned, other than minor amendments to the current rules, so it appears the scheduled withdrawal of them will occur in 2023. | ### Comment | |---| | Businesses incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. | ### Seed Enterprise Investment Scheme From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from two to three years. To support these increases, the annual investor limit will be doubled to £200,000. ### Company Share Option Plan From April 2023, qualifying companies will be able to issue up to £60,000 of Company Share Option Plan (CSOP) options to employees, twice the current £30,000 limit. The ‘worth having’ restriction on share classes within CSOP will be eased, better aligning the scheme rules with the rules in the Enterprise Management Incentive scheme and widening access to CSOP for growth companies. ### Investment Zones aim to encourage rapid development As part of the government’s plan to drive economic growth and encourage development the Chancellor confirmed that Investment Zones will be established across the UK. These zones will benefit from lower taxes and liberalised planning frameworks to encourage business investment. The government is already in discussions with 38 local authorities to establish investment zones in England. In addition, it says it will work closely with the devolved administrations to offer the same opportunities in Scotland, Wales and Northern Ireland. Businesses in designated areas in investment zones will benefit from 100% business rates relief on newly occupied and expanded premises. In addition, businesses will receive full Stamp Duty Land Tax relief on land bought for commercial or residential development and a zero rate for employer NICs on new employee earnings up to £50,270 per year. There will also be a 100% first year enhanced capital allowance relief for plant and machinery used within designated sites and accelerated Enhanced Structures and Buildings Allowance relief of 20% per year. As well as time-limited tax benefits there will be designated development sites that will release more land for housing and commercial development in the zones. The need for planning applications will be minimised and streamlined. ## Stamp Duty Land Tax A number of changes are made to the Stamp Duty Land Tax (SDLT) regime. Generally, the changes increase the amount that a purchaser can pay for residential property before they become liable for SDLT. The residential nil rate tax threshold is increased from £125,000 to £250,000. The nil rate threshold for First Time Buyers’ Relief is increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief is increased to £625,000. The changes apply to transactions with effective dates on and after 23 September 2022 in England and Northern Ireland. These changes do not apply to Scotland or Wales which operate their own land transactions taxes. There are no changes in relation to purchases of non-residential property. | **Residential** **Band £** | **Rate** **%** | **Non-residential** **Band £** | **Rate** **%** | |---|---|---|---| | 0 – 250,000 | 0 | 0 – 150,000 | 0 | | 250,001 – 925,000 | 5 | 150,001 – 250,000 | 2 | | 925,001 – 1,500,000 | 10 | Over 250,000 | 5 | | Over 1,500,000 | 12 | | | Residential rates may be increased by 3% where further residential properties are acquired. ## Other comments There were a number of other interesting comments made by the Chancellor which suggest future policies and changes, although lacking detail at the moment. ### IR35 and off-payrolling Over the last 20 years, there have been numerous changes to the tax system to try and address ‘disguised employment’ and to generate additional tax and NICs accordingly. In a surprise announcement, the government has stated that it will repeal the off-payroll working rules from 6 April 2023. From this date, workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs. | ### Comment | |---| | According to the government, this will free up time and money for businesses that engage contractors, that could be put towards other priorities. The change will also reduce the risk that genuinely self-employed workers are impacted by the off-payrolling rules. | ### Infrastructure The Chancellor announced plans to accelerate new roads, rail and energy infrastructure with new legislation which will cut barriers and restrictions. This will make it quicker to plan and build new roads, speeding up the deployment of energy infrastructure such as offshore wind farms and streamlining environmental assessments and regulations. | ### Comment | |---| | According to the government, in 2021 it took 65% longer to get consent for major infrastructure projects than in 2012. | ### State benefits Universal Credit claimants who earn less than the equivalent of 15 hours a week at the National Living Wage will be required to meet regularly with their work coach and take active steps to increase their earnings or face having their benefits reduced, broadly from January 2023. Jobseekers over the age of 50 will also be given extra time with Jobcentre work coaches, to help them return to the job market. ### VAT-free shopping areas The government will introduce a modern, digital, VAT-free shopping scheme with the aim of providing a boost to the high street and creating jobs in the retail and tourism sectors. The delivery will include modernising the scheme that currently operates in Northern Ireland and introducing a new digital scheme in Great Britain. The new VAT-free shopping scheme for non-UK visitors to Great Britain will enable them to obtain a VAT refund on goods bought in the high street, airports and other departure points and exported from the UK in their personal baggage. ### Alcohol duties Reforms to modernise alcohol duties will also be taken forward and the government has published a consultation response on these plans. The reforms will be implemented from 1 August 2023. The government is also freezing the alcohol duty rates from 1 February 2023 to provide additional support to the sector. ### Further announcements Over the next few weeks, the government will set out further details of plans to speed up digital infrastructure, reform business regulation, increase housing supply, improve our immigration system, make childcare cheaper, improve farming productivity and back the financial services sector. ## Government announces plans to help cut energy bills for businesses On 21 September 2022 the government announced a new scheme, the Energy Bill Relief Scheme, which is designed to cut energy prices for non-domestic energy customers, such as businesses, charities and public sector organisations. The new scheme is in addition to the recently announced Energy Price Guarantee for households. The scheme will apply to fixed contracts agreed on or after 1 April 2022 in addition to deemed, variable and flexible tariffs and contracts. Running for an initial six-month period, the scheme will apply to energy usage from 1 October 2022 to 31 March 2023. According to the government, savings will first be seen in businesses’ October bills. Businesses are not required to take action or apply for the scheme, support will be automatically applied to bills. The government intends to conduct a review of the scheme in three months to assess: - how effective it has been in giving support to vulnerable, non-domestic customers - which groups of non-domestic customers remain vulnerable to energy price rises - the extent to which the scheme could either be extended or further targeted. Support after 31 March 2023 will be determined following the review. ## Energy Price Guarantee plan caps household bills Prime Minister Liz Truss announced the Energy Price Guarantee (EPG) for households on 8 September 2022 which will apply from the start of October 2022. The EPG means that an average household will pay no more than £2,500 per year for each of the next two years. It comes in addition to the £400 Energy Bill Support Scheme and will save the average household at least £1,000. The EPG limits the price suppliers can charge customers for energy supplies. This takes account of temporarily removing green levies, worth around £150, from household bills. The guarantee will supersede the existing energy price cap. Under the plan, those households who do not pay directly for mains gas and electricity, such as those living in park homes or on heat networks, will be no worse off and will receive support through a new fund. The government estimates that the EPG will deliver substantial benefits to the economy, boosting growth and curbing inflation by four to five percentage points, which will in turn reduce the cost of servicing the national debt. The government will provide energy suppliers with the difference between this new lower price and what energy retailers would charge their customers if this were not in place. Schemes previously funded by green levies will also continue to be funded by the government during this two-year period to ensure the UK’s investment in homegrown, secure renewable technologies continues. ## New plan for patients aims to tackle NHS backlog Health and Social Care Secretary Thérèse Coffey unveiled the government’s new ‘Our plan for patients’ on 22 September 2022, which aims to tackle NHS backlogs. The centrepiece of the plan is the expectation that everyone who needs an appointment at a GP practice should get one within two weeks, with patients with the most urgent needs being seen the same day. The plan also includes changing funding rules to recruit extra support staff so that GPs can focus on treating patients. The government says this will free up over one million appointments per year. There will also be ‘more state-of-the art telephone’ systems to make it easier for patients to get through to their GP surgeries. In addition, more information will be available for patients, with appointments data published at a practice level for the first time ever. Pharmacies will help ease pressures on GPs and free up time for appointments by managing and supplying more medicines without a GP prescription and taking referrals from emergency care for minor illnesses. **Categories:** Budget, Finance, News, Tax **Tags:** budget, Kerry Newman --- ### [The Autumn Budget 2024](https://sg-accounting.co.uk/blog/the-autumn-budget-2024/) **Published:** October 30, 2024 **Author:** Kerry Newman **Content:** Forty billion pounds of tax rises represents one of the very largest tax rising Budgets outside of a time of recession, with Rachel Reeves announcing a compendium of changes aimed at businesses and higher tax payers. A penny off a pint and frozen fuel duty will be small comfort for some, with the following headlines affecting contractors and small business owners in the UK. (Don’t forget to follow our socials for more detail in the coming days.) **National Living Wage** Minimum wages will rise in April 2025, with rates for over-21 is set to go up from £11.44 to £12.21 an hour. For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10. The government will be working towards a single adult rate over time. Apprenticeship wages will go up from £6.40 to £7.55 an hour. **Employers National Insurance contributions** Employers’ National Insurance contributions will rise from 13.8% to 15% from April 2025.In addition, the threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000. To protect smaller businesses, the employment allowance will increase from £5,000 to £10,500. There will be no changes to employee NI, VAT or income tax. In addition, there will be no extension of the freeze in income tax and National Insurance thresholds beyond the decisions of the previous government meaning that from 2028-29, personal tax thresholds will be uprated in line with inflation. **Business Asset Disposal Relief** Business Asset Disposal Relief will remain at 10% for the remainder of the year, then increase to 14% from 25/26 and then 18% from 26/27 onwards. The lifetime limit will remain at £1 million. **Capital Gains Tax** Capital gains tax will increase to 18% on lower rate and 24% on higher rate with immediate effect. This tax is charged on profits which are made from selling assets, such as investments, including shares. The lower rate of Capital Gains Tax will rise from 10% to 18%, and the higher rate from 20% to 24%. On the sale of second residential properties, CGT will remain at 18% and 24%. **Inheritance tax** The budget will extend the inheritance tax threshold freeze for a further two years to 2030. That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax free allowance is passed to a surviving spouse or civil partner. Inherited pensions will be bought into inheritance tax from April 2027. **Electric Vehicles** The Budget will maintain existing incentives for EVs in company car tax from 2028. It will also increase the differential between fully electric and other vehicles in the first rates of Vehicle Excise Duty beginning in April 2025. **Non-Dom** The government will abolish the non-dom tax regime and remove the “outdated concept” of domicile from the tax system from April 2025. This applies to a UK resident whose permanent home – or domicile – for tax purposes is outside the UK. It means they do not pay UK tax on money they make elsewhere in the world. A new, residence-based scheme with “internationally competitive arrangements” for those coming to the UK on a temporary basis will be introduced. The Office for Budget Responsibility say that this package of measures will raise £12.7bn over the next five years. **Stamp Duty** There will be an increase in second homes stamp duty from 3% to 5% **Schools** VAT will be introduced on private school fees from January 2025, and that the government will also introduce legislation to remove their business rates relief from April 2025. **Pensions** 2025/26 uprated by 4.1% That will follow a government commitment to the triple lock. Spending on the state pension is projected to rise 4.1% in 2025-26 – that is a £470 increase for over 12 million pensioners in the UK, Reeves says. ## **The Budget 2024 – Full Report** The Chancellor of the Exchequer, Rachel Reeves came to Parliament to deliver her first Budget. The Chancellor’s stated aim with this Budget was to “fix the foundations and deliver change” and “invest, invest, invest”. To do this there would be a need to raise an additional £40 billion in taxes. Here are some of the main announcements from the UK Autumn Budget. **Personal Tax** The Labour Government will retain the Personal Tax Allowance and Basic rate band announced by the previous Government until 2028, after which they will increase with inflation. Personal allowances will still be reduced by £1 for every £2 a person’s income exceeds £100,000. | **Band** | **Taxable income** | **2025/26** | **2024/25** | |---|---|---|---| | Allowance | £0 to £12,570 | 0% | 0% | | Basic | £12,571 to £50,270 | 20% | 20% | | Higher | £50,271 to £125,140 | 40% | 40% | | Additional | Over £125,140 | 45% | 45% | It is worth noting the Scottish Parliament has had the power for a number of years to vary the tax rates and thresholds of Non-Savings, Non-Dividend income for Scottish taxpayers. The differential between Scotland and the rest of the UK in this respect has grown quite significantly. The Wales Act 2014 gave the National Assembly of Wales the power to vary the tax rates in respect of Welsh resident taxpayers as regards Non-Savings and Non-Dividend income. However, to date they have continued to set income tax rates in line with those announced by the UK Government. The Welsh Government will publish their draft budget on 10th December 2024. **Scottish Tax Rate Bands** The Scottish Budget is set for 4th December 2024. The Scottish Parliament have previously announced the tax rates and thresholds for Scottish Taxpayers for the tax year starting 6 April 2024. Scottish tax rates 2024/25 for non-savings, non dividend income | **Band** | **Taxable income** | **2024/25** | |---|---|---| | Allowance | £0 to £12,570 | 0% | | Starter rate | £12,571 to £14,876 | 19% | | Basic rate | £14,877 to £26,561 | 20% | | Intermediate rate | £26,562 to £43,662 | 21% | | Higher rate | £43,663 to £75,000 | 42% | | Advanced rate | £75,001 to £125,140 | 45% | | Top rate | Over £125,140 | 48% | **Tax tip** **If you are a sole trader or property landlord and your turnover exceeds £50,000 during the 2024/25 tax year you may fall under Making Tax Digital for Income Tax rules from April 2026 which includes quarterly reporting. If you are both a sole trader and a property landlord then aggregate the two turnovers together when applying the £50,000 threshold. Are you ready for this? If not we can help.** **Options to consider to defer the MTD compliant requirement might be creating a partnership or incorporating the business.** **National Insurance** The Chancellor retained the current rates of National Insurance paid by employees, as well as rates for the self-employed will remain the same. From 6 April 2025, Employers National Insurance will increase to 15% from the current 13.8%. The limit from which Employers National Insurance is due will reduce from £9,100 per employee to £5,000 until 5 April 2028. **Tax tip** **It is worth reviewing your NIC records at least every 5 years, whilst it is fresh in your memory, to ensure they are correct and up to date. National Insurance contributions protect your rights to certain state benefits and contribute towards your state pension.** **Tax tip** **If you have more than one employment you may pay too much employees national insurance. HM Revenue & Customs can request the second employer to operate a lower rate to ensure the correct amount is paid. Refunds may be possible if national insurance has been overpaid in earlier years.** In addition Class 1A National Insurance will increase to 15%. This rate is payable by employers on certain benefits provided to employees. The Employment Allowance will increase from £5,000 to £10,500 from 6 April 2025 and the current restriction regarding the previous year’s liability will be removed. | **National Insurance (NI)** | **2024/25** | **2025/26** | |---|---|---| | Class 1 NI employees – earnings between £12,570 – £50,270 | 8% | 8% | | Class 1 NI employees – earnings in excess of £50,270 | 2% | 2% | | Class 1 NI employers – earnings in excess of £9,100 | 13.80% | 15% | | Class 1A Benefits in kind | 13.80% | 15% | | Class 1B NI PAYE settlement agreements | 13.80% | 15% | | Class 4 NI self-employed – Profits between £12,570 – £50,270 | 6% | 6% | | Class 4 NI self-employed earnings in excess of £50,270 | 2% | 2% | **Dividend Rate Bands** The dividend allowance will remain at £500 from 6th April 2025. There will be no change to the dividend tax rates. | **Band** | **2024/25** | **2025/26** | |---|---|---| | Dividend ordinary rate | 8.75% | 8.75% | | Dividend upper rate | 33.75% | 33.75% | | Dividend additional rate | 39.35% | 39.35% | **Tax tip** **With the dividend allowance threshold at only £500, it could be worthwhile transferring some shares to a spouse/civil partner to maximise it.** **Do you have control over when a dividend can be paid out? If so have you made use of the £500 zero rate threshold for this tax year?** **Tax tip** **There are a number of approved tax efficient share option schemes, as well as the non-tax advantages share scheme arrangements, which could be considered when looking at incentivising employees. There are different issues, benefits and problems for each type of incentive arrangement, both for the employer and the employee.** **Tax tip** **If you are an employer ensure to carry out a regular review to ensure that you are adhering to the National Minimum Wage Regulations. Failure to comply, can result in a penalty of up to 200% of the liability due and any underpayment of wages can go back up to 6 years using the current NMW rates.** **National Minimum Wage** The National Minimum Wage (NMW) and the National Living Wage (NLW) rates will increase by 6.7% from 1 April 2025. | | **Currently** | **from 1-4-25** | |---|---|---| | Worker 21 years+ | £11.44 | £12.21 | | Worker 18 – 20 | £8.60 | £10 | | Worker under 18 | £6.40 | £7.55 | | Apprentice | £6.40 | £7.55 | **Pensions** The annual pension allowance, which impacts on how much individuals can contribute to their pension schemes will remain at £60,000 for 2025/26. The Money Purchase Annual Allowance and Tapered Annual Allowance will remain at £10,000 from 6 April 2025. In addition the Tapered Annual Allowance will remain at £260,000. **Tax Tip** **It is worth having an annual pension review, to ensure you maximise the use of all the pension allowances which may be available to you and to do so in the most tax efficient way.** From 6 April 2027 the government will bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax purposes. The pension tax free lump sum percentage will remain at 25% of the pension value up to a maximum of £268,275. From 30th October 2024, pension transfers from tax relieved UK pension to Qualified Registered Overseas Pension Schemes (QROPS) in the EEA and Gibraltar will be subject to a 25% charge, unless another exclusion applies. **Tax Tip** **If you are a member of a UK registered pension scheme and are thinking of leaving the UK, you may want to consider topping up your pension scheme in the tax year in which you leave the UK in order to maximise your UK tax relief and enhance your pension provision. This should be done in conjunction with your accountant and a suitably qualified financial advisor.** **State Pension** Under the triple lock, the State Pension will rise in line with the highest of average earnings, inflation or 2.5%. The Government have announced an increase to the State Pension of 4.1%. The new State Pension increases from £221.20 to £230.30 per week in April 2025, while the full basic State Pension will increase from £169.50 to £176.45 per week. **Tax Tip** **Consider making voluntary national insurance contributions to fill gap years in your state pension history. Up until 5 April 2025 you can go as far back as April 2006. Each year would cost you just over £824. After that date you can only go back 6 tax years. The cost for each year would then be based upon the voluntary Class 3 national insurance rate applicable for that current year. Each additional year could result in an extra £342 state pension (based upon 2025/26 figures) on an annual basis.** **Capital Gains Tax** The main rates of Capital Gains Tax will increase from 10% and 20% to 18% and 24% respectively for disposals on or after 30 October 2024. The rate of Capital Gains Tax on the disposal of residential property remains the same. | **Gains for** | **Before 30 Oct 2024** | **From 30 Oct 2024** | |---|---|---| | Residential property to basic rate limit | 18% | 18% | | Residential property above basic rate | 24% | 24% | | Residential property for Trusts and personal representatives | 24% | 24% | | Other assets to basic rate limit | 10% | 18% | | Other assets above basic rate limit | 20% | 24% | | Other assets for Trusts and personal representatives | 20% | 24% | | Business Asset Disposal relief\* | 10% | 10% | | Investors relief\* | 10% | 10% | \* Business Asset Disposal relief or Investors relief rates up to lifetime limits. The lifetime limit for Investors Relief reduces to £1M from 30 October 2024. These rates will increase from 6 April 2025. **Tax Tip** **Before you sell an asset, such as shares or property, please speak to us. There may be planning opportunities prior to the sale to reduce the potential capital gains tax.** **Tax Tip** **Remember, if you are a UK resident taxpayer and sell a UK residential property, which could trigger off a gain liable to capital gains tax (CGT), to avoid penalties from arising, you need to complete a CGT Return within 60 days of completion and pay the tax over within the same time frame.** There is no change to the capital gains tax annual exempt amount available. This is the tax-free allowance available against taxable gains. | **Tax year** | **Individuals** | **Trustees** | |---|---|---| | 2024/25 | £3,000 | £1,500 | | 2025/26 | £3,000 | £1,500 | **Business Asset Disposal Relief** The rate of Capital Gains Tax which applies to Business Asset Disposal Relief and Investors Relief will increase from 10% for disposals on or after 6 April 2025 to 14%, with a further increase the following year to 18%. **Inheritance Tax** The Chancellor has retained the £325,000 Nil Rate Band, the £175,000 Residence Nil Rate Band (RNRB) and the tapering limit for RNRB at £2 million until 5 April 2030. The tax rates for Inheritance Tax remain unchanged, with the main rate staying at 40%. From 6 April 2026, the 100% rates of Agricultural Property Relief and Business Property Relief will be restricted to the first £1 million of combined agricultural and business property, with the excess relieved at 50%. Agricultural Property Relief (APR) is a relief from Inheritance Tax on the agricultural value of land and other property that is owned and occupied for the purposes of agriculture. Business Property Relief (BPR) is a relief from Inheritance Tax on the value of certain business assets. **Tax Tip** **Did the deceased gift an asset away within 7 years prior to death but the value of it was lower at the time of death? Normally the market value at the date of the gift comes back into the deceased’s estate for inheritance tax purposes. However, if the value was less at the time of death you can make a loss relief claim and use that value instead to mitigate the inheritance tax burden.** **Tax Tip** **As a result of the restriction of Business Property relief, one option for business owners to consider to protect their inheritance tax (IHT) position is to take out life policies to fund the IHT liabilities perhaps in conjunction with term policies to cover the risk of you dying within seven years of any lifetime gift. Qualified financial advisor advice should be taken in this instance.** **Company Taxation** There were no new announcements for corporation tax. From 1st April 2025, the Corporation Tax main rate for non-ring fenced profits will remain at 25% for profits over £250,000. | | **Profits** | **From 1-4-24** | **From 1-4-25** | |---|---|---|---| | Main rate | over £250,000 | 25% | 25% | | Small profit rate | £50,000 or less | 19% | 19% | | Marginal rate\* | Between £50,000 & £250,000 | 26.50% | 26.50% | **Tax Tip** **Does your company have cash reserves which are not required for working capital? Consider paying your corporation tax early as the interest return on early payments is competitive.** **Tax Tip** **If your company is carrying out innovative work, is it worthwhile applying for a patent? Bearing in mind the corporation tax rates, the benefit of having a patent or you exclusively licence the rights to those patents, could result in the associated profits tied to the patent attracting a much lower corporation tax rate of only 10%.** The small profits rate (SPR) will continue at 19% for companies with profits of £50,000 or less. The small profits rate will not apply to close investment-holding companies. **Quick Tip** **If you are an employer considering providing a one off/exceptional payment to your lower paid employees to mitigate the impact of the cost of living crises, then it may be better to do so in the form of non-cash vouchers, as opposed to cash itself, as it will not impact upon their universal credit payments.** Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate. If the total profits are below £250,000, the effective rate for profits between these limits is called ‘Marginal Rate’ and shown above. **Capital Allowances** This Budget has not changed the ability for companies to claim a 100% first year allowance (FYA) for main rate expenditure (known as Full Expensing) and 50% FYA for special rate expenditure. These allowances are only available to companies. The 100% Annual Investment Allowance deduction for expenditure incurred of up to £1 million in purchasing plant & machinery also remains in place. The 100% FYA for qualifying expenditure on zero-emission cars and on plant or machinery for electric vehicle charge-points has been extended to 31st March 2026 for Corporation Tax purposes and to 5th April 2026 for Income Tax purposes. **Research & Development** There are no changes to the R&D rules following the merger of the R&D tax relief scheme for small and medium-sized companies and the R&D expenditure credit (RDEC) used by large companies for accounting periods beginning on or after 1st April 2024. The SME rules restricting relief where part of the project expenditure has been subsidised have been removed. **Tax Tip** **The R&D criteria is quite wide, and many eligible companies are missing out on it. Since 1st April 2023, you only have 6 months from the end of the accounting period in which R&D activity has occurred to make a claim, unless you have made a similar claim in the previous 3 years.** Loss-making companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5% if they meet the definition for R&D intensity. For accounting periods beginning on or after 1 April 2024, the intensity threshold is 30%. There is a one-year grace period that allows a company which fails to meet the intensity threshold, for example due to a one-off shock or small fluctuations in expenditure (for companies close to the threshold), to continue claiming the enhanced support in that year if it met the intensity threshold and successfully claimed enhanced support in the previous year. **Company car and fuel** Appropriate percentages for zero emission and electric vehicles will increase by 2 percentage points per tax year in 2028/29 and 2029/30, rising to an appropriate percentage of 9% in tax year 2029/30. Appropriate percentages for all cars with emissions of 1 to 50g of CO2 per kilometre, including hybrid vehicles, will rise to 18% in tax year 2028/29 and 19% in tax year 2029/30. Appropriate percentages for all other vehicle bands will increase by 1 percentage point per year in tax years 2028/29 and 2029/30. This will be to a maximum appropriate percentage of 38% for tax year 2028/29 and 39% for tax year 2029/30. The car fuel benefit charge multiplier will be £28,200 in the 2025/26 tax year. **Van and Fuel Benefit** The van benefit charge will be £4,020 and fuel benefit charge £769 in the 2025/26 tax year. The Government will no longer maintain the treatment of double cab pick-up vehicles with a payload of one tonne or more as goods vehicles. HMRC is updating guidance to clarify the position in respect of such vehicles which will be treated as cars for capital allowances, for benefits in kind and for some deductions from business profits. Transitional arrangements will also apply. **Fuel Duty** The Chancellor will extend the 5 pence cut in the rates of Fuel Duty first introduced at Spring Statement 2022 until 22nd March 2026. **Vehicle Excise Duty (VED)** The Budget announced VED first year rates for new cars registered on or after 1 April 2025. Zero emission cars will pay the lowest first year rate at £10 until 2029/30. Rates for cars emitting 1g/km to 50g/km of CO2, including hybrid vehicles, will increase to £110. Rates for cars emitting 51g/km to 75g/km of CO2, including hybrid vehicles, will increase to £130. All other rates for cars emitting 76g/km of CO2 and above will double from their current level. **Tax Tip** **Before considering whether to buy or lease a car through the company or do so personally, why not have a review of the tax and national insurance impact on both you and the company before reaching that decision.** **VAT** The taxable turnover threshold for determining whether a business must register for VAT remains at £90,000 and the point at which a business can apply to deregister will also remain at £88,000. **Tax Tip** **Businesses that regularly receive VAT repayments from HMRC should consider filing VAT returns monthly instead of quarterly as this will help with their cashflow.** All education services and vocational training supplied by a private school or a ‘connected person’ for a fee will be liable to VAT at the standard rate of 20% starting on or after 1st January 2025. **Tax Tip** **Where, in the past, private schools have suffered irrecoverable VAT on large capital projects, there may be some circumstances where the school could look back at that expenditure and possibly start recovering the VAT incurred under the Capital Goods Scheme.** Board and lodging services closely related to such supplies will also be liable to VAT at 20%, including when supplied by a ‘connected person’. Any school fees paid on or after 29th July 2024 relating to the period from 1st January 2025 will also be liable to the standard rate of VAT. **Tax Tip** **When first registering for VAT, you may be able to claim input VAT on goods purchased in the 4 year period before registration where those goods have been used in the business and are still owned on the first date of registration. This includes both stock and assets.** **When first registering for VAT, you may be able to claim input VAT on services purchased in the previous 6 months for business purposes, unless already recharged to a customer prior to registration.** **If the supplies you make are outside the scope of UK VAT (e.g. a provision of services to an overseas customer), but they would be taxable VAT supplies if they were made in the UK, then VAT input tax on expenditure incurred in relation to that supply may be claimed back.** The provision of nursery services to children below school age will remain VAT exempt as will state school education and sixth form colleges where no fee is charged. Where a Special Education Needs place is provided at a private school and is funded by a local authority (LA) or similar body, the LA will be able to claim a VAT refund on the fees charged. **Annual Tax on Enveloped Dwellings (ATED)** The ATED charge for those property companies liable to pay it, has been increased by 1.7% in respect of the 2025/26 year. | **Property value** | **2024/25** | **2025/26** | |---|---|---| | £500,001 to £1M | £4,400 | £4,450 | | £1,000,001 to £2M | £9,000 | £9,150 | | £2,000,001 to £5M | £30,550 | £31,050 | | £5,000,001 to £10M | £71,500 | £72,700 | | £10,000,001 to £20M | £143,550 | £145,950 | | Over £20M | £287,500 | £292,350 | **Tax Tip** **Do you own or have an interest in residential property through a corporate vehicle? Was the value of the property, as at 1st April 2022, worth more than £500,000 or did you acquire it after that date for more than that amount? Even if you rent the property out on a commercial basis, you still need to complete an ATED return within 30 days of acquiring the property.** **If a corporate has constructed a new build or converted an existing property into a dwelling then it has 90 days from the completion date or the date it is first occupied if earlier to complete the ATED return. An ATED return should then be completed by 30th April each year otherwise penalty charges of up to £1,600 per property could arise.** **Stamp Duty Land Tax (SDLT)** The temporary SDLT residential rates and thresholds which applied from 23 September 2022 comes to an end on 31 March 2025. The SDLT residential rates and thresholds in existence immediately prior to that date will apply from 1st April 2025. | **Property/Lease premium/ Transfer value** | **until 31-3-25** | **from 1-4-25** | |---|---|---| | Up to £125,000 | Zero | Zero | | £125,001 to £250,000 | Zero | 2% | | £250,001 to £925,000 | 5% | 5% | | £925,001 to £1,500,000 | 10% | 10% | | Above £1,500,000 | 12% | 12% | First time buyers relief may be available. Non-UK resident will still pay an additional 2% SDLT surcharge. The SDLT surcharge on acquiring an interest, in excess of £40,000, in a second residential property increases from 3% to 5% from 30 October 2024. Corporate bodies purchasing residential property valued at more than £500,000 will be charged SDLT at 17% from 31st October 2024. unless an applicable relief applies. **Tax Tip** **If you have incurred the 3% SDLT Surcharge, uplifted 5% SDLT surcharge, (England and Northern Ireland) or the Welsh 4% Land Transaction Tax Higher Rate charge upon acquiring a new main residence but before having disposed of your previous one, then you may be able to claim a refund if you sell your old property within 36 months of purchasing the new one.** **Tax Tip** **If you have incurred the Scottish 6% (previously 4%) Additional Dwellings Supplement upon acquiring a new main residence before having disposed of your previous one, then you may be able to claim a refund if you sell your old property within 36 months of purchasing the new one. This timeframe was increased from 18 months to 36 months from 1st April 2024.** The Devolved Parliaments of Wales and Scotland will set their own land transaction tax rates in due course. The current rates are; | Wales residential Land Transaction Tax (LTT) rates | |---| | | | | **Property (freehold/leasehold) value** | **LTT rate** | | Up to £225,000 | Zero | | £225,001 to £400,000 | 6% | | £400,001 to £750,000 | 7.50% | | £750,001 to £1,500,000 | 10% | | Above £1,500,000 | 12% | | Scotland residential Land & Building Transaction Tax (LBTT) rate | |---| | | | | **Property purchase value** | **LBTT rate** | | Up to £145,000 | Zero | | £145,001 to £250,000 | 2% | | £250,001 to £325,000 | 5% | | £325,001 to £750,000 | 10% | | Above £750,000 | 12% | **Non-Dom Tax status** From 6 April 2025, the current remittance basis of taxation will be abolished for UK resident non-domiciled individuals. This will be replaced with a new 4-year foreign income and gains (FIG) regime for individuals who become UK tax resident after a period of 10 tax years of non-UK residence. Qualifying individuals will not pay tax on FIG arising in the first 4 tax years after becoming UK tax resident and will be able to bring these funds to the UK free from any additional charges. They will not pay tax on non-resident trust distributions either. Individuals, who on 6 April 2025, have been tax resident in the UK for less than 4 years (after 10 years of non-UK tax residence) will be able to use this new regime for any tax year of UK residence in the remainder of those 4 years. The protection from tax on foreign income and gains arising within settlor-interested trust structures will no longer be available for non-domiciled and deemed domiciled individuals who do not qualify for the 4 year foreign income and gains regime. Transitionally, for Capital Gains Tax purposes, current and past remittance basis users will be able to rebase foreign assets they held on 5 April 2017 to their value at that date when they dispose of them. Any foreign income and gains that arose on or before the 5 April 2025, while an individual was taxed under the remittance basis, will continue to be taxed when remitted to the UK under the current rules. This includes remittances by those who are eligible for the new 4-year foreign income and gains regime. A new Temporary Repatriation Facility will be available for individuals who have previously claimed the remittance basis. They will be able to designate and remit at a reduced rate foreign income and gains that arose prior to the changes. This includes unattributed foreign income and gains held within trust structures. The Temporary Repatriation Facility (TRF) will be available for a limited period of 3 tax years, from 2025/2026. The TRF rate will be 12% for the first 2 years and 15% in the final tax year of operation. The measure extends the period of Overseas Workday Relief to 4 years to align with the new 4-year foreign income and gains regime. From 6 April 2025, Overseas Workday Relief will be subject to a financial limit on the amount of relief that can be claimed, this is the lower of £300,000 or 30% of an individual’s total employment income. **Furnished Holiday Lettings** The announcement that the FHL regime was to be abolished was in the Spring 2024 Budget. However it did not get enacted before the General Election came about. The Labour Government have since confirmed its demise. FHL will be treated the same as long term lets from April 2025 as regards income tax. Loan interest relief will be restricted to a 20% income tax credit from April 2025. Where an existing FHL business has an ongoing capital allowances pool of expenditure, it can continue to claim writing down allowances on that pool post April 2025 but not in respect of new expenditure after that date. **Tax Tip** **If you are a furnished holiday let business, and you can afford to do so, consider whether to incur capital expenditure in advance of the beginning of April 2025, as the favourable capital allowances treatment will no longer be available for expenditure post that date.** There is an anti-forestalling rule which, with minor exceptions, prevents FHL owners obtaining capital gains relief through the use of unconditional contracts with effect from 6th March 2024. FHL income will not be counted as relevant income for pension contribution purposes from 6th April 2025 onwards. Certain capital gains tax reliefs will cease from April 2025 except where the FHL conditions are satisfied up to April 2025 and the criteria for that particular relief includes conditions which can still come into play post April 2025. Where the FHL business ceased prior to 6th April 2025, business asset disposal relief (the 10% capital gains tax rate) may still apply to a disposal of the property within 3 years of the FHL business coming to an end. **Tax Tip** **Furnished holiday let income will cease to count as net relevant earnings for pension purposes from 6th April 2025 onwards. It may be worth checking if it is worthwhile and feasible to top up your pension pot prior to this beneficial pension treatment coming to an end.** **High Income Child Benefit Charge (HICBC)** The individual’s High Income Child Benefit Charge (HICBC) adjusted net income threshold will remain at £60,000. **Tax Tip** **If you are a single parent or divorced or widowed and a new partner subsequently moves in with you, depending upon their level of income, you may find that they may get hit for the high income child benefit charge.** For individuals with income between £60,000 and £80,000, the rate at which HICBC is charged is halved, and will equal one per cent for every £200 of income that is more than £60,000. **Tax Tip** **If you have a child under the age of 12 and register for child benefit you will automatically receive a parent’s state pension credit for each year. If you have a family member who helps you with childcare support whilst you are at work and has a gap in their own national insurance records, you may be able to elect to transfer your state pension credit to them.** **Tax Tip** **If you have separated from your spouse or partner, with the intention for it to be a permanent separation, or if you divorce, then it is important to revisit the child benefit claim. Failure to do so could result in you being hit for the HICBC even if the child may not live with you.** **Individual Savings Account (ISA)** The existing ISA allowance limit of £20,000 will remain in place for the 2025/26 tax year. The Junior ISA allowance limit and Child Trust Fund subscription limit will continue at £9,000 per annum. **Employee Ownership Trusts (EOT)** There is a tightening of the EOT rules as regards disposal made to the trustees of an EOT on or after 30 October 2024. The revised tax treatment for contributions made to an EOT to repay the former owner and the changes to the Income Tax relief conditions for annual bonus payments to employees of EOT controlled companies also has effect from 30 October 2024. Legislation will be introduced to restrict former owners or persons connected with former owners from retaining control of companies post-sale to an EOT by virtue of control (direct or indirect) of the EOT. **Tax Tip** **If you are a partially exempt business for VAT purposes, you normally cannot claim the VAT input tax on costs attributable to any VAT exempt supplies that you make. However, if the total value of your exempt input tax is not more than £625 per month on average and it represents no more than 50% of your total VAT input tax then this can be recovered.** Trustees of an EOT must be UK resident (as a single body of persons) at the time of disposal to the EOT. Trustees must take reasonable steps to ensure that the consideration paid to acquire the company shares does not exceed market value. If qualifying conditions surrounding the EOT are breached, the timeframe to clawback tax relief from the vendor has been extended to the end of the 4th tax year following the end of the tax year of disposal. A requirement that individuals provide within their claim for Capital Gains Tax relief information on the sale proceeds and the number of employees of the company at the time of disposal. **Tax Tip** **If a business deregisters for VAT purposes, it must account for output tax on unpaid sales invoices on its final VAT Return. However, if at a later date (up to 4 years), some sales are written off as they are not expected to be paid by the customer then bad debt relief can be claimed.** **Tobacco & vaping duty** With effect from 6pm on 30th October 2024 duty rates for all tobacco products will increase using the TD escalator by 2% above inflation (based on the Retail Price Index (RPI). The rate for hand-rolling tobacco by an additional 10% above the escalator, to 12% above RPI. There will be a one-off TD increase of £2.20 per 100 cigarettes or 50 grams of tobacco, effective from 1 October 2026. With effect from 1st October 2026 there will be a single VPD rate of £2.20 per 10ml of vaping liquid. **Tax Tip** **Were you going to receive shares from your employer as a result of your employment? Subject to the way those shares are provided, you could be liable to an immediate income tax charge (in some cases national insurance as well), based upon the actual market value (AMV) of the shares at the time. You and your employer may want to elect, within 14 days of receiving the shares, to be taxed on the unrestricted market value (UMV) instead. More tax is likely to be paid upfront but it may result in considerable overall tax savings further down the line.** **Alcohol duty** AD duty rates on draught products below 8.5% alcohol by volume (ABV), will be cut by 1.7%, so that an average ABV strength pint will pay 1 pence less in duty. AD duty rates on non-draught products will increase in line with RPI inflation. These AD measures will take effect from 1 February 2025. **Tax Tip** **Are you an employer who retains an element of the tips, gratuities or service charges to meet any employers national insurance liability which may arise in respect of that income? Be aware that the Employment (Allocation of Tips) Act came into force from 1st October 2024. Under the legislation an employer will not be able to retain any monies of this ilk, as it all has to be paid out to the employee.** **Consider setting up an independently controlled Tronc scheme which should help you avoid suffering the employers national insurance liability in the first place.** **Be aware that tips, gratuities or service charges allocated to the employees do not count as wages when applying the national minimum wage legislation.** **Infrastructure Spending** The Government has changed its self-imposed debt rules in order to free up £50 billion for infrastructure spending. The National Audit Office and the Office for Budget Responsibility will be asked to validate the investments made. The extra room for manoeuvre for spending on investment projects will not be able to be used for extra day to day spending, as this will need to be funded from tax receipts. There will be £500 million in new funding to help build up to 5,000 social homes and bring total investment in housing supply to £5 billion as part of the government’s Affordable Homes Programme. A further £1.4 billion will be allocated to rebuild crumbling schools. **Tax Tip** **Are you looking to reward employees who have been with you for more than 20 years? You can provide long service gifts which can be free of tax for the employee. The gifts can be worth up to £50 for each year of service up to a maximum of 20 years and should be the first in the last 10 years, and not cash.** **Further Announcements** To help support aims to reduce waiting times, there will be an additional £1.5 billion capital investment into new surgical hubs and scanners, alongside £70 million for new radiotherapy machines. £1.8 billon will be allocated for the expansion of government-funded childcare, with a further £15 million of capital funding for school-based nurseries. **Tax Tip** **A charity or Community Amateur Sports Club may be able to claim 25% on cash or contactless card donations of £30 or less up to a maximum of £2,000 in relief, without the need to keep individual donor records under the Gift Aid Small Donation Scheme.** The first stage of the plan will pay for 300 new or expanded nurseries across England. The government will triple investment into free breakfast clubs to £30 million in 2025/26. From the beginning of next week the subsidised £2 bus fare cap will be increased to £3. The subsidy was due to come to an end in December this year but the government has extended it for a further year. The Chancellor has raised the limit people can earn before being ineligible for the Carers Allowance from £151 a week to £181. To keep more children in stable and loving homes, £44 million of funding has been announced to support kinship and foster carers. £240 million Get Britain Working package to include work, skills and health support for disabled people and the long-term sick has been announced. Benefit reform will be accelerated this year, with 800,000 people on the old Employment and Support Allowance (ESA) benefit to be moved onto Universal Credit (UC) from this autumn instead of 2028. The Energy Profits Levy will increase from 35% to 38% from 1st November 2024 until 31st March 2030. The alternative finance (AF) legislation is amended, with effect from 30th October 2024, to ensure that where an existing asset is used as a means to raise finance using AF, the tax outcome is broadly the same as conventional financing. The government is extending the employer National Insurance contributions relief for employers hiring qualifying veterans for a further year from 6 April 2025 until 5 April 2026. The late payment interest rate charged by HMRC on unpaid tax liabilities will increase by 1.5% from April 2025. The Help to Save Scheme will be extended a further two years to 5th April 2027. Making Tax Digital (MTD) for Income Tax will be extended to sole traders and landlords with income over £20,000 by the end of this Parliament. **Categories:** Budget, News, Running your business, Tax **Tags:** Kerry Newman --- ### [Introducing our latest SG Accountant – Frances Bridge](https://sg-accounting.co.uk/blog/introducing-our-latest-sg-accountant-frances-bridge/) **Published:** February 13, 2024 **Author:** Jen Winslow **Content:** Here at SG Accounting, we have a fantastic accounting team, ranging from our apprentices right through to our Senior Client Directors and Head of SG. We consistently attract and hire the best local accounting talent and are proud of the team and the high levels of service they provide to our clients. Combined with their qualifications, years of experience and personal touch, we’re privileged to have such a strong team that makes SG what it is. And we’re growing! Recently we welcomed Frances Bridge into the Client Director team. Take a look below to read a little bit about her background, what she enjoys about accounting, and what she likes to get up to in her spare time. ![Frances Bridge](https://sg-accounting.co.uk/wp-content/uploads/2024/02/Frances-SG-Meet-the-Team.png "Frances SG Meet the Team | SG Accounting") Frances Bridge – Client Director Frances joined us recently in February 2024 from another local accountancy firm, Intouch Accounting. With years of experience in looking after the complex and specialist needs of contractors, there’s little she doesn’t know about how to help contractors maximise their take home pay. From keeping up to date with the latest legislation and understanding how contractors are affected, to getting to know her clients on a personal level, Frances has the knowledge and experience to help any contractor get the most from their finances. By getting to know her clients she’s able to provide them with tailored tax and accounting advice, and find solutions to any problems they’re experiencing. In her spare time she enjoys travelling the world and spending time with her son George, along with visiting the beach and spending time with friends and family. SG welcomes Frances to the team! **Categories:** limited company, New to contracting **Tags:** Frances Bridge --- ### [Furlough scheme extended for November 2020](https://sg-accounting.co.uk/blog/furlough-job-scheme/) **Published:** November 2, 2020 **Author:** Kerry Newman **Content:** Hours before the furlough scheme was due to end on October 31st, the government has announced it will be extended until the end of November, as a further lockdown has been announced for England. Under the Coronavirus Jobs Retention Scheme, to give furlough its official title, employees placed on leave received 80% of their pay, up to a maximum of £2,500 a month. In recent months, firms have had to top up furloughed wages by 20%, with the government paying 60%. However, for November the state will put in the full 80%, with the employer only covering pension and national insurance contributions which, for the average claim, accounts for just 5% of total employment costs. The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. As always, we will be supporting all of our clients through these turbulent times. If you are not a client of SG Accounting, [get in touch now](https://sg-accounting.co.uk/contact/) to find out how to come on board. **Categories:** News, Salary/dividends **Tags:** furlough, job scheme, Kerry Newman --- ### [Furlough extended until March, Job Retention bonus scrapped](https://sg-accounting.co.uk/blog/furlough-extended-until-march-job-retention-bonus-scrapped/) **Published:** November 12, 2020 **Author:** Kerry Newman **Content:** It has now been confirmed that the Coronavirus Job Retention Scheme has been extended until 31 March 2021. From 1 November 2020, employers can claim 80% of an employee’s usual salary while they’re in furlough, up to a maximum of £2,500 a month. Any employee that was employed and on payroll on 30 October – providing the organisation has made a PAYE RTI submission to HMRC since the scheme began in March – is eligible. Where an organisation has made employees redundant or ended their contracts, if this was on or after the 23 September, they can be re-employed and placed on furlough, providing they were on PAYE payroll on or before that date. Unlike the existing furlough scheme, which was due to close on 31 October, there is no maximum number of employees that can claim for the grant. The job retention bonus which was to be available for companies re-employing furloughed employees has now been scrapped in light of the extension of the furlough scheme. As always, if you are a client of SG Accounting and have any questions on this, please do contact your Client Director. **Categories:** Coronavirus, News **Tags:** Kerry Newman --- ### [Using your Limited Company abroad post-Brexit](https://sg-accounting.co.uk/blog/using-your-limited-company-abroad-post-brexit/) **Published:** December 17, 2020 **Author:** Kerry Newman **Content:** The UK will be leaving the EU on December 31st, so what does that mean for contractors using their Limited Company outside of the UK? In this blog we explore the way in which you can contract abroad, post-Brexit. **From January 1st 2021** If you are already registered within the EU and/or are working in-country lawfully by the 1st, you may continue to do so. If you start a contract post January the 1st, then contracting through your Limited Company in the EU will be pretty much the same as it is anywhere else in the world. As a UK tax resident, you’ll be classed as a ‘third-tier’ country national, and will most certainly be required to have a work permit. As your Limited Company is not a local entity abroad, and as an employee of your own company, it will not be able to sponsor a work permit for you. The only visible route at present is for Limited Company contractors to apply for a ‘self-employed’ work permit. It’s worth noting though that these permits are not easy to come by, and do not exist everywhere. Certainly something to keep in mind if you’re considering a contract within the EU. **The exceptions to the new rules** So if you’re a UK director of a Limited Company, being able to freely contract in the EU is going to prove a little more difficult in comparison to pre-Brexit. That is unless you fall under the following four exceptions: 1. You already possess the legal right to work within the EU country 2. You are able to acquire permission through marriage 3. You can prove ancestral rights 4. Through investment schemes So if you fall into one of the above categories, what other issues might you face? **They forgot about us** During Brexit negotiations, the majority of talks centred around the trade of featured goods, and as far as the EU was concerned the discussion of services was never integral to the overall big picture. So in all honestly, no one knows for sure what will happen about companies from the EU being able to contract freely within the UK, and vice-versa. And it’s predicted that once this this has been agreed, it will only be on a reciprocal basis. **What is and isn’t changing** If you’re able to meet certain criteria, then it will be possible to work abroad but remain within your home country’s social security system. Certificates of Coverage are documents issued by the authorities, which will enable this to happen. These are called ‘A1s’ within the EU. A1s between the UK and EU will end when the Free Movement of Persons ends, therefore when an EU-based director works within the UK using their own Limited Company (or vice-versa), they will be subject to paying local social charges or NICs, and not home ones. What isn’t going to change are the double-taxation treaties between states, as these are not EU-wide but bilateral agreements. Nationals of the UK, RoI, Channel Islands and the Isle of Man will be free to live and work in one another’s territories, as the Common Travel Area will also not be changing. **6 key compliance areas** UK Limited Companies operating abroad (regardless of location) must observe the law in their envisaged work-country relating to: - Foreign employers - Permanent establishments - VAT - Income tax - Social security - Employment law To avoid any trouble with any country’s authorities it’ll be imperative for UK Limited Companies to abide by that country’s individual, specific requirements, in relation to the above six key points. **Final thoughts** If you’re considering accepting a contract abroad post-Brexit or your current contract’s lifespan will outlive the December 31st deadline, speak to your specialist SG Accountant, who will be able to advise you based on your specific professional and personal goals. If you don’t have an accountant and need a guiding hand throughout these changes, our team of director-level accountants will be able to help you navigate your way through. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out more. **Categories:** Brexit, New to contracting, News **Tags:** Kerry Newman --- ### [The VAT Deferral Scheme](https://sg-accounting.co.uk/blog/the-vat-deferral-scheme/) **Published:** February 22, 2021 **Author:** Kerry Newman **Content:** On February 11th HMRC announced that as part of its COVID-19 support, all VAT registered businesses were able to defer their VAT liabilities generating between March 20th and June 30th 2020 to help with their cashflow. In this blog we take a look at the new scheme, how it works, how you can register, and what the prerequisites are. **How does the new scheme work?** Full payment of the deferred VAT was due by March 31st 2021, but last week HMRC introduced a new online scheme to assist businesses who may be experiencing difficulties in paying any outstanding amounts. It’s called the [VAT deferral new payment scheme](https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19). The scheme will be available between February 23rd and June 21st 2021. Once you have registered and your business has been accepted, you will be able to pay any deferred VAT in equal instalments, interest free. You can also choose the number of instalments, from two to eleven. This is dependent on when you join. **How can you register your business?** Go to the [gov.uk website to register](https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19#if-you-want-to-join-the-new-scheme). You’ll need to setup a government gateway account, so if you’d like to join the scheme we strongly advise doing so quickly, to ensure you get the maximum number of instalments available. **How else can you register if you’re unable to do so online?** You can contact HMRC’s COVID-19 helpline on 0800 024 1222 when the scheme opens. **Can your accountant do it for you?** Unfortunately not, only you can register your own business. **What other prerequisites are there?** To qualify you must: - still have deferred VAT to pay - be up to date with four of your latest VAT returns - have joined by July 21st 2021 - pay your first instalment upon joining - pay all instalments via direct debit If you also have other payment arrangements with HMRC such as the Time to Pay arrangement or other debts and outstanding tax, you’re still eligible for the scheme. **What if your business is on the VAT Payment on Account Scheme or the VAT Annual Accounting Scheme?** You can still make use of the new scheme, and you’re able to join from 10/03/2021. **What happens if you don’t pay by 31st March, join the new scheme or arrange any additional support with HMRC?** You may face paying penalties or interest. **How can SG Accounting help?** Our team here have their fingers on the pulse when it comes to HMRC’s announcements and how our clients might be affected. If this is the level of latest advice and support you need from your accountant, [get in touch today](https://sg-accounting.co.uk/contact/). **Categories:** New to contracting, News, Running your business, Tax **Tags:** Kerry Newman --- ### [A guide to dividends and what you need to know as a Limited Company contractor](https://sg-accounting.co.uk/blog/a-guide-to-dividends-and-what-you-need-to-know-as-a-limited-company-contractor/) **Published:** March 24, 2021 **Author:** Kerry Newman **Content:** For Limited Company contractors, dividends are a fantastic way to maximise your take home pay and increase your tax-efficiency, but getting your head around them can be a little tricky. Whilst it’s always a good idea to have the support of a specialist contractor accountant to help you get it right, it’s also important to have a basic understanding of what dividends are and how they work. In this blog we look at just that, and give you an overview into the world of dividends. **What is a dividend?** In a nutshell a dividend is a distribution of company profits amongst the company’s shareholders. As a Limited Company contractor you’re able to pay yourself a salary, then top up your monthly income with dividends. Dividends are taxed differently to salary, and many contractors add a spouse as a shareholder in their Limited Company so that they’re able to increase the amount of tax-free income they can draw out of their company. **When are you able to draw dividends?** You’re able to draw a dividend from your Limited Company whenever you wish, so long as there’s enough profit within the company. If there isn’t it would be classed as an illegal dividend or director’s loan, and could be subject to an investigation from HMRC. Most contractors draw their dividends monthly, quarterly or annually. Whilst it’s up to you as to how often you draw dividends, if you do it too often it may be considered a ‘disguised salary’ and could also be subject to an investigation. It’s also important to understand that when you decide to declare a dividend you must minute your decision, and provide all shareholders with a dividend voucher. By doing so you’re providing a clear audit trail should it ever be investigated, and all dividend vouchers are required for your annual tax return. **What are the tax and National Insurance Contribution (NIC) implications?** Dividends do not incur any NIC, and this is one of the main reasons why they are so favourable to contractors. Many contractors choose the combination of a low salary and high dividends, as it’s the most tax efficient way to pay yourself. The dividends you do draw will be taxed as personal income, with a tax-free allowance of up to £2,000 per person. The following tax thresholds are correct for the current tax year: **Basic rate (taxed at 7.5%):** up to £50,000 **Higher rate (taxed at 32.5%):** from £50,001 to £150,000 **Additional rate (taxed at 38.1%):** £150,001 + A dividend is taxed at the point it is declared, rather than when it’s drawn, so it’s important to time this correctly to ensure it’s taxed correctly. For example, if you were to declare a dividend on April 1st 2021 but it wasn’t paid until April 7th, it will be included in your 2020/2021 tax return, which depending on how much you’ve already drawn during that tax year, could push you into the next tax rate. Your contractor accountant will be able to advise you on this, and help you keep track of which tax rate you’ll be paying, whether it’s worth it for the amount you’ll be drawing, and when the best time will be to do so. **Final thoughts** Dividends are fantastic as they allow you to make the most from your personal allowances. By paying yourself a salary which doesn’t use up all of the basic tax rate then topping up your income with dividends, you’ll be making full use of the lower tax rate without having to pay any further NIC. Every contractor’s needs are different, and your personal circumstances will determine how and when you decide to draw dividends. Whilst in principle the concept is simple, it can be very easy to draw too many dividends, thus tipping yourself over into higher tax bands. Always ensure you speak to a specialist contractor accountant before taking any money out of your business account, to ensure you’re taking the right amount and doing everything by the book. If you’re on the lookout for a new contractor accountant, [get in touch today](https://sg-accounting.co.uk/contact/). Our team of director-level accountants are on hand, ready to give you specialist dividends advice, and to help you take home the maximum amount of your contractor pay. **Categories:** New to contracting, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [Seven top tips for Limited Company contractors to reduce your income tax bill in 2021](https://sg-accounting.co.uk/blog/seven-top-tips-for-limited-company-contractors-to-reduce-your-income-tax-bill-in-2021/) **Published:** July 6, 2021 **Author:** Kerry Newman **Content:** We’re now well into the new tax year, and whilst tax might be at the back of your mind, it’s still well worth understanding its importance and how making it work in your favour could save you money. In this blog we explore the top seven things you can do to reduce your tax bill and ultimately increase your contractor take home pay. 1. **Make pension contributions** Your pension contributions are made from taxed money. But whilst the taxpayer puts in the net amount (for example 80% if you’re a basic rate tax payer), HMRC will contribute the tax paid on the contribution, directly into your pension scheme. By doing so it means the entire amount is invested tax-free, so £80 from the contractor and £20 from HMRC. Once the money is held within the pension the investment will grow without income tax and capital gains tax. If you’re a UK resident that’s under 75 who’s not already receiving their pension, then you’re generally still able to contribute £40,000 from your earnings and obtain this tax relief. 2. **Make contributions to your partner’s pension** If your partner isn’t earning, so long as you’re paying tax you’re able to contribute to their pension scheme in a tax-efficient manner. So long as your partner is a UK resident, not earning themselves and not already receiving a pension, you’re able to contribute up to £3,600 per year into their pension. You’ll be able to input a maximum of £2,880, and HMRC will top it up with the remaining £720 to total the £3,600. 3. **Use any of your unused pension annual allowance** Ensure you’ve used any of your unused allowance. If you have the funds and are a tax-payer that’s not yet reached the £40,000 limit, then be sure to make the most of your availability. Plus, if you have excess allowance from the previous three years, you’re able to use it. 4. **Give a gift to charity** If you sign a gift aid declaration when giving to charity, it’s exempt from income tax. For example, if you gifted £80 of taxed money to charity, HMRC pays the additional 20%, so the charity will receive £100 in total. If you are a higher or additional rate tax payer then the tax bands are extended, so they will gain greater relief at their highest rate. 5. **Transfer investments to your partner** If you have investments with your spouse, it’s advised to revise them annually to ensure they’re in the best proportion for tax purposes. If your funds are generating interest, and your spouse doesn’t have total earnings from employment, trading or property that exceeds £17,570 in 2021/22, the first £6,000 of the received interest is tax-free. If your spouse does have non-savings earnings above this amount, basic rate taxpayers should earn a minimum of £1,000 interest and £500 for higher rate taxpayers to be able to take advantage of the personal savings allowance. Should the investment income generate dividends each spouse should hold enough capital to generate dividends of £2,000 (which is the annual dividends allowance. Be aware that this allowance is not means tested). 6. **Transfer your personal allowance to your partner** The marriage allowance permits a couple to transfer 10% of one of their personal allowance to the other, so long as they both pay the basic rate tax. By doing so a couple has the possibility of saving up to £252 per year, and can be done online through HMRC. 7. **Ensure you’ve used your ISA allowances** ISAs allow your income to increase tax-free. Whether you choose to invest in stocks and shares or cash ISAs, you’re able to invest a total of £20,000 for the tax year 2021/22, and £9,000 for a junior ISA. **How can SG Accounting help?** Here at SG one of our main goals is to ensure your money works as hard as it possibly can, so that you take home as much of your contractor pay as possible whilst keeping the taxman happy. With our expertise in the specialist and often complex issues Limited Company contractors can face, we ensure our clients are getting what they need and deserve from their income, along with professional advice on how to achieve your personal and professional goals. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out more. **Categories:** Finance, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [Should you be doing ATED returns as a property investor?](https://sg-accounting.co.uk/blog/should-you-be-doing-ated-returns-as-a-property-investor/) **Published:** July 21, 2021 **Author:** Kerry Newman **Content:** **What is an ATED?** An Annual Tax on Enveloped Dwellings (ATED) is an annual tax that’s payable by UK companies that own UK residential property with a value greater than £500,000. If your property satisfies one of the following criteria and you’re a UK landlord, you’ll need to complete an ATED return: If your property is a dwelling If it was valued at more than: - £2 million (for 2013/14 returns onwards) - £500,000 (for 2016/17 returns onwards) - [Click here to find out the value of your property](https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-pre-return-banding-checks#how-to-value-your-property) - Is owned wholly or partly by: - A company - A partnership where any of the partners is a company - A collective investment scheme – eg a unit trust or an open ended investment vehicle **When the tax return and payment are due** You must submit your tax return either on or after April 1st in any chargeable period. If you purchase an ATED property, your tax return and payment will be due within 30 days of the purchase, or 90 days if the property is a new build. **What is the ATED charge?** The annual charges are as follows (and are payable in advance): | ATED charge for the year commencing: | 1 April 2021 | 1 April 2020 | 1 April 2019 | 1 April 2018 | 1 April 2017 | |---|---|---|---|---|---| | Property value | | | £500k-£1m | £3,700 | £3,700 | £3,650 | £3,600 | £3,500 | | £1m-£2m | £7,500 | £7,500 | £7,400 | £7,250 | £7,050 | | £2m – £5m | £25,300 | £25,200 | £24,800 | £24,250 | £23,550 | | £5m – £10m | £59,100 | £58,850 | £57,900 | £56,550 | £54,950 | | £10m-£20m | £118,600 | £118,050 | £116,100 | £113,400 | £110,110 | | £20m+ | £237,400 | £236,250 | £232,350 | £226,950 | £220,350 | **Which reliefs and exemptions mean you don’t have to pay?** If your property meets the following criteria you may be able to claim relief. Your property: - Is in the process of development for resale by a property developer - Is let to a third party on a commercial basis, whilst not being occupied by anyone who is connected to the owner - Hasn’t been acquired by anyone under a regulated home revision plan - Is owned by a property trader as stock of their business for the sole purpose of resale - Hasn’t been repossessed by a financial institution as a result of its business of lending money - Is being used to provide living accommodation to certain qualifying employees be a trading business - Is a farmhouse that’s occupied by a farm worker or a former long-serving farm worker - Is owned by a registered social housing provider or a qualifying housing co-operative **What’s not classed as a ‘dwelling’?** If your property is one of the following you’ll also be exempt from completing an ATED: - Hotel - Guest house - Boarding school accommodation - Hospital - Student halls of residence - Military accommodation - Care homes - Prisons Whilst your property may be exempt, you’ll need to submit a return minus any paid tax. If you’re eligible for the reliefs then you’ll need to submit a Nil return to HMRC, and request the relief by completing a relief claim declaration form. Note that this must be completed by April 30th for each accounting period. **What will happen if returns and payments are made late?** HMRC will issue you separate fines for both the return and payment should either be made late. **How do you submit your ATED and payment?** **Step 1 –** Confirm whether your property is an enveloped dwelling (or not) **Step 2 –** Check to see if you’re eligible for any exemptions, and claim them **Step 3 –** [Register online for the ATED service](https://www.gov.uk/guidance/register-for-the-annual-tax-on-enveloped-dwellings-online-service#register-for-the-service) **Step 4 –** Keep a record of the 15 digit ATED reference number HMRC will provide you with (you’ll find it displayed on the ATED service homepage) **Step 5 –** Make a claim in case reliefs are available **Step 6 –** [If no charge is due, submit a return](https://www.gov.uk/guidance/register-for-the-annual-tax-on-enveloped-dwellings-online-service#submit-a-return-where-no-charge-is-due) **Step 7 –** If ATED is applicable and a payment is due, [complete and file your return online](https://www.gov.uk/guidance/register-for-the-annual-tax-on-enveloped-dwellings-online-service#submit-a-return-where-a-charge-is-due) **Step 8 –** [Make your full ATED payment](https://www.gov.uk/guidance/pay-annual-tax-on-enveloped-dwellings) – and that’s it! You’re done for another year **Final thoughts from SG Accounting** Whether you’re a new landlord, or you’re considering it, and are starting to get your head around everything you need to do to ensure you stay on the right side of the taxman, SG are here for you. Our expert accountants are specialists in the complex needs of landlords, and we’re here to help you navigate the confusing world of tax, and ensure you pay what’s due in the most tax efficient way possible. [Get in touch today to find out more](https://sg-accounting.co.uk/contact/). **Categories:** News, Running your business **Tags:** Kerry Newman --- ### [A contractor’s guide to the announced dividend tax increase](https://sg-accounting.co.uk/blog/a-contractors-guide-to-the-announced-dividend-tax-increase/) **Published:** September 21, 2021 **Author:** Kerry Newman **Content:** Contractors have had a lot of change this year, so it’s safe to say that the unexpected increase to dividend tax rates was a bit of an unexpected (and unwanted) announcement. In this blog we explore what’s been announced, when it’ll come into force, and how Limited Company contractors will be affected. **What’s been announced?** On September 7th Boris Johnson announced that there will be an increase of 1.25% in the rate of dividend tax. So tax payers can expect the following increased from April 2022: - Basic rate taxpayer: increase from 7.5% to 8.75% - Higher rate taxpayer: increase from 32.5% to 33.75% - Additional rate taxpayer (for those earning over £150,000): increase to 39.35% The government is hoping that by making these changes it’ll bring in an additional £600 million per year. With these increases it’s important to also understand the impact it will have on your National Insurance (i.e. increasing from 9% to 10.25% and 2% to 3.25% if you’re a higher rate taxpayer). **How much extra can contractors expect to pay?** If your salary is £8,840 you can expect to pay an additional £450 from April 2022 onwards. This equates to the extra 1.25% on your dividends in the basic rate band. If you take dividends in the higher rate band, you can expect to pay around an extra £12.50 per £1,000 of dividends taken in that tax band. According to a [HMRC Treasury document](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1015736/Build_Back_Better-_Our_Plan_for_Health_and_Social_Care.pdf), you can therefore expect to pay an additional £715 where you’re earning the median higher rate taxpayer income (£67,110). Regardless of where you’ll fall in regards to your tax band, you’ll need to be considerate before the start of the new tax year as to the timing of taking a dividend, because if you do so **before April 5th 2022** it’ll result in paying a lower rate of tax. We’d advise always discussing your personal circumstances with your contractor accountant before taking out any money from your Limited Company. **Will the dividend allowance also be changing?** At present there are no indications from the government of any plans to change the current £2,000 dividend allowance. So small business owners and contractors can continue to enjoy the first £2,000 of dividends tax free. **What else is there to be aware of?** If you have National Insurance liabilities to pay for any staff you employ, you’ll also be hit by a National Insurance increase of an additional 1.25%. So for some contractors, they’ll have to pay both increases. Many contractors feel that during the pandemic they’ve been hit hard with April 2021’s IR35 reform and also left to fend for themselves, whilst others have had access to help in the form of provisions from the government. Whilst employees enjoyed furlough and those who are self-employed had SEISS grants, if you’re a small business owner whose income model is based on taking a low salary and topping it up with dividends, then nothing was made available to help during the pandemic. It’s a shame that for contractors, this tax increase leaves few alternatives for the ways in which they can extract profit from their Limited Companies. It’ll be interesting what this October’s budget has in store for contractors, and how their future will look. **How can SG Accounting help?** Whilst this announcement is less than ideal for contractors, the tax rise doesn’t come into force until April 6th 2022, so there is some time to plan your taxes accordingly in order to make the most from what’s available now. [Speak to your specialist contractor accountant](https://sg-accounting.co.uk/contact/) who will be able to advise you on your personal circumstances, and help you up until April 6th and beyond. **Categories:** Budget, News, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [The Super-Deduction Tax Relief](https://sg-accounting.co.uk/blog/the-super-deduction-tax-relief/) **Published:** September 22, 2021 **Author:** Kerry Newman **Content:** As a Limited Company contractor you’ll no doubt have equipment to enable you to complete your work. HMRC allows you to offset part of the cost of purchasing said equipment against your company profits. Plus, as an extra bonus, by doing so you’re able to reduce the total amount of Corporation Tax you must pay. The super-deduction tax relief has also now meant that Limited Company contractors are entitled to an even greater value tax break. This blog takes a deeper look into the relief, what it includes, and how it could benefit you. **The super-deduction tax relief** On the 1st of April 2021 the government announced a new ‘super-deduction’ Corporation Tax relief, especially for Limited Companies. For qualifying expenditure it offers 130% first-year relief on plant and machinery purchases until the 31st of March 2023, plus a 50% first-year allowance for special rate assets ([you can view HMRC’s super-deduction factsheet here](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/967202/Super_deduction_factsheet.pdf)). Contractors will no doubt welcome this new super-deduction, as the 130% equates to the total purchase price, whereas normally it would fall within a company’s AIA which only provides relief for 100%. For example, if you were to purchase a laptop for £1,000, under the new super-deduction tax relief rules you’d receive £247 in Corporation Tax relief, whereas you’d only receive £190 on the old AIA scheme (£1,000 x 130% = £1,300 x 19% versus £1,000 x 19% previously). **Are there any rules which mean you *can’t* use the super-deduction?** You won’t be eligible for the super-deduction tax relief if your Limited Company has a lease arrangement, or contractual requirement where the equipment purchased has no expectation of being passed into your company’s direct ownership. It also doesn’t apply when purchasing vehicles, or items that are second hand. **Selling goods you purchased using the relief** Should you decide to sell anything you purchased using the relief, you’ll need to be aware of the following: - For the period ending either on or before the 31st of March 2023, proceeds will be taxed at 130% of the amount received, with periods remaining taxable at 100% of the amount received - For the period starting on or after the 1st of April 2023, proceeds remain taxable at 100% of the amount received **How SG Accounting can help** If you’ve had your eye on a new bit of equipment for your contracting career, then now could be the perfect time. Ensure to speak to your SG Accounting Personal Accountant before parting with any cash, to ensure you’re not left out of pocket. Tax isn’t the easiest topic to understand, so leave it up to the experts, and [get in touch today](https://sg-accounting.co.uk/contact/). **Categories:** Expenses, Running your business, Tax **Tags:** Kerry Newman --- ### [The Budget October 2021](https://sg-accounting.co.uk/blog/the-budget-2021-how-limited-company-contractors-are-affected/) **Published:** October 27, 2021 **Author:** Kerry Newman **Content:** ## Autumn Budget 2021 The Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech he set out the plans to “build back better” with ambitions to level up and reduce regional inequality. ### Main Budget proposals Tax measures include: - a new temporary business rates relief in England for eligible retail, hospitality and leisure properties for 2022/23 - a change in the earliest age from which most pension savers can access their pension savings without incurring a tax charge. From April 2028 this will rise to 57 - the retention of the £1 million annual investment allowance until 31 March 2023 - individuals disposing of UK property on or after 27 October 2021 now have a 60 day CGT reporting and payment deadline, following the completion of the disposal. Other measures include: - a complete overhaul of alcohol duties that will see drinks taxed on their strength - the cancellation of the previously announced rise in fuel duties - pubs supported with a reduction in draught beer and cider duty - increases in the National Living Wage and the National Minimum Wage rates - an ultra-long-haul band of air passenger duty introduced. Some Budget proposals may be subject to amendment in the Finance Bill 2021-22. Should you need any further help or support please contact us. ## Personal Tax ### The personal allowance The personal allowance is currently £12,570. The Chancellor announced in the March 2021 Budget that the personal allowance will be frozen at £12,570 for the tax years 2022/23 to 2025/26. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. So there is no personal allowance where adjusted net income exceeds £125,140. ### The marriage allowance The marriage allowance permits certain couples, where neither party pays tax in the tax year at a rate other than the basic rate, to transfer £1,260 of their personal allowance to their spouse or civil partner. | #### Comment | |---| | The marriage allowance reduces the recipient’s tax bill by up to approximately £250 a year. To benefit from the marriage allowance one spouse or civil partner must normally have no income or income below the personal allowance for the year. The marriage allowance was first introduced for 2015/16 and there are couples who are entitled to claim but have not yet done so. It is possible to claim for all years back to 2017/18 where the entitlement conditions are met. The total tax saving for all years up until 2021/22 could be over £1,000. A claim for 2017/18 will need to be made by 5 April 2022. | ### Tax bands and rates The basic rate of tax is 20%. In 2021/22 the band of income taxable at this rate is £37,700 so that the threshold at which the 40% band applies is £50,270 for those who are entitled to the full personal allowance. At Spring Budget 2021, the Chancellor announced that the basic rate band will be frozen at £37,700 for the tax years 2022/23 to 2025/26. The National Insurance contributions Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 for these years. Individuals pay tax at 45% on their income over £150,000. #### Scottish residents The tax on income (other than savings and dividend income) is different, for taxpayers who are resident in Scotland, from that paid by taxpayers resident elsewhere in the UK. The Scottish income tax rates and bands apply to income such as employment income, self-employed trade profits and property income. In 2021/22 there are five income tax rates which range between 19% and 46%. Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. The two higher rates are 41% and 46% rather than the 40% and 45% rates that apply to such income for other UK residents. Currently the 41% band applies to income over £43,662 for those who are entitled to the full personal allowance. The 46% rate applies to income over £150,000. The Scottish Government will announce the Scottish income tax rates and bands for 2022/23 in the Scottish Budget on 9 December. #### Welsh residents From April 2019, the Welsh Government has had the right to vary the rates of income tax payable by Welsh taxpayers (other than tax on savings and dividend income). The UK government has reduced each of the three rates of income tax paid by Welsh taxpayers by 10 pence. For 2021/22 the Welsh Government has set the Welsh rate of income tax at 10 pence which has been added to the reduced rates. This means the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. The Welsh Government will publish its Draft Budget for 2022/23 on 20 December. ### Tax on savings income Savings income is income such as bank and building society interest. The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of income tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers. Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000. ### Tax on dividends The first £2,000 of dividends is chargeable to tax at 0% (the Dividend Allowance). Dividends received above the allowance are taxed at the following rates for 2021/22: - 5% for basic rate taxpayers - 5% for higher rate taxpayers - 1% for additional rate taxpayers. In September 2021 the government announced an increase to the rates of dividend tax by 1.25% from 6 April 2022 to help fund the new planned investment in health and social care. The new rates will therefore be 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate taxpayers. Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the Dividend Allowance. To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed. | #### Comment | |---| | Dividends on shares held in ISAs and pension schemes are not subject to dividend tax and thus will not be affected by the increase in rates. | ### Green National Savings and Investment (NS&I) product In the Spring Budget 2021 the government announced a green retail savings product through NS&I. The Bonds are now available to buy online and offer savers a chance to support green projects at a fixed rate of 0.65% pa over a three-year term. The Bonds are available to those aged 16 or over, with a minimum investment of £100 and a maximum limit of £100,000 per person. The interest is taxable in the tax year the Bond matures. The UK’s inaugural sovereign green bond (or ‘green gilt’) was launched in September 2021, and was followed by a second issuance in October 2021. They are the first sovereign green retail product of their kind in the world. ### Universal Credit The Universal Credit taper rate is reduced from 63% to 55%, meaning Universal Credit claimants will be able to keep an additional 8p for every £1 of net income they earn. ### Increase to the normal minimum pension age The current earliest age at which most pension savers can access their pension savings without incurring a tax charge is age 55. From April 2028 this earliest age will rise to 57. This measure will affect individuals born after 5 April 1973 whose earliest date to access their pension benefits will see a two-year delay to those born on or before that date. ### Pensions – Scheme Pays Although there are no limits to how much an individual can save or accrue in a registered pension scheme, there is an overall limit on the amount of an individual’s tax-relieved annual pension savings or accrual which includes employer contributions. This is known as the annual allowance and the standard annual allowance is currently £40,000, but in some circumstances this is reduced, with the maximum reduction taking it down to £4,000. An individual’s unused annual allowance from the three previous tax years can be carried forward and added to the annual allowance. However, if the individual’s pension savings for the tax year exceed their annual allowance, the annual allowance tax charge is applied to the excess. Although this tax liability would normally be the individual’s liability it is possible for them to elect for the pension scheme administrator to be jointly liable. Where an individual has inputted more than £40,000 and their annual allowance charge exceeds £2,000 the individual can request that their pension company pays the charge for them in return for an equivalent reduction in the value of their pension pot. This is called mandatory Scheme Pays. From April 2022 there will be a change to the rules for certain pension schemes to remove anomalies where the tax charge has arisen due to a retrospective change of facts, the tax charge is £2,000 or more and the individual requests the pension scheme pays the amount. This measure applies retrospectively from 6 April 2016. ## Employment ### National Insurance Contributions (NICs) In September 2021 the government published its proposals for new investment in health and social care in England. The proposals will lead to a permanent increase in spending not only in England but also by the devolved governments. To fund the investment the government will introduce a UK-wide 1.25% Health and Social Care Levy based on the NIC system but ring fenced for health and social care. The Health and Social Care Levy Act provides for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23. From April 2023 onwards, the NIC rates will decrease back to 2021/22 levels and will be replaced by a new 1.25% Health and Social Care Levy. Broadly, the new Health and Social Care Levy will be subject to the same reliefs, thresholds and requirements as NIC. However the Levy (as opposed to the temporary increase in NICs for 2022/23) will also apply to those above State Pension age who are still in employment. Existing reliefs for NICs to support employers will apply to the Levy. Companies employing apprentices under the age of 25, all people under the age of 21, veterans and employers in Freeports will not pay the Levy for these employees as long as their yearly gross earnings are less than £50,270, or £25,000 for new Freeport employees. The Employment Allowance, which reduces employers’ Class 1 NICs by up to £4,000, will also be available for the employers’ liability to the Levy. | #### Comment | |---| | A novel aspect of the Levy is the application to employees above State Pension age. This does not apply in respect of the temporary increase for 2022/23. The Levy will not apply to Class 2 (a flat rate paid by many self-employed) and Class 3 (voluntary contributions for taxpayers to fill gaps in their contribution records). The main burden of the 1.25% increase falls on the collective shoulders of the employer and employee as each will have higher contributions to make. Those with property income will be relieved that they are not being included in the Levy. | ### National Living Wage (NLW) and National Minimum Wage (NMW) Following the recommendations of the independent Low Pay Commission, the government will increase the NLW for individuals aged 23 and over by 6.6% from 1 April 2022. The government has also accepted the recommendations for the other NMW rates to be increased. From 1 April 2022, the hourly rates of NLW and NMW will be: - £9.50 for those 23 years old and over - £9.18 for 21-22 year olds - £6.83 for 18-20 year olds - £4.81 for 16-17 year olds - £4.81 apprentice rate for apprentices under 19, and those 19 and over in their first year of apprenticeship. | #### Comment | |---| | In total, the annual gross earnings of a full-time worker on the NLW will have increased by over £5,000 since its introduction in April 2016. | ### Power to make temporary modifications of taxation of employment income This will allow HM Treasury, under ministerial direction, to make regulations to make temporary modifications to existing legislation for a period of up to two tax years in the event of a disaster or emergency of national significance as determined by HM Treasury. This will enable the government to support taxpayers, for example by: - exempting benefits in kind of a specified description from income tax where appropriate - changing the qualifying conditions for exemptions on benefits in kind - exempting specified reimbursements from the charge to income tax - providing relief for specified expenses. This will have effect on and after the date of Royal Assent to the Finance Bill 2021-22. ## Business ### Making Tax Digital for income tax The Making Tax Digital (MTD) regime is based on businesses being required to maintain their accounting records in a specified digital format and submit extracts from those records regularly to HMRC. It had been expected that sole trader businesses and landlords with business income of more than £10,000 per annum would be required to enter the MTD regime for income tax purposes from 6 April 2023. However, HMRC recently announced that this will be deferred until 6 April 2024. Early adoption of digital record keeping and voluntary submission of MTD for income tax data remains possible. Following the deferral for sole trader businesses and landlords, general partnerships will not be required to comply with MTD for income tax until 6 April 2025 and the date other types of partnerships (for example limited liability partnerships) will be required to comply will be confirmed in the future. HMRC has also confirmed that the new system of penalties for the late filing and late payment of tax for income tax self assessment will be aligned with when a taxpayer becomes mandated into MTD for income tax. For individuals without trade or property income or otherwise exempt from MTD for income tax, the new penalty regime will apply to their income tax affairs from 6 April 2025. #### MTD for corporation tax HMRC has previously announced that MTD for corporation tax will not be mandated before 2026. ### Accounting periods that are not aligned to tax years Aligned to the revised start date for MTD for income tax, changes will be made to simplify the rules under which trading profits made by self-employed individuals and partnerships are allocated to tax years. The changes mainly affect unincorporated businesses that do not draw up annual accounts to 31 March or 5 April. The transition to the new rules will take place in the 2023/24 tax year and the new rules will come into force from 6 April 2024. Affected self-employed individuals and partnerships may retain their existing accounting period but the trade profit or loss that they report to HMRC for a tax year will become the profit or loss arising in the tax year itself, regardless of the chosen accounting date. Broadly this will require apportionment of accounting profits into the tax years in which they arise. | #### Example | |---| | A business draws up accounts to 30 June every year. Currently, income tax calculations for 2024/25 would be based on the profits in the business’s accounts for the year ended 30 June 2024. The change will mean that the income tax calculations for 2024/25 will be based on 3/12 of the profits for the year ended 30 June 2024 and 9/12 of the profits for the year ended 30 June 2025. | This change will potentially accelerate when business profits are taxed but transitional adjustments in 2023/24 are designed to ease any cashflow impact of the change. | #### Comment | |---| | An estimated 93% of sole traders and 67% of trading partnerships draw up their accounts to 31 March or 5 April and thus the current rules are straightforward and the proposed changes will not affect them. Those with a different year end might wish to consider changing their accounting year end to simplify compliance with tax rules. | ### Corporation tax rates The main rate of corporation tax is currently 19%. In the Spring Budget 2021, the Chancellor announced the rate would remain at 19% until 1 April 2023 but the rate will then increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate. ### Capital allowances #### Plant and machinery Most corporate and unincorporated businesses are able to utilise a £200,000 annual investment allowance (AIA) to claim 100% tax relief on their qualifying expenditure on plant and machinery. The allowance was temporarily increased to £1 million for expenditure incurred on or after 1 January 2019 and was due to revert back to £200,000 from 1 January 2022. The £1 million allowance will now be retained until 31 March 2023. Transitional rules will apply to accounting periods that span 1 April 2023. For companies, this aligns the end of the temporary AIA with the end of the ‘super-deductions’ as announced by the government in Spring Budget 2021. | #### Reminder – super-deductions | |---| | Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery are able to benefit from new capital allowances, termed ‘super-deductions’ or ‘first year allowances’, as follows: • a super-deduction of 130% can be claimed on most new plant and machinery investments that ordinarily qualify for the 18% main rate writing down allowances • a first year allowance of 50% can be claimed on most new plant and machinery investments that ordinarily qualify for the 6% special rate writing down allowances. These reliefs are not available for unincorporated businesses. | | #### Comment | |---| | Businesses incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. In 2023 not only will the tax relief rules for expenditure on plant and machinery change, for companies the percentage corporation tax relief saving on the expenditure may change as well. | #### Structures and Buildings A Structures and Buildings Allowance (SBA) was introduced with effect from 29 October 2018 to relieve costs for new structures and buildings used for qualifying purposes. A business must hold an allowance statement containing certain information to be eligible to claim SBA. Minor changes will be made to the allowance statement requirements to clarify the information required to be kept. ### Annual Tax on Enveloped Dwellings The Annual Tax on Enveloped Dwellings (ATED) charges increase automatically each year in line with inflation. The ATED annual charges will rise by 3.1% from 1 April 2022 in line with the September 2021 Consumer Price Index. ### Residential Property Developer Tax A new tax will be applied from 1 April 2022 on company profits derived from UK residential property development. The tax will be charged at 4% on profits exceeding an annual allowance of £25 million. For companies that are part of a group, the £25 million allowance will be allocated by the group between its companies. ### Cultural relief The government has announced that it will temporarily increase cultural tax reliefs for theatres, orchestras, museums and galleries across the UK from 27 October 2021 to 31 March 2024, increasing the relief organisations can claim as they invest in new productions and exhibitions. Changes will also be introduced to better target the cultural reliefs and ensure that they continue to be safeguarded from abuse. These will apply from 1 April 2022. ### Research and Development relief reform Research and Development (R&D) tax reliefs for companies will be reformed to: - support modern research methods by expanding qualifying expenditure to include data and cloud costs - more effectively capture the benefits of R&D funded by the reliefs through refocusing support towards innovation in the UK - target abuse and improve compliance. These changes will take effect from April 2023. ### Cross-border group relief Following the UK’s exit from the European Union (EU), the government is bringing the corporation tax group relief rules relating to European Economic Area (EEA) resident companies into line with those for non-UK companies resident elsewhere in the world. This applies to accounting periods ending on or after 27 October 2021 and will affect UK groups with subsidiary companies established in the EEA along with EEA-resident companies that are trading in the UK through a permanent establishment. ### Online Sales Tax The government has announced its plans to consult and explore the arguments for and against the introduction of an ‘Online Sales Tax’. Should such a tax be introduced in future, it would raise revenue to fund business rates reductions. ### Business rates review Business rates have been devolved to Scotland, Northern Ireland and Wales. The government announced at Budget 2020 that it would conduct a fundamental review of the business rates system in England. The government’s objectives for the review were reducing the overall burden on business, improving the current business rates system and allowing the consideration of more fundamental changes in the long term. In March 2021, the government published the Interim Report of the review. The Final Report was published on 27 October 2021. Collectively, these set out the government’s commitments by: - Supporting local high streets as they adapt and recover from the pandemic by introducing a **new temporary business rates relief**in England for eligible retail, hospitality and leisure properties for 2022/23. Over 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022/23. This amounts to support worth more than double the relief that was announced pre-COVID for the 2020 to 2021 financial year and includes additional businesses such as hotels, gyms and bowling alleys. - Cutting the burden of business rates for all businesses by **freezing the multiplier**for 2022 to 2023. - Introducing a **new relief to support investment in property improvements**, enabling occupying businesses to invest in expanding their properties and making them work better for customers and employees. - Introducing **new measures to support green investment**and the decarbonisation of non-domestic buildings. This will provide exemptions for eligible green plant and machinery such as solar panels, wind turbines and battery storage used with renewables and electric vehicle charging points, as well as a 100% relief for low-carbon heat networks that have their own rates bill. - Making the system fairer by moving to **three-yearly revaluations from 2023**. - Providing stability ahead of the 2023 revaluation by **extending Transitional Relief and the Supporting Small Business Scheme for 2022 to 2023**to protect small businesses from significant bill increases in the final year of the current revaluation cycle. ## Capital Taxes ### Capital gains tax (CGT) rates No changes to the current rates of CGT have been announced. This means that the rate remains at 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains, mainly chargeable gains on residential properties, with the exception of any element that qualifies for Private Residence Relief. There is still potential to qualify for a 10% rate, regardless of available income tax basic rate band, up to a lifetime limit for each individual. This is where specific types of disposals qualify for: - Business Asset Disposal Relief (BADR). This is targeted at directors and employees who own at least 5% of the ordinary share capital in the company, provided other minimum criteria are also met. It can also apply to owners of unincorporated businesses. - Investors’ Relief. The main beneficiaries of this relief are investors in unquoted trading companies who have newly-subscribed shares but are not employees. Current lifetime limits are £1 million for BADR and £10 million for Investors’ Relief. ### CGT annual exemption The CGT annual exemption will be maintained at the current level of £12,300 for 2022/23 and up to and including 2025/26. ### CGT reporting and payment following a property disposal UK resident individuals who dispose of UK residential property are sometimes required to deliver a CGT return to HMRC and make a payment on account of CGT within 30 days of completion of the property disposal. Broadly, this only applies where the property disposal gives rise to a CGT liability and as such usually excludes the disposal of a property to which private residence relief applies. Non-UK residents are subject to similar deadlines in respect of the disposal of all types of UK land and property. In both cases, for disposals that complete on or after 27 October 2021, the reporting and payment deadline is extended to 60 days following the completion of the disposal. From the same date, changes will clarify that for UK residents disposing of a mixed use property, only the portion of the gain that is the residential property gain is required to be reported and paid. ### Inheritance tax (IHT) nil rate bands The nil rate band has been frozen at £325,000 since 2009 and this will now continue up to 5 April 2026. An additional nil rate band, called the ‘residence nil rate band’ (RNRB) is also frozen at the current £175,000 level until 5 April 2026. A taper reduces the amount of the RNRB by £1 for every £2 that the ‘net’ value of the death estate is more than £2 million. Net value is after deducting permitted liabilities but before exemptions and reliefs. This taper will also be maintained at the current level. ## Other Matters ### Tonnage Tax The UK’s tonnage tax regime will be reformed from April 2022 to help the UK shipping industry grow and compete in the global market. The reform is intended to make it easier for shipping companies to move to the UK, ensure they are not disadvantaged compared with firms operating in other countries, and reduce unnecessary administrative burdens. ### Landfill Tax As announced at Spring Budget 2021 both the standard and lower rates of Landfill Tax will increase from 1 April 2022 in line with the Retail Prices Index (RPI). ### Gaming Duty The government will raise the bandings for Gaming Duty in line with inflation. The new bandings will affect Gaming Duty accounting periods commencing on or after 1 April 2022. ### Vehicle Excise Duty (VED) The government will increase VED rates for cars, vans, motorcycles, and motorcycle trade licences in line with RPI with effect from 1 April 2022. For heavy goods vehicles, VED continues to be frozen in 2022/23. The HGV Levy is suspended for another 12 months from 1 August 2022. ### Tobacco Duty Increases in Tobacco Duty rates take effect from 27 October 2021 and the government will legislate in Finance Bill 2021-22 to introduce tougher sanctions to tackle Tobacco Duty evasion. ### Alcohol Duty Rates of Alcohol Duty were not changed in this Budget. The government is publishing a consultation on its detailed proposals for Alcohol Duty reform. These include: - changes to duty structures - new rates for some products sold on draught - extension of small producer reliefs - simplification of the administrative regime. In addition alcohol duties have been frozen to February 2022. ### Air Passenger Duty (APD) The government will introduce a new domestic band for APD for reduced rate and standard rate travel, covering flights within the UK. In addition, a new ultra-long-haul band will be introduced, covering destinations with capitals located more than 5,500 miles from London. These changes will take effect from 1 April 2023. ### Freeports The government announced its plans for Freeports in 2020. Freeports are specified geographical areas that allow certain benefits to businesses operating within them. The main VAT benefit is that businesses selling goods within free zones will be able to zero-rate their supplies. Services carried out on goods in those zones may also be zero-rated subject to conditions. The government will introduce an additional element to the VAT free zone model for Freeports. This will implement a free zone exit charge to ensure businesses do not gain an unintended tax advantage from the zero-rate in the free zone model. The measure will take effect from 3 November 2021. ### VAT on second-hand cars sold in Northern Ireland In a measure that will be backdated to 1 January 2021, motor dealers in Northern Ireland will be able to include motor vehicles sourced from Great Britain in their second-hand margin scheme calculations. This measure will apply should a relevant agreement be reached with the EU. ### Second-hand Motor Vehicle Export Refund Scheme Under this scheme, businesses that remove used motor vehicles from Great Britain for resale in Northern Ireland or the EU may be able to claim a refund of VAT following export. The power will come into effect on Royal Assent of Finance Bill 2021-22. Legislation outlining the detail of the scheme will be introduced in 2022. ### VAT treatment of fund management fees A consultation will take place on options to simplify the VAT treatment of fund management fees. ### VAT penalties Budget documents confirm that the new late submission and late payment penalties for VAT will still come into effect for VAT registered businesses for accounting periods starting on or after 1 April 2022, as announced at Spring Budget 2021. ### Plastic Packaging Tax Draft legislation has been issued to establish a Plastic Packaging Tax. This is a new tax that applies to plastic packaging produced in or imported into the UK, that does not contain at least 30% recycled plastic. Plastic packaging is packaging that is predominantly plastic by weight. The tax rate will be £200 per tonne of non-compliant plastic packaging. There will be an exemption for businesses that manufacture or import less than ten tonnes of plastic packaging per year. The tax will take effect from April 2022. **Categories:** Budget, New to contracting, News, Running your business, Tax **Tags:** Kerry Newman --- ### [Electric cars – how much tax can you expect to pay?](https://sg-accounting.co.uk/blog/electric-cars-how-much-tax-can-you-expect-to-pay/) **Published:** November 22, 2021 **Author:** Kerry Newman **Content:** The recently announced tax band changes have meant that purchasing an electric car is a more realistic possibility than ever before. Along with the planned ban on petrol and diesel cars from 2030 onwards, you may be considering upgrading your current car. So what are your options when purchasing an electric car, and are there any attractive tax benefits? In this blog we explore just that, to help you understand how much tax you can expect to pay. **Company cars** Purchasing a company car through your Limited Company was once an enviable perk available only to those who ran their own companies, but over time the increase in tax and perceived hassle that comes with a company car seems to have put many off. But now with the introduction of electric cars and recent HMRC changes, if you’re looking to upgrade your luck is in. **Electric cars popularity** With a predicted growth in popularity at a compound rate of 29% between now and 2030, electric cars are set to play a major role in the government’s push to reduce the UK’s carbon emissions. To ensure their targets are met, the Benefits in Kind (BiK) tax for electric company cars in 2020 was reduced to zero. The BiK rate is going to rise soon, but even with this rise they will still offer a fantastic deal. **How will electric cars be taxed?** Currently company car tax is spilt between what your Limited Company pays, and what you as an employee of your Limited Company pays. The amount of tax will be dependent on its actual value, the BiK tax and the car’s emissions. Depending on what tax band you’re currently in, as an employee you’ll have to pay income tax on this value. For example: **Basic rate tax –** you’ll pay 20% **Higher rate tax band –** you’ll pay 40% In order to calculate your employee tax you’ll need to work out the following: (P11D value) x (BiK band) x (tax bracket). Your Client Director will be able to calculate this for you. Your Limited Company will also need to pay National Insurance Contributions (NICs) on your company car. BiK tax comes in various bands, and the higher the Co2 emissions, the higher the band you’ll fall into. You can check your car’s Co2 emissions and your tax band by [visiting the gov.uk website](https://www.gov.uk/co2-and-vehicle-tax-tools). Up until April 2020, electric cars’ BiK tax was 16%, so for example if the list price of your electric car was £30,000 you’d have a benefit in kind of £4,800 (16% of £30,000). You would then pay income tax personally on this, depending on which tax band you’d fall into (20% or 40%). Your company would also pay National insurance on this via form P11D (13.8% of the benefit in kind). April 2021 brought good news for electric car owners, as the BiK dropped from 16% to 0%. It will, however rise to 1% in 2021/22, and then to 2% in 2022/23. Beyond that there hasn’t been any word on how much the government is planning to increase the tax by in the upcoming years, but they have committed to release any planned increases to BiKs at least two years in advance, to allow people to plan ahead accordingly, and to provide certainty. **What about the tax on vans?** If you purchase a van for personal and professional use, you’ll be liable to pay a ‘van benefit charge’ which is currently £3,500. Like with cars, you’d need to personally pay 20% (or 40% if in the higher rate) of the BIK (£3,500) via your Self-Assessment Tax return, and 13.8% via your Limited Company’s P11D. **Are things different for plug-ins to other hybrids?** A hybrid’s BiK will be dependent on the distance they can travel whilst remaining in their low electric mode, as well as their Co2 emissions. For example: **If your petrol hybrid can travel between 30 and 39 miles alone –** you’ll pay a BiK at 11% **If your petrol hybrid can travel between 40 and 69 miles alone –** you’ll pay a BiK at 7% Whilst the BIK rates are higher than pure electric models, it’s still significantly lower than the BiK rates (up to 37%) you’d pay for a purely petrol or diesel car. **Which is best?** If you’re considering a vehicle with electric capabilities but aren’t quite ready to give up the freedom and peace of mind that a fuel driven car provides, then a hybrid might be best for you. Whilst the government is keen to get more electric plugs and points across the country, there’s still the very real possibility that you could be caught short, and therefore having the backup of fuel on board could be a deal breaker. There’s no doubt that by 2030 when the ban comes into force that charging points and batteries with a longer life will be in abundance, but until that time it might best to air on the side of caution. **Are there any other savings?** By having a low emissions car you could be eligible for some Corporation Tax savings. For some low emission cars, there’s 100% first year allowance, which ultimately means you can put the cost of your car’s purchase towards reducing the profits from your Limited Company and ultimately save on Corporation Tax. If you decide to lease rather than purchase the car, you can also use the lease payments to offset your company’s profits, and also therefore reduce Corporation Tax liability. **What does the future hold for electric cars?** There’s no denying that there’s a few logistical issues for electrical cars to get around before they’re as convenient as their fuel guzzling counterparts. That being said they are becoming increasingly popular, and as this blog has shown, cheaper from a tax point of view. We’re still a good 8/9 years away from when the ban will come into play, so there’s plenty of time for the technology to develop, and so you may not be considering taking the leap just yet. But if you’re thinking about purchasing a new car, either now or maybe in the next year or so, we suggest speaking to an expert accountant who will be able to advise you further on the amount of tax you can expect to pay, based on your personal circumstances. [Get in touch today](https://sg-accounting.co.uk/contact/) to see how we can help. **Categories:** Expenses, Running your business, Tax **Tags:** Kerry Newman --- ### [The effects of the levy on dividend rates in April 2022 and how this affects small business owners](https://sg-accounting.co.uk/blog/the-effects-of-the-levy-on-dividend-rates-in-april-2022-and-how-this-affects-small-business-owners/) **Published:** November 29, 2021 **Author:** Kerry Newman **Content:** The government recently announced a rise in National Insurance and dividend tax rates that’ll come into force from April 2022 onwards, with an aim of raising the much needed funds for the new [Social Care and Health levy](https://commonslibrary.parliament.uk/research-briefings/cdp-2021-0139/). So what does this mean for Limited Company contractors, and how will they be affected? In this blog we explore just that, to help you prepare for the impending changes. **What’s changing?** The same 1.25% rate of increase will apply to both Employers’ and Employees’ NICs, and dividend tax bands. These increases are estimated to bring in an extra £12 billion per year. **What does this mean for Limited Company contractors?** **National Insurance Contributions (NICs)** As a Limited Company contractor paying yourself a wage, you could be affected by the 1.25% to Class 1 and Class 4 NICs. If you’re earning above the Class 1 primary threshold of £9,568 in tax year 2021/22, you’ll pay an additional 1.25% on the existing Class 1 contributions. If you employ people within your Limited Company, you’ll also pay an additional 1.25% on your contributions above the current Class 1 threshold of £8,840 for the tax year 2021/22. So you could potentially end up having to pay an additional 2.5%. If you pay Class 4 NICs you’ll have to pay an additional 1.25% on any earnings above the lower profits threshold of £9,568 in 2021/22. **The increase in dividend tax** Dividend tax will also increase by 1.25% from April 2022, therefore the new rates will be as follows: - **Basic Rate Taxpayer –** will increase from 7.5% to 8.75% - **Higher Rate Taxpayer –** will increase from 32.5% to 33.75% - **Additional Rate Taxpayer –** will increase from 38.1% to 39.35% Whilst these increases are an unwelcome addition, the dividend allowance of the first £2,000 of dividend income, remains unchanged. **How much extra can you expect to pay?** **Example – salary of £8,840 and dividends using up the full basic rate band** If your salary is £8,840 and you take out the maximum amount of dividends available to you, then you can expect to pay an additional £450 from April 2022 onwards. This equates to the extra 1.25% on your dividends in the basic rate band. **Example – if you take dividends in the higher rate threshold** You can expect to pay around an additional £12.50 per £1,000 of dividends taken within that tax band. **How Limited Company contractors have reacted to the announcement** Sadly, during the pandemic Limited Company contractors were exempt from receiving any financial help from the government, particularly in the form of the SEISS Scheme which was made available to other self-employed people. Many feel it’s greatly unfair that this new rise in dividend tax is partially being used to pay for this scheme which they never had access to, and are understandably upset by the government’s decision. Limited Company contractors have be in the line of fire for a number of years now, with the IR35 reform earlier this year, and a significant dividend tax increase back in 2016. The Chancellor of the Exchequer has also announced a Corporation Tax increase from 19% to 23% in 2023. This will, once again prove to make a sizable dent in contractor’s profits in the form of tax. **How SG Accounting can help you prepare** Whilst we can’t make the Chancellor reduce taxes, we can ensure we’re prepared for when the increase comes into play. We always work towards making you as tax efficient as possible, but if you’d like to talk to us specifically about this matter, then please do arrange a time to discuss this with your associated Client Director. **Categories:** News, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [A Limited Company Contractor's year-end tax checklist](https://sg-accounting.co.uk/blog/a-limited-company-contractors-year-end-tax-checklist/) **Published:** March 2, 2022 **Author:** Kerry Newman **Content:** Don’t miss out, be sure to make the most of your tax-saving opportunities before April 6 2022. The end of the current tax year is almost here, so now is the perfect time to take stock of any unused allowances to reduce your tax bill. This blog explores the top ten ideas to consider to ensure that your contractor take-home pay works as hard as possible. - Make use of your £20,000 ISA allowance - If you have a spouse or partner, be sure they’ve also fully used their ISA allowance to ensure you’ve utilised the combined £40,000 allowance - If you have children, contribute up to £9,000 payments per child into their Junior ISA - If you’re hoping to maximise your pension savings, you need to consider utilising your pension’s annual allowance of up to £40,000. You can carry forward any unused allowance, but only for the previous three years. So if you’ve already utilised your 2021/22 pension allowance, take a look over your last three years to see if there are any unused allowances available - If you’re a high-income earner, you’re able to reduce your taxable income by making pension contributions or charitable donations. By doing so, you’re able to: - - Reduce your income to below the additional rate tax band, which begins at £150,000 - - Regain your Personal Allowance, which begins to be withdrawn once your income exceeds £100,000 - Avoid losing out on Child Benefit, which begins to reduce and /or be cancelled once one parent in the household earns more than £50,000 pa - - Release £12,300 in gains this tax year to ensure you’re taking advantage of your Capital Gains Tax (CGT) allowance. An increase is rumoured to be on the cards soon, so be sure to make the most of the current rate whilst you’re still able to - Use your IHT gifting exception of £3,000 for this tax year - Minimise your Income Tax Liability – spread any large pension withdrawals over two or more tax years - Avoid National Insurance Contributions (NICs) by ensuring you pay yourself a low salary and top up your earnings in the form of dividends. Remember that the first £2,000 dividend income is taxed at 0% - Reduce your company’s liability to Income Tax (including on dividends), Corporation Tax and NICs by diverting your company’s pre-tax profits into a personal pension. You’ll have to make any contributions before your company’s financial year-end, so your company qualifies for the deduction in that accounting period. Always take advice from your trusted contractor accountant before actioning any of the above points. **Tax planning doesn’t end there** Other than actioning the previous ten points before April 6 2022, there are other areas you’re able to focus on to minimise your tax and make your contracting money work as hard as possible for you. However, the following points tend to have a greater impact if started prior to the start of the new tax year, so give them some consideration now and discuss further with your SG accountant. This list isn’t exclusive and only includes and covers the tax opportunities that are available to those who reside within the UK for the 2021/22 and 2022/23 tax years. Tax planning plays an important part in running your Limited Company, but it doesn’t form the entire picture. Your SG Accountant will be able to advise you further based on your own personal and professional circumstances. **Income tax** - Avoid 45% tax by reducing your income below the £150,000 pa threshold. Making pension contributions allows you to reduce your taxable income - If you’re in a civil partnership or married, be sure you both have sufficient income to use your personal allowance, which is £12,570 - If your adjusted new income is above £100,000 pa, then the personal allowance will be gradually withdrawn. For those with incomes exceeding £100,000 before April 6 2022, who are making personal pension contributions, they’re able to reduce their income to below £100,000 to restore all / some of the 2021/22 personal allowance that would otherwise be lost - Consider investing in tax-free investments, such as ISAs. This will replace taxable income and gains, with tax-free income and gains or investment bonds which can provide valuable tax deferment - Consider distributing your investment capital between spouses / civil partners. This potentially could reduce the rate of tax incurred on income and gains. If you’re living with your spouse / civil partner, or where the asset that’s to be transferred is an investment bond, then no capital gains tax or income tax liability will arise on transfers between one and another **Pension planning opportunities** - The carryforward rule allows you to use any unused annual allowance for a maximum of three years. If you do have any unused allowance, April 5 2022, will be the last date you’re able to carry it over up to the value of £40,000 from the 2018/19 tax year - In 2021/22, the threshold income level and the adjusted income level for the tapered annual allowance are £200,000 and £240,000. This should mean the tapered annual allowance will impact fewer pension members from 2021/22 than in previous years. This will ultimately mean higher pension savings, along with the possibility of avoiding a tax charge - If your adjusted net income exceeds £100,000, then the personal allowance reduces in value by £1 for every £2 earnt. So for the tax year 2021/22, there won’t be any personal allowance for anyone whose adjusted net income exceeds £125,140. By making extra pension contributions, you’ll not only be increasing your pension provisions, but if you’re also subject to the reduced personal allowance, then a personal pension contribution could claw back some of this allowance, giving an effective tax saving of around 60%, and possibly more with salary sacrifice - Pension contributions can also help those with families out. If a single member of a household earns £50,000 pa or above, their child benefits are reduced or even stopped should you earn £60,000 or above - The death benefit rules on pensions from April 6 2015, should have instigated a review of the pension scheme and/or the expressions of wish regarding the recipients of pension death benefits. If this has not yet been done, now is the time to do so. So, in theory a person’s pension plan could provide an income for the people they leave behind, as beneficiaries will be able to pass the money to their children and so on and so forth - Individuals should consider making personal net pension contributions of up to £2,880 (£3,600 gross) per year for family members, including any children and grandchildren, who do not yet have the relevant UK earnings. The basic rate tax relief of £720 added by the Government each year is a significant benefit, and the sooner pension contributions are started, the greater they’ll benefit from compounded tax-free returns **ISAs and JISAs** - You’re unable to carry forward any unused subscription amount into the new tax year, so any annual subscriptions (£20,000 and £9,000, respectively) should be maximised before April 6 **EISs / VCTs** - EISs – you’re able to invest up to £1 million, or £2 million, where any amount above £1 million is invested in knowledge-intensive companies. The maximum income tax relief is 30%. Unlimited capital gains tax deferral scheme relief – so long as some of the EIS investment could potentially qualify for income tax relief. It must be paid by April 6 2022, to be able to carry back an EIS subscription for tax relief in 2020/21 - VCTs – up to £200,000 can be invested, and the maximum income tax relief is 30%. There are no abilities to defer capital gains tax, but any dividends and capital gains generated on amounts invested within the annual subscription limit are tax-free **Be aware** – of the likely higher risk in investment and lower liquidity that will need to be accepted in return for the enticing tax reliefs offered by EISs and VCTs. **Capital gains tax (CGT)** CGT planning is based around the action either ahead of or at the time of the disposal of an asset to reduce or eradicate a current or future liability to CGT. This process may involve the following: - The timing of the transaction – i.e.- either bringing it forward or delaying it - Ensuring that all of the available exemptions and reliefs have been taken full advantage of - Depending on what your own personal objectives are, prior transactions such as transfers to a spouse / civil partner, or the use of a trust - Making full use of the annual exempt amount - Also, make full use of any available losses Capital gains tax planning - Make the most of this year’s annual exemption (£12,300). Any unused amount cannot be carried forward, so be sure to use it all - You’ll need to make a disposal after April 5 2022, if you wish to defer the tax payment for a year - If you’re planning on using two annual exemptions close to one another, you’ll need to make one before April 6 2022, and the other one after this date If you have a spouse / civil partner, ensure they use their annual exemption. You’re able to transfer assets between partners to facilitate this. **Inheritance tax** - Everyone has an annual exemption of £3,000 per tax year. You’re able to carry over any unused exemption for one year, so ensure to check if you have any outstanding and use it before April 6 2022 - The £250 annual exemption cannot be carried over into the next tax year. You’re able to make as many gifts up to the £250 limit as wish, that’ll be free from inheritance tax, so long as the person receiving the gift does not receive any part of the giver’s £3,000 annual exemption - Suppose you’re lucky enough to have income that’s surplus to your requirements. In that case, it could be a good idea to establish a plan whereby you give regular gifts from your income in order to make use of the normal expenditure out of income exemption. An excellent way to do so is by paying premiums into a whole life policy in trust, to provide for any inheritance tax liability **How can your SG accountant help?** It’s your SG accountant’s job to ensure you’re making the most of every available tax opportunity to maximise your take-home pay. So be sure you’re making the most of your money before the new tax year; get in touch with your accountant to understand which options are available to you and how much of each exemption is left for you to utilise. **Categories:** Tax **Tags:** Kerry Newman --- ### [The Spring Statement 2022 - what it holds for Limited Company contractors](https://sg-accounting.co.uk/blog/the-spring-statement-2022-what-it-holds-for-limited-company-contractors/) **Published:** March 23, 2022 **Author:** Kerry Newman **Content:** **In this blog our MD, Daniel Mepham, shares his thoughts from the March 2022 Spring Statement.** A much anticipated Spring Statement was delivered on March 23rd by Chancellor, Rishi Sunak against a backdrop of war in Ukraine, post pandemic super spending and an ever increasing rate of inflation. With that in mind I was expecting some headline grabbing announcements. I’ve highlighted below some of the key points, but if you want to see the full details you can read them in our full pdf guide: [Spring Statement March 22](https://sg-accounting.co.uk/wp-content/uploads/2022/03/Spring-Statement-March-22.pdf). - The National Insurance threshold is being increased by £3,000 to bring it in line with the Income Tax Personal Allowance. This is a Class 1 saving of over £330 per year now based on the increased rate of 13.25% including the new 1.25% Health and Social Care Levy - The planned Health and Social Care Levy of 1.25% will go ahead from April this year - Personal Income Tax will be reduced from 20% to 19% by the end of this government (2024). - The OBR predicts the rate of inflation for this year to average 7.4% and the economy to grow by 3.8% - For the next five years, there will be no VAT applied to energy-saving materials including solar panels, heat pumps and insulation - Fuel duty will be cut by 5p per litre from this evening at 6pm. This is a temporary measure until March next year - The employment allowance to help with the costs of Employers National insurance is being increased to £5,000 from £4,000. Single employee/Director companies are not eligible for this allowance If you are an SG client, your accountant will be in touch if these changes affect you. If you’re not an SG client but are a contractor looking for an accounting partner to guide you through the minefield of legislation and tax, then [get in touch](https://sg-accounting.co.uk/contact/) today. We’d love to hear from you. **Categories:** Budget, Spring Statement **Tags:** Kerry Newman --- ### [A Limited Company contractor's guide to getting paid your worth and negotiating your day rate](https://sg-accounting.co.uk/blog/a-limited-company-contractors-guide-to-getting-paid-your-worth-and-negotiating-your-day-rate/) **Published:** April 13, 2022 **Author:** Kerry Newman **Content:** Sadly it’s never been so expensive to live and work in the UK. With a rise in National Insurance, the ever increasing price of energy, fuel, food and other basic commodities, if you’re able to increase your rates in order to continue to make your contracting career as lucrative as possible, then now is a good time to consider how. In this blog we take a look at the ways in which you can achieve this, in order to command the rate you deserve for your next contract. 1. **What’s the current going rate?** Negotiating a higher rate is near impossible if you don’t have clear evidence of how much the current rate is for your skill set, level of experience, and location. Take a look to see what the average rate is based on those variables, and then compare what your current or last contract paid to see if you’re within the same range. If not then this is a good place to start, and see if your next client can offer any scope for a higher rate. It might sound obvious, but the location of an assignment can have a huge impact. Always ensure the location is included in your research, as city rates will always be higher, respectively. It’s also advisable to have a look on the specific contractor forums to see what your contracting colleagues are being paid. A good one to start with is [ContractorUK](https://forums.contractoruk.com/), where you’ll find likeminded contractors who will be able to give you advice. 2. **What are your strengths and skills actually worth?** If there were ten contractors with the same skills, what would you highlight to a prospective client in order to help you stand out from the crowd? Take a look at your professionalisms within the parameters of point one, and if you have any specific experience with a previous client or project that sets you above the rest, you’ll be in a much stronger position to command a higher day rate. 3. **Will you be found inside or outside of IR35?** All Limited Company contractors know that should they be found inside IR35 on any contract, they’ll have to pay the associated taxes and work under an Umbrella Company – both of which carry higher financial obligations then operating through your Limited Company, and therefore will mean a smaller take home pay. When you accept any contract ensure you consider the financial implication being found inside IR35 could have on your take home pay, and whether the rate will reflect this. Your accountant should be able to give you an illustration to show the difference in take home pay of working through an umbrella versus a Limited Company, and this can be used as a negotiating tool. 4. **Consider increasing your professional value** The world of contracting moves fast, and clients will want the most up to date skills and knowledge when it comes to choosing a contractor to complete their work. Is it time to update your qualifications and skills? If so then this will put you in good stead to command a higher rate. Your client gets what they pay for at the end of the day, so make yourself as attractive as possible. 5. **Have a discussion with your agency** If you use a recruitment agency to find contracts, be sure to discuss your thoughts with them. They’ll have similar contractors as yourself on their books, and will know how much they earn, and which clients offer the most for your skills, so it’s worth having a chat to see what their thoughts are and how you can get what you want. Be sure to present your rates research to your agency, to show you’ve done your groundwork and have a basis for your discussion. 6. **Be choosy with the contracts you accept** One downside of being self-employed is that you never know when your next contract will be, and therefore you may feel that it’s on the safer side to accept every contract that comes your way. If you’re new to contracting you may find that taking contracts which are on the lower rate side may still be worth your while, if the experience and client could open doors in the future. Whatever the reason for accepting a contract, look at the bigger picture to see how it can benefit you. There’s nothing wrong with being slightly picky! **Final thoughts** When you decide to change your day rate, the best and first place to start is with your professional worth, as you know your experience and skill set better than anyone else. It’ll be clear when your skills will need updating, or if a previous client isn’t paying what you’re worth. If you ever feel awkward asking for more remember that it’s business and not personal; it’s about your professional capabilities as a whole, and those come at a premium. If you’re on the lookout for a contractor accountant that’s expert in IR35 and tax advice, can offer Umbrella Company services at the flick of a switch, and financial advice when needed, then look no further. [Take a look at our full services](https://sg-accounting.co.uk/), or [get in touch to find out more](https://sg-accounting.co.uk/contact/). **Categories:** Finance, New to contracting, Running your business, Tax **Tags:** Kerry Newman --- ### [SG Accounting have been nominated in this year’s Contracting Awards!](https://sg-accounting.co.uk/blog/sg-accounting-have-been-nominated-in-this-years-contracting-awards/) **Published:** May 24, 2022 **Author:** Kerry Newman **Content:** We are so pleased and proud to announce that SG Accounting has been nominated in this year’s [Contracting Awards](https://www.contractingawards.co.uk/)! **What are the Contracting Awards?** Acknowledging the top service providers in the contracting industry, the Contracting Awards celebrate those providers who have gone above and beyond to provide excellence to their clients. This can be from tax and accounting, to recruitment and insurance. **Which awards are we up for?** SG are proud to be nominated within the ‘Best Contractor Accountancy – 1,000 to 2,499 clients’. We’re one of only four nominees that have been shortlisted within this category, so to even make it this far is a huge achievement, and reflection of the service we provide to our clients. **Why this award is important to us** Our client’s opinion of the services we provide will always be the most important thing to us, but it’s nice to also be recognised externally for providing excellent service and advice. Some new clients may also be attracted by an award, and it’s also always nice for existing clients to know their chosen contractor accountancy is the best. **When will the winners be announced?** The winners will be announced at a black tie event held at the Montcalm in London, on June 16th. We wish all other nominees the best of luck, but hope that in our category our service is recognised as the best! **Categories:** News **Tags:** Kerry Newman --- ### [SG’s 7 top tips for Limited Company contractors to reduce your income tax bill in 2022](https://sg-accounting.co.uk/blog/sgs-7-top-tips-for-limited-company-contractors-to-reduce-your-income-tax-bill-in-2022/) **Published:** May 24, 2022 **Author:** Kerry Newman **Content:** The tax year is now in full swing and whilst you currently might not be considering tax, it’s still a good idea to understand it’s importance, and how making it work in your favour could ultimately mean more money in your pocket. In this blog we explore the top 7 things you can be doing to reduce your income tax bill in 2022, and maximise your contractor take home pay. 1. **Make pension contributions** Personal pension contributions are made from taxed money, so whilst as a taxpayer you’d put in X net amount (for example 80% if you’re a basic rate tax payer, 60% if you’re a higher-rate tax payer, and 55% if you’re an additional-rate taxpayer), HMRC will contribute the tax paid on that contribution, directly into your pension scheme. The entire amount is therefore invested tax-free, so for example for a basic-rate taxpayer you pay £80 in yourself, and HMRC will top it up with £20. The investment will then grow without income tax and Capital Gains Tax. If you’re a UK resident that’s under 75 who’s currently not receiving your pension, then you’re able to contribute a maximum of £40,000 pa from your earnings, and still receive this tax relief. If you have a spouse ensure they’re doing the same and making the most from this allowance. 2. **Make pension contributions on behalf of your partner** The amount you can contribute depends on the circumstances of the pension owner, not the person who is making contributions. The amount that someone can pay into their pension(s) every year is either £40,000 or 100% of their earnings, whichever is lower. Even if you don’t earn, you can contribute up to £2,880 per year to a pension and still get tax relief at the basic rate. This even applies to children. Much like a Junior ISA, parents and legal guardians may set up a pension for a child, which will pass to them when they are 18. Once set up, anyone can make contributions up to a total of £2,880 per year for a child, boosted to £3,600 gross. Although it may seem like extreme forward planning, the tax-relief added to the compound interest built up over time make it an excellent way to save for your child’s or grandchild’s future. 3. **Ensure you’ve used all of your pension annual allowance** You’re able to carry over any unused pension annual allowance for the past three years, so it’s worth taking a look to make sure you’ve not got any outstanding allowance from 2019 onwards. The pension scheme must have been in place during those years, to qualify. 4. **Make a financial gift to charity** Gifts given to UK registered charities are exempt from income tax, so long as you sign a gift aid declaration when making the donation. For example, if you gave £80 of taxed money to a charity, HMRC will pay the additional 20%, so the charity would in fact receive £100. If you’re a higher or additional-rate tax payer then the tax bands are extended, respectively. 5. **Transfer investments to your partner** It’s advisable to revise any investments you may have annually, to ensure they’re in the best proportion for tax purposes, should you share them with your spouse. If the funds you have are generating interest, and your spouse does not receive income from employment, trading or property lettings that exceeds £17,570 in 2022/23, then the first £6,000 of the received amount will be tax-free. If your spouse does have non-savings earnings that exceed this amount, basic-rate tax payers should earn a minimum of £1,000 interest, and for higher-rate tax payers it’s £500 to be able to take advantage of the personal savings allowance. If the investment income generates dividends, then each spouse should hold enough capital to generate dividends of £2,000 (which is the annual dividends allowance – but be aware that this allowance is not means tested). 6. **Transfer your personal allowance to your partner** If you’re married, the marriage allowance permits you to transfer 10% of your personal allowance to your partner, and vice versa, so long as you’re both paying the basic-rate tax amount. This process allows you to save a possible £252 pa, which can be done [online through HMRC](https://www.gov.uk/marriage-allowance). 7. **Ensure you’ve used all of your ISA allowances** [ISAs](https://www.gov.uk/individual-savings-accounts) are a fantastic way of increasing your income tax-free. Whether it’s stocks and shares you invest in, or cash ISAs, you have a limit of £20,000 for the tax year 2022/23, and £9,000 for a junior ISA. **How your SG Accountant can help you** One of our main goals as your trusted contractor accountant is to ensure your money is working as hard as it can for you, in the most tax efficient way possible. Our expertise in the complex and sometimes demanding issues Limited Company contractors face mean that it’s our job to ensure you receive the right advice and support you need, in order to maximise your take home pay. Get in touch with your SG Accountant to discuss any points raised in this blog. **Categories:** Expenses, Finance, Running your business, Tax **Tags:** Kerry Newman --- ### [Corporation Tax Rate increases in April 2023](https://sg-accounting.co.uk/blog/sgs-tips-on-getting-ready-for-the-corporation-tax-rate-increases-in-april-2023/) **Published:** August 30, 2022 **Author:** Kerry Newman **Content:** Back in the March 2021 Budget it was announced that there would be an increase in Corporation Tax from April 2023, so how much will this ultimately cost you and your business? In this blog we look at what’s to come and how you’ll be affected. **What is Corporation Tax?** In short it is a levy on your company’s profits, which is effectively a charge on the profit left in your company once expenses (including your salary) have been deducted from your company’s turnover. For example if your turnover was £150,000 and your business expenses came to £80,000 you’d pay Corporation Tax on the remaining £70,000. The current rate of Corporation Tax is 19%. **When is Corporation Tax due?** You must make your Corporation Tax payment within nine months and one day from your company’s yearend. You’ll also need to file a [CT600 tax return](https://www.gov.uk/government/publications/corporation-tax-company-tax-return-ct600-2015-version-3) each year, 12 months from your company’s yearend date. If you don’t adhere to the dates given by HMRC you can expect to receive a penalty from HMRC, or even an increase in your Corporation Tax bill. **What changes are being made?** It’s been confirmed that corporation tax will be rising from 19% to 25% from April 2023, with a tapered relief for those with whose company profits fall between £50,000 and £250,000. If your company’s profits are below £50,000 you’ll be subject to the new ‘small profits rate’ of 19%. **Why the increase?** Corporation Tax has been at a historically low rate of 19%, and as a result of the financial support provided to businesses during the Covid-19 pandemic at an eye-watering total of £100 billion, then Chancellor of the Exchequer Rishi Sunak decided that an increase in Corporation Tax was the way to recoup some of that money. The rise in tax is the government’s way of getting UK companies to ‘give back’, and to aid in the UK’s economical recovery. **How will this affect Limited Company contractors?** If your company’s profits remain below £50,000 you’ll remain unaffected, as you won’t have reached the threshold for the increase in Corporation Tax and will continue to pay 19%. But should your company earn profits of £50,001 – £250,000 you’ll be subject to the new tapered relief of tax, with 25% being the highest amount you can expect to pay. **How can SG Accounting help?** Tax can be confusing, and it’s easy to make mistakes, especially when it’s not your area of expertise. That’s why it’s always best to leave it to the experts, to ensure you’re paying the right amount of tax (and not a penny more!) and to stay on the right side of the taxman. Here at SG Accounting we do just that, by providing Limited Company contractors a truly all-inclusive expert accounting service, that’s continually evolving with the market. If this sounds like the type of support and service you deserve from your contractor accountant, [get in touch with our team today](https://sg-accounting.co.uk/contact/). **Categories:** New to contracting, Running your business, Tax **Tags:** Kerry Newman --- ### [BREAKING NEWS - Repeal of IR35 reforms and back track on Corporation Tax](https://sg-accounting.co.uk/blog/breaking-news-repeal-of-ir35-reforms-and-back-track-on-corporation-tax/) **Published:** October 17, 2022 **Author:** Kerry Newman **Content:** Jeremy Hunt, The Chancellor of the Exchequer, has today scrapped the plans to repeal the Off-payroll IR35 Reforms, which had been announced by Kwasi Kwarteng on 22 September 2022. As part of his ‘Growth Plan’, Kwarteng had set out a number of tax cuts designed to support the growth of the British Economy. However, following widespread criticism and instability in financial markets, Mr Kwarteng was replaced with Jeremy Hunt who has scrapped all of the growth plan changes bar the planned cut to stamp duty and National Insurance. Repeal of the IR35/off-payroll working legislation had come as welcome news for our industry, with optimism that the UKs self-employed workforce would flourish. So this u-turn on a u-turn is very disappointing, with the end client being responsible for determining the IR35 status of their contractors. So, business as usual, but not as we would wish for our contractor clients. **Categories:** Budget, Client IR35 Hub, IR35, News, Running your business, Tax **Tags:** Kerry Newman --- ### [The Autumn Statement 2022 Full Report - what it means for Limited Company contractors](https://sg-accounting.co.uk/blog/the-autumn-statement-2022-what-it-means-for-limited-company-contractors/) **Published:** November 17, 2022 **Author:** Kerry Newman **Content:** Since the reversal of Liz Truss’s tax policy changes last month, new PM Rishi Sunak and Chancellor Jeremy Hunt have promised a new statement, concluding that now is the right time to proceed with a package of tax cuts. In today’s statement there was a focus on energy prices & Covid, as being responsible for necessary tax increases. Taken together with maintaining the basic rate of income tax at 20% these changes are estimated to raise £34 billion per year. The headlines are as follows, with the full report below. - Decrease in the additional rate threshold from £150,000 to £125,140 from 6 April 2023. The government is also fixing other personal tax thresholds within income tax, NICs and Inheritance Tax for an additional 2 years, until April 2028 - Reduction in the Dividend Allowance (currently £2,000 tax free but set to reduce to £500 from April 2024) - Reduction in Capital Gains Tax Annual Exempt Amount (reducing to £6,000 from April 2023 and £3,000 from April 2024). The Personal Allowance will generally be available in addition to the reduced Dividend Allowance and Capital Gains Tax Annual Exempt Amount - The income tax additional rate threshold will be lowered from £150,000 to £125,140 from 6 April 2023. The ART for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The ART for savings and dividend income will apply UK-wide. - VAT registration and deregistration thresholds will be maintained at the current levels for an additional 2 years and will not change for a further period of 2 years from 1 April 2024. - Confirmed Off-payroll working rules: maintain 2017 and 2021 reforms (also known as IR35) - Reflecting the success of the transition to electric vehicles, the government will introduce Vehicle Excise Duty (car tax) on electric cars, vans and motorcycles from April 2025 ## **The Autumn Statement – Full Report** On 17 November 2022, the government undertook the third fiscal statement in as many months, against a backdrop of rising inflation and economic recession. The Chancellor laid out three core priorities of stability, growth and public services. The government sought a balanced path to support the economy and return to growth, partially through public spending restraint and partially through tax rises. ## Income tax ### Income tax rates The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This was to be accelerated so that it took effect from April 2023. However, whilst the government aims to proceed with the cut in due course, this will only take place when economic conditions allow and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely. At the Mini Budget on 23 September 2022 the government announced a plan to abolish the 45% additional rate of income tax from April 2023. It was announced on 3 October 2022 that the government would not proceed with this plan. From 6 April 2023, the point at which individuals pay the additional rate will be lowered from £150,000 to £125,140. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. ### Income tax allowances The income tax personal allowance and higher rate threshold were already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028. They will be £12,570 and £50,270 respectively. The government will uprate the married couple’s allowance and blind person’s allowance by inflation for 2023/24. ### Dividends The government has also confirmed that, from April 2023, the rates of taxation on dividend income will remain as follows: - the dividend ordinary rate – 8.75% - the dividend upper rate – 33.75% - the dividend additional rate – 39.35%. As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%. In addition, the government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024. These changes will apply to the whole of the UK. ## National Insurance contributions In September 2021 the government published its proposals for new investment in health and social care in England. The proposals were intended to lead to a permanent increase in spending not only in England but also by the devolved governments. To fund the investment the government introduced a UK-wide 1.25% Health and Social Care Levy based on the National Insurance contributions (NICs) system but ringfenced for health and social care. The Health and Social Care Levy Act provided for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23. From April 2023 onwards, the NIC rates were intended to revert back to 2021/22 levels and be replaced by a new 1.25% Health and Social Care Levy. However, the government has: - reversed the temporary increase in NICs and - cancelled the Health and Social Care Levy completely. | ### Comment | |---| | According to the government, not proceeding with the Levy will reduce tax for 920,000 businesses by nearly £10,000 on average next year. For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24. In addition, it will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year. | ### More detail for employees and employers The changes took effect for payments of earnings made on or after 6 November 2022, so: - primary Class 1 NICs (employees) generally reduced from 13.25% to 12% and 3.25% to 2% and - secondary Class 1 NICs (employers) reduced from 15.05% to 13.8%. The effect on Class 1A (payable by employers on taxable benefits in kind) and Class 1B (payable by employers on PAYE Settlement Agreements) NICs will effectively be averaged over the 2022/23 tax year, so that the rate will generally be 14.53%. | ### Comment | |---| | The government hopes that most employees will receive the NICs reduction directly via the payroll in their November pay but acknowledges that some will have to wait until December or January, depending on the complexity of their employer’s payroll software. | ### More detail for the self-employed Following the principle detailed above, the changes to Class 4 NICs will again be averaged across 2022/23, so that the rates will be 9.73% and 2.73%. ### NICs thresholds A similar principle to that outlined above for income tax thresholds will be followed in respect of the NICs upper earnings limit and upper profits limit. From July 2022, the NICs primary threshold and lower profits limit were increased to align with the personal allowance and will be maintained at this level from April 2023 until April 2028. The Class 2 lower profits threshold will also be fixed from April 2023 until April 2028 to align with the lower profits limit. They will again be £12,570 and £50,270 as appropriate. In addition, the government will fix the lower earnings limit and the small profits threshold at 2022/23 levels in 2023/24, namely £6,396 and £6,725 per annum respectively. The government will uprate the Class 2 and Class 3 NICs rates for 2023/24 to £3.45 per week and £17.45 respectively. Finally, the government will fix the level at which employers start to pay Class 1 NICs for their employees at £9,100 from April 2023 until April 2028. | ### Comment | |---| | The government states: ‘It is fair that businesses play their part in reducing the UK’s debt. The Employment Allowance means that 40% of businesses do not pay NICs and will be unaffected by this change, and the largest employers contribute the most.’ | ## Capital gains The government has announced that the capital gains tax annual exempt amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024. | ### Comment | |---| | Combined with the changes to the Dividend Allowance, these measures will raise over £1.2 billion a year from April 2025. | ## Inheritance tax The inheritance tax nil-rate bands are already set at current levels until April 2026 and will stay fixed at these levels for a further two years until April 2028. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000 and the residence nil-rate band taper will continue to start at £2 million. ## Stamp Duty Land Tax A number of changes were made to the Stamp Duty Land Tax (SDLT) regime earlier this year and these remain. Generally, the changes increase the amount that a purchaser can pay for residential property before they become liable for SDLT. The residential nil rate tax threshold increased from £125,000 to £250,000. The nil rate threshold for First Time Buyers’ Relief increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief increased to £625,000. The changes apply to transactions with effective dates on and after 23 September 2022 in England and Northern Ireland. These changes do not apply to Scotland or Wales which operate their own land transactions taxes. There are no changes in relation to purchases of non-residential property. | **Residential****Band £** | **Rate****%** | **Non-residential****Band £** | **Rate****%** | |---|---|---|---| | 0 – 250,000 | 0 | 0 – 150,000 | 0 | | 250,001 – 925,000 | 5 | 150,001 – 250,000 | 2 | | 925,001 – 1,500,000 | 10 | Over 250,000 | 5 | | Over 1,500,000 | 12 | | | Higher rates may be payable where further residential properties are acquired. | ### Comment | |---| | However, the government has now confirmed that these changes will be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market. | ## Land Transaction Tax The Welsh government also altered its rates in relation to land and buildings in Wales for transactions with an effective date on or after 10 October 2022. | **Residential****Band £** | **Rate****%** | **Non-residential****Band £** | **Rate****%** | |---|---|---|---| | 0 – 225,000 | 0 | 0 – 225,000 | 0 | | 225,001 – 400,000 | 6 | 225,001 – 250,000 | 1 | | 400,001 – 750,000 | 7.5 | 250,001 – 1,000,000 | 5 | | 750,001 – 1,500,000 | 10 | Over 1,000,000 | 6 | | Over 1,500,000 | 12 | | | Higher rates may be payable where further residential properties are acquired. ## Business ### Corporation tax rates It had been previously announced that the expected increase in the rate of corporation tax for many companies from April 2023 to 25% would not go ahead. However the government announced on 14 October 2022 that this increase will now proceed and this has been confirmed. This means that, from April 2023, the rate will increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate. In addition: - bank corporation tax surcharge changes will proceed, meaning that from April 2023 banks will be charged an additional 3% rate on their profits above £100 million and - from April 2023 the rate of diverted profits tax will increase from 25% to 31%. ### Capital allowances The Annual Investment Allowance (AIA) gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur. Up to 31 March 2023, companies investing in qualifying new plant and machinery are able to benefit from capital allowances, generally referred to as ‘super-deductions’. These reliefs are not available for unincorporated businesses. | ### Comment | |---| | Companies incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. | The government will also extend the 100% first year allowance for electric vehicle chargepoints to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes. ### Research and Development For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20% but the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86% and the SME credit rate will decrease from 14.5% to 10%. | ### Comment | |---| | This government states that ‘this reform ensures that taxpayer support is as effective as possible, improves the competitiveness of the RDEC scheme, and is a step towards a simplified, single RDEC-like scheme for all’. The government will consult on the design of a single scheme and consider whether further support is necessary for R&D intensive SMEs. As previously announced at Autumn Budget 2021, the R&D tax reliefs will be reformed by expanding qualifying expenditure to include data and cloud costs, refocusing support towards innovation in the UK, and targeting abuse and improving compliance. | ### Seed Enterprise Investment Scheme From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from two to three years. To support these increases, the annual investor limit will be doubled to £200,000. ### Company Share Option Plan From April 2023, qualifying companies will be able to issue up to £60,000 of Company Share Option Plan (CSOP) options to employees, twice the current £30,000 limit. The ‘worth having’ restriction on share classes within CSOP will be eased, better aligning the scheme rules with the rules in the Enterprise Management Incentive scheme and widening access to CSOP for growth companies. ## VAT The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively. | ### Comment | |---| | According to the government, at £85,000, the UK’s VAT registration threshold is more than twice as high as the EU and OECD averages. | ## Vehicles The government will set the rates for the taxation of company car benefits until April 2028 to provide long term certainty for taxpayers and industry. Rates will continue to incentivise the take up of electric vehicles. In addition, from 6 April 2023 car and van fuel benefits and the van benefit charge will increase in line with inflation. | ### Comment | |---| | In addition, from April 2025 electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty in the same way as petrol and diesel vehicles. According to the government, this will ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate. | ## Welfare, work and pensions ### Cost of living payments The government will provide households on means-tested benefits with an additional £900 cost of living payment in 2023/24. Pensioner households will receive an additional £300 and individuals on disability benefits will receive an additional £150. ### Uprating of benefits The government will increase benefits in line with inflation, including the state pension. The standard minimum income guarantee in pension credit will also increase in line with inflation from April 2023. | ### Comment | |---| | Around 19 million families will see their benefit payments increase from April 2023. | ### Raising the benefit cap The benefit cap will be raised in line with inflation, so that more households will see their payments increase as a result of uprating from April 2023. The cap will be raised from £20,000 to £22,020 for families nationally and from £23,000 to £25,323 in Greater London. For single adults it will be raised from £13,400 to £14,753 nationally and from £15,410 to £16,967 in Greater London. ### National Living Wage and National Minimum Wage uprating The government will increase the National Living Wage (NLW) and National Minimum Wage from 1 April 2023 as follows: - the rate for 23 year olds and over to £10.42 an hour - the rate for 21-22 year olds to £10.18 an hour - the rate for 18-20 year olds to £7.49 an hour - the rate for 16-17 year olds to £5.28 an hour and - the apprentice rate to £5.28 an hour. | ### Comment | |---| | This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over two million low paid workers. | ### In-work conditionality for Universal Credit claimants The government will bring forward the nationwide rollout of the In-Work Progression Offer, starting with a phased rollout from September 2023, to support individuals on Universal Credit (UC) and in work to increase their earnings and move off benefits entirely. This will mean that over 600,000 claimants on UC whose household income is typically between the equivalent of 15 and 35 hours a week at the NLW will be required to meet with a dedicated work coach in a Jobcentre Plus to increase their hours or earnings. ## Energy The Autumn Statement sets out reforms to ensure businesses in the energy sector who are making extraordinary profits contribute more. From 1 January 2023, the Energy Profits Levy will be increased to 35% and extended to the end of March 2028 and a new, temporary 45% Electricity Generator Levy will be applied on the extraordinary returns being made by electricity generators. The Energy Price Guarantee (EPG) will be maintained through the winter, limiting typical energy bills to £2,500 per year. From April 2023 the EPG will rise to £3,000. The government is also setting a national ambition to reduce energy consumption by 15% by 2030, delivered through public and private investment, and a range of cost-free and low-cost steps to reduce energy demand. **Categories:** Autumn Statement, News, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [How to maximise your tax efficiency before tax year end 5 April 2023](https://sg-accounting.co.uk/blog/how-to-maximise-your-tax-efficiency-before-tax-year-end-5-april-2023/) **Published:** February 6, 2023 **Author:** Kerry Newman **Content:** ![Expenses](https://sg-accounting.co.uk/wp-content/uploads/2023/02/expenses-icon1.png "| SG Accounting") ## Allowable expenses - Claim all of your allowable expenses – [you can read our expenses guide here](/guides/expenses-guide/) - Ensure paid invoices have been recorded – chase those you’re still awaiting payment for - Keep receipts 6 years after accounting period ![ISA](https://sg-accounting.co.uk/wp-content/uploads/2023/02/isa-icon1.png "| SG Accounting") ## ISAs - Use your ISA allowance - £20,000 taxed at 0% per year - £9,000 for junior ISAs (JISAs) - If you have a spouse / partner be sure to utilise their £20,000 allowance ![Pension](https://sg-accounting.co.uk/wp-content/uploads/2023/02/pension-icon1.png "| SG Accounting") ## Pension Contributions - Make contributions through your Limited Company for greater tax efficiency - You can pay up to £40,000 taxed at 0% into your pension per year from your Limited Company - Carry forward any unused allowance for the past three years - Utilise your partner / spouse’s allowance ![Dividend](https://sg-accounting.co.uk/wp-content/uploads/2023/02/dividend-icon1a.png "| SG Accounting") ## Dividend Allowance - On the basis you take a salary of £9,100 - £3,470 taxed at 0% - £2,000 dividend allowance taxed at 0% - The remaining £35,700 is then taxed at a rate of 8.75% ![Inheritance Tax](https://sg-accounting.co.uk/wp-content/uploads/2023/02/inheritance-tax-icon1.png "| SG Accounting") ## Inheritance Tax - Use your allowance of £3,000 per year NOT per person - You can give gifts or money up to £3,000 to one person or split the £3,000 between multiple people - Carry forward any unused annual exemption into the next tax year for one year only ![Save Money](https://sg-accounting.co.uk/wp-content/uploads/2023/02/save-money-icon-1.png "| SG Accounting") ## Other cost saving measures - Avoid paying NICs by paying yourself a low salary, then ‘topping up’ with dividends - Reduce your company’s liability to Income Tax (including on Dividends) by diverting your company’s pre-tax profits into a company pension. - Any contributions must be made before your company’s financial year end to qualify for deduction. [Get in touch to discuss further](/contact/) **Categories:** News **Tags:** Kerry Newman --- ### [The Spring Budget 2023](https://sg-accounting.co.uk/blog/the-spring-budget-2023/) **Published:** March 16, 2023 **Author:** Kerry Newman **Content:** Chancellor Jeremy Hunt delivered a ‘Budget for Growth’ after the Office for Budget Responsibility forecast a stronger than expected performance from the UK economy this year with inflation continuing to fall. ### Driving business investment The Chancellor announced a £27 billion transformation of capital allowances from April this year, which will include the Full Expensing of investment in qualifying plant and machinery. There was also a £500 million package for research and development intensive businesses. In addition, Mr Hunt announced 12 Investment Zones across the UK with funding for skills and support. #### Removing barriers to work Reforms to childcare, which will see expanded free care and subsidies, were key to Mr Hunt’s plans to remove the barriers to work for parents, the disabled and the over-50s. The Chancellor also made changes to the pension system to incentivise doctors and other highly-skilled workers to remain in the labour market. As high energy costs continue, the Chancellor extended the Energy Support Guarantee at £2,500 for another three months while fuel duty was frozen once more. Please contact us before taking any action as a result of the contents of this summary. ## Personal Tax ### The personal allowance The income tax personal allowance was already fixed at the current level until April 2026 and will now be maintained for an additional two years until April 2028 at £12,570. The government will uprate the married couple’s allowance and blind person’s allowance by inflation for 2023/24. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. So there is no personal allowance where adjusted net income exceeds £125,140. ### The marriage allowance The marriage allowance permits certain couples, where neither party pays tax in the tax year at a rate other than the basic rate (or intermediate rate in Scotland), to transfer £1,260 of their personal allowance to their spouse or civil partner. | #### Comment | |---| | The marriage allowance reduces the recipient’s tax bill by up to approximately £250 a year. To benefit from the marriage allowance one spouse or civil partner must normally have no income or income below the personal allowance for the year. Since the marriage allowance was first introduced there are couples who are entitled to claim but have not yet done so. It is possible to claim for all years back to 2018/19 where the entitlement conditions are met. The total tax saving for all years up until 2022/23 could be over £1,000. A claim for 2018/19 will need to be made by 5 April 2023. | ### Tax bands and rates The basic rate of tax is 20%. In 2023/24 the band of income taxable at this rate is £37,700 so that the threshold at which the 40% band applies is £50,270 for those who are entitled to the full personal allowance. Once again, the basic rate band is frozen at £37,700 up until April 2028. The National Insurance contributions upper earnings limit and upper profits limit will remain aligned to the higher rate threshold at £50,270 for these years. From 6 April 2023, the point at which individuals pay the additional rate will be lowered from £150,000 to £125,140. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. #### Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish income tax rates and bands apply to income such as employment income, self-employed trade profits and property income. In 2023/24 there are five income tax rates which range between 19% and 47%. Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. The two higher rates are 42% and 47% rather than the 40% and 45% rates that apply to such income for other UK residents. For 2023/24, the 42% band applies to income over £43,662 for those who are entitled to the full personal allowance. The 47% rate applies to income over £125,140. #### Welsh residents Since April 2019, the Welsh Government has had the right to vary the rates of income tax payable by Welsh taxpayers (other than tax on savings and dividend income). The UK government has reduced each of the three rates of income tax paid by Welsh taxpayers by 10 pence. For 2023/24 the Welsh Government has set the Welsh rate of income tax at 10 pence which has been added to the reduced rates. This means the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. ### Tax on savings income Savings income is income such as bank and building society interest. The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of income tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers. Savings income within the allowance still counts towards an individual’s basic or higher rate band and so may affect the rate of tax paid on savings above the Savings Allowance. Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000. ### Tax on dividends Currently, the first £2,000 of dividends is chargeable to tax at 0% (the Dividend Allowance). This will be reduced to £1,000 for 2023/24 and £500 for 2024/25. These changes will apply to the whole of the UK. Dividends received above the allowance are taxed at the following rates for 2023/24: - 8.75% for basic rate taxpayers - 33.75% for higher rate taxpayers - 39.35% for additional rate taxpayers. As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%. Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the Dividend Allowance. To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed. | #### Comment | |---| | Dividends on shares held in ISAs and pension schemes are not subject to dividend tax and thus will not be affected by the increase in rates. | ### Homes for Ukraine scheme In March 2022 the government announced the Homes for Ukraine scheme, a humanitarian sponsorship visa scheme allowing individuals, charities, community groups and businesses in the UK to sponsor Ukrainians arriving in the UK. As part of this scheme the government announced that sponsors would receive ‘thank you’ payments for housing an individual or family. Income tax and corporation tax exemptions for ‘thank you’ payments made by local authorities to sponsors under the Homes for Ukraine scheme will be introduced. Also, temporary reliefs from the Annual Tax on Enveloped Dwellings and Stamp Duty Land Tax will be introduced. ### Pension tax limits This measure supports the government’s efforts to encourage inactive individuals to return to work, in particular those aged 50 and above, and it removes incentives to reduce hours or leave the labour market due to pension tax limits. Legislation will be introduced in Spring Finance Bill 2023 and will have effect from 6 April 2023. This will: - Increase the Annual Allowance from £40,000 to £60,000. - Increase the Money Purchase Annual Allowance from £4,000 to £10,000. - Increase the income level for the tapered Annual Allowance from £240,000 to £260,000. - Ensure that nobody will face a Lifetime Allowance charge. - Limit the maximum an individual can claim as a Pension Commencement Lump Sum to 25% of the current Lifetime Allowance (£268,275), except where previous protections apply. - Change the taxation of the Lifetime Allowance excess lump sum, serious ill-health lump sum, defined benefits lump sum death benefit and uncrystallised funds lump sum death benefit, where they are currently subject to a 55% tax charge above the Lifetime Allowance, to taxation at an individual’s marginal rate. Legislation will be introduced in a future Finance Bill to remove the Lifetime Allowance from pensions tax legislation. | #### Comment | |---| | The government states that evidence suggests recent increases in inactivity have been driven primarily by those aged 50-64, and self-reported retirement has been the main driver for these individuals to leave the labour market. This measure supports individuals’ ability to build up retirement savings and so improves the financial incentive of work whilst continuing to balance the cost of pensions tax relief. | ### Rendering void assignments of income tax repayments This measure will apply to individuals entitled to income tax repayments from HMRC who wish to use a business, accountancy firm or agent to facilitate their access to a repayment. It will also affect the facilitating businesses, accountancy firms and agents. It will remove a taxpayer’s ability to legally assign to a third party their income tax repayment, or their right to an income tax repayment. The effect of this is that assignments of income tax repayments will have no legal effect and the repayment will remain the property of the taxpayer. This will affect assignments of which notice is received by HMRC on or after 15 March 2023. ## Employment ### National Insurance Contributions (NICs) A similar principle to that outlined above for income tax thresholds will be followed in respect of many of the NICs thresholds, namely that they are frozen at the limits for the preceding year and will remain at those levels until 2028. Full details are laid out at the end of this publication. However, the government will uprate the Class 2 and Class 3 NICs rates for 2023/24 to £3.45 per week and £17.45 respectively.National Living Wage (NLW) and National Minimum Wage (NMW) The government will increase the hourly NLW and NMW from 1 April 2023 as follows: - £10.42 for those 23 years old and over - £10.18 for 21-22 year olds - £7.49 for 18-20 year olds - £5.28 for 16-17 year olds - £5.28 apprentice rate for apprentices under 19, and those 19 and over in their first year of apprenticeship. | #### Comment | |---| | This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over two million workers. | ### Taxable benefits for company cars for 2023/24 The rates of tax for company cars remain frozen until 2024/25. Future car benefit rates have been announced for 2025/26 to 2027/28: - For 2025/26, the rates for emissions under 75gm/km increase by 1%. - For 2026/27, the rates for emissions under 75gm/km increase by a further 1%. - For 2027/28, the rates for emissions under 75gm/km increase by a further 1%. The charge for electric cars will rise from 2% to 5% over that period. For cars with emissions of 75gm/km and above, there will be a 1% rise in 2025/26 only, subject to a maximum of 37%. From 6 April 2023 the figure used as the basis for calculating the benefit for employees who receive free private fuel from their employers for company cars is increased to £27,800. ### Company vans For 2023/24 the benefit increases to £3,960 per van and the van fuel benefit charge where fuel is provided for private use increases to £757. If a van cannot in any circumstances emit CO2 by being driven, the cash equivalent is nil. ### Reform of the Company Share Option Plan (CSOP) This reform makes changes to the CSOP, a tax-advantaged employee share scheme available to all UK companies and their employees as follows: - The employee share options limit will be doubled from £30,000 to £60,000. - The ‘worth having’ condition, which limits which types of shares are eligible for inclusion within a CSOP scheme, will be removed. These changes will have effect for share options granted under CSOP schemes on or after 6 April 2023. Existing options granted before 6 April 2023 will also benefit from these changes. ### Enterprise Management Incentives (EMI): improvements to the process to grant options The measure makes changes to simplify EMI by removing two administrative requirements when companies grant EMI options on or after 6 April 2023. Existing EMI share options granted before 6 April 2023 that have not been excercised will also benefit from the changes. Firstly, it removes the requirement for the company to set out within the option agreement the details of any restrictions on the shares to be acquired under the option. Secondly, it removes the requirement for the company to declare that an employee has signed a working time declaration when they issued an EMI option. It does not remove the working time requirement itself. From 6 April 2024, the government will also extend the deadline for notifying an EMI option from 92 days following the grant to the 6 July following the end of the tax year. This will be legislated separately and the impacts will be set out at that point. ## Business ### Corporation tax rates The expected increase in the rate of corporation tax for many companies from April 2023 to 25% will go ahead. This means that, from April 2023, the rate will increase to 25% for companies with profits over £250,000. The 19% rate will become a small profits rate payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate. In addition: - Bank corporation tax surcharge changes will proceed, meaning that from April 2023 banks will be charged an additional 3% rate on their profits above £100 million. - From April 2023 the rate of diverted profits tax will increase from 25% to 31%. ### Capital allowances The super-deduction regime, which gives a 130% enhanced first year allowance (FYA) to companies on the purchase of qualifying plant and machinery, comes to an end on 31 March 2023. Instead, the government has announced Full Expensing, a 100% FYA, which allows companies to deduct the cost of qualifying plant and machinery from their profits straight away with no expenditure limit. Qualifying expenditure will include most plant and machinery, as long as it is unused and not second-hand, but will not include cars. Full Expensing will be effective for acquisitions on or after 1 April 2023 but before 1 April 2026. A 50% FYA for other plant and machinery including long life assets and integral features (known as special rate assets) will operate along similar lines. Full Expensing and the 50% FYA are only available for companies and not for unincorporated businesses. The Annual Investment Allowance (AIA) is available to both incorporated and unincorporated businesses. It gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit has been £1 million for some time but was scheduled to reduce to £200,000 from April 2023. The government has announced that the temporary £1 million level of the AIA will become permanent and the proposed reduction will not occur. The government will also extend the 100% FYA for electric vehicle charge points to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes. | #### Comment | |---| | The AIA amounts to full expensing for 99% of businesses. The long-term ambition is to make Full Expensing and the 50% FYA permanent. | ### Research and Development (R&D) relief For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20% but the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86% and the SME credit rate will decrease from 14.5% to 10%. A higher rate of SME payable credit of 14.5% will apply to loss-making SMEs which are R&D intensive. To be R&D intensive the ratio of the company’s qualifying R&D expenditure must be 40% or above the company’s ‘total expenditure’ for the period. This equates to a receipt of £27 for every £100 of R&D expenditure. Other announced changes to the R&D regime include expanding qualifying expenditure to include the costs of datasets and of cloud computing. All claims for R&D reliefs will have to be made digitally and be accompanied by a compulsory additional information form. Companies will also need to notify HMRC that they intend to make a claim within six months of the end of the period of account to which the claim relates, generally if they have not made an R&D claim in the previous three years. These changes apply to claims in respect of accounting periods which begin on or after 1 April 2023 apart from the additional information form, which will be required for claims made on or after 1 August 2023. The restriction to relief on overseas expenditure, designed to refocus support towards UK innovation, will now come into effect from 1 April 2024 instead of 1 April 2023. | #### Comment | |---| | The increase in the RDEC rate means the UK now has the joint highest uncapped headline rate of tax relief in the G7 for large companies. The government is currently considering responses to a consultation on merging the RDEC and SME schemes and expects to publish draft legislation for technical consultation in the summer. | ### Making Tax Digital (MTD) for income tax The MTD regime is based on businesses being required to maintain their accounting records in a specified digital format and submit extracts from those records regularly to HMRC. In what appears to be a never-ending story, the government has announced a further delay in MTD for income tax self assessment (ITSA). The mandation of MTD for ITSA will now be introduced from April 2026, with businesses, self-employed individuals and landlords with income over £50,000 mandated to join first, a change from the original £10,000 limit. Those with income over £30,000 will be mandated from April 2027. The government will also review the needs of smaller businesses and look in detail at whether the MTD for ITSA service can be shaped to meet the needs of smaller businesses. Following the new approach, the government will not extend MTD for ITSA to general partnerships in 2025. HMRC has previously announced that MTD for corporation tax will not be mandated before 2026. This now looks even further away. ### Accounting periods that are not aligned to tax years As part of the MTD project, changes have been made to alter the rules under which trading profits made by self-employed individuals and partnerships are allocated to tax years. The changes mainly affect unincorporated businesses that do not draw up annual accounts to 31 March or 5 April. The transition to the new rules will take place in the 2023/24 tax year and the new rules will come into force from 6 April 2024. Affected self-employed individuals and partnerships may retain their existing accounting period but the trade profit or loss that they report to HMRC for a tax year will become the profit or loss arising in the tax year itself, regardless of the chosen accounting date. Broadly, this will require apportionment of accounting profits into the tax years in which they arise. | #### Example | |---| | A business draws up accounts to 30 June every year. Currently, income tax calculations for 2024/25 would be based on the profits in the business’ accounts for the year ended 30 June 2024. The change will mean that the income tax calculations for 2024/25 will be based on 3/12 of the profits for the year ended 30 June 2024 and 9/12 of the profits for the year ended 30 June 2025. | This change will potentially accelerate when business profits are taxed but transitional adjustments in 2023/24 are designed to ease any cashflow impact of the change. | #### Comment | |---| | An estimated 93% of sole traders and 67% of trading partnerships draw up their accounts to 31 March or 5 April and the proposed changes will not affect them. Those with a different year end might wish to consider changing their accounting year end to simplify compliance with the tax rules. | ### Simplification measures for small businesses The government is introducing a number of simplification measures to the tax system for small businesses with the aim of encouraging growth by reducing the administrative burden. The announcements include changes to IT systems to allow tax agents to payroll benefits in kind on behalf of their clients and simplifications to the customs import and export processes. Further consultations were launched which may lead to additional reforms including expanding the use of the cash basis. Proposed changes in the consultation include: - increasing the thresholds so that more unincorporated businesses would be eligible - making it the default for eligible businesses - relaxing the restrictions on interest costs and loss reliefs. ### Investment Zones An Investment Zones programme is being launched to encourage investment in 12 high-potential knowledge-intensive growth clusters across the UK. It is expected that eight sites will be in England and four across Scotland, Wales and Northern Ireland. A five-year tax package will allow businesses located on special tax sites within Investment Zones to benefit from a number of tax reliefs including Stamp Duty Land Tax relief, enhanced capital allowances, structures and buildings allowances and secondary Class 1 NICs relief for eligible employers. ### Freeports The UK and Scottish governments have jointly announced that Inverness & Cromarty Firth and the Firth of Forth are the two locations for Scotland’s Green Freeports. The two winning bids will be supported by up to £52 million in start-up funding and will benefit from tax reliefs and other incentives through a combination of devolved and reserved powers. Following bids in Wales, a Welsh Freeport is also expected to be announced during Spring 2023. Eight Freeports already exist in various locations in England. Freeports are special areas within the UK’s borders where different economic regulations apply. They are part of the government’s work to ‘level up’ and boost economic activity across the UK. The aim is to create innovative hubs, boost global trade, attract inward investment, and increase productivity. ### Seed Enterprise Investment Scheme From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from two to three years. To support these increases, the annual investor limit will be doubled to £200,000. ### Tax treatment of payments to farmers under the lump sum exit scheme As part of the transition to a new agriculture policy in England, the government announced in November 2020 that it planned to: - In 2022, offer farmers who wish to exit the industry the option of taking a lump sum payment in place of any further Direct Payments. - In 2024, ‘delink’ Direct Payments from the land for all farmers. This means that recipients will no longer have to farm the land to receive the payments. Payments received under the Basic Payment Scheme are generally taxable as receipts of a trade. Legislation will be introduced to ensure that payments received under the Lump Sum Exit Scheme which relate to an eligible claim are neither receipts of a trade nor miscellaneous income. This will allow the payments to be treated as the proceeds from the disposal of a chargeable asset, as is currently the case when Basic Payment Scheme entitlements are disposed of. In the case of a company receiving Lump Sum Exit Scheme payments, the payments will be treated as the proceeds from the disposal of an intangible asset. ### Other Other announced changes include: - The reform of film, TV and video games tax relief to give expenditure credits instead of an additional deduction from 1 April 2024. - Extending the temporary higher headline rates of relief for Theatre Tax Relief, Orchestra Tax Relief and Museums and Galleries Exhibitions Tax Relief (MGETR) for two years to 31 March 2025. - Extension of the period for which MGETR will be available for a further two years to 31 March 2026. ## Capital Taxes ### Capital gains tax (CGT) rates No changes to the current rates of CGT have been announced. This means that the rate remains at 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains, mainly chargeable gains on residential properties, with the exception of any element that qualifies for Private Residence Relief. There is still potential to qualify for a 10% rate, regardless of any available income tax basic rate band, up to a lifetime limit for each individual. This is where specific types of disposals qualify for: - Business Asset Disposal Relief (BADR). This is targeted at directors and employees who own at least 5% of the ordinary share capital in the company, provided other minimum criteria are also met. It can also apply to owners of unincorporated businesses. - Investors’ Relief. The main beneficiaries of this relief are investors in unquoted trading companies who have newly-subscribed shares but are not employees. Current lifetime limits are £1 million for BADR and £10 million for Investors’ Relief. ### CGT annual exemption The government has announced that the capital gains tax annual exempt amount will be reduced from £12,300 to £6,000 from 6 April 2023 and to £3,000 from 6 April 2024. ### Chargeable gains: separated spouses and civil partnerships The current legislation applying to the transfer of assets between an individual and their spouse or civil partner provides that such transfers made in any tax year in which they are living together are on a no gain/no loss basis. Where spouses or civil partners separate, no gain/no loss treatment is currently only available in relation to disposals made in the remainder of the tax year in which they cease to live together. After that, transfers are treated as normal disposals for CGT purposes. A number of changes are proposed to the rules that apply to transfers of assets between spouses and civil partners who are in the process of separating and no longer living together. These include the following: - Separating spouses or civil partners will be given up to three years after the year they cease to live together in which to make no gain/no loss transfers. - No gain/no loss treatment will also apply to assets that separating spouses or civil partners transfer between themselves as part of a formal divorce agreement. - A spouse or civil partner who retains an interest in the former matrimonial home will be given an option to claim Private Residence Relief when it is sold. - Individuals who have transferred their interest in the former matrimonial home to their ex-spouse or civil partner and are entitled to receive a percentage of the proceeds when that home is eventually sold will be able to apply the same tax treatment to those proceeds when received that applied when they transferred their original interest in the home to their ex-spouse or civil partner. The changes are expected to apply in relation to a disposal made on or after 6 April 2023. ### Other CGT changes A number of other technical changes to CGT legislation have been announced from April 2023: - Changes to ensure that Roll-Over Relief and Private Residence Relief are available for LLPs and Scottish partnerships when an exchange of interest in land or private residences held by the LLP or partnership occurs. - Changes to prevent UK resident non-domiciled individuals who exchange securities in a UK close company for securities in a similar non-UK company from accessing the remittance basis of taxation on gains realised on the disposal of those non-UK securities. ### Inheritance tax (IHT) nil rate bands The nil rate band has been frozen at £325,000 since 2009 and this will now continue up to 5 April 2028. An additional nil rate band, called the ‘residence nil rate band’ (RNRB) is also frozen at the current £175,000 level until 5 April 2028. A taper reduces the amount of the RNRB by £1 for every £2 that the ‘net’ value of the death estate is more than £2 million. Net value is after deducting permitted liabilities but before exemptions and reliefs. This taper will also be maintained at the current level. ### Estates in administration and trusts Changes are introduced which will affect the trustees of trusts and personal representatives who deal with deceased persons’ estates in administration, and beneficiaries of estates. For 2023/24, technical amendments are made to ensure that, for beneficiaries of estates, their tax credits and savings allowance continue to operate correctly. For 2024/25, changes will: - Provide that trusts and estates with income up to £500 do not pay tax on that income as it arises. - Remove the default basic rate and dividend ordinary rate of tax that applies to the first £1,000 slice of discretionary trust income. - Provide that beneficiaries of UK estates do not pay tax on income distributed to them that was within the £500 limit for the personal representatives. ## Other Matters ### Back to work Major themes in the Budget were getting people to enter work, increase their working hours and extend their working lives. These include numerous proposals detailed below. #### Childcare Working parents in England will be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is nine-months old to when they start school. This will be rolled out in stages: - From April 2024, all working parents of two-year-olds can access 15 hours per week. - From September 2024, all working parents of children aged nine months up to three-years old can access 15 hours per week. - From September 2025 all working parents of children aged nine months up to three-years old can access 30 hours free childcare per week. Where parents need childcare for more than 38 weeks a year, they are able to spread their free hours entitlement over a higher number of weeks. The government will substantially uplift the hourly rate paid to providers that deliver the existing free hours. It will also change the staff-to-child ratios for two-year-olds, moving from 1:4 to 1:5 and provide start-up grants for new childminders, including for those who choose to register with a childminder agency. Childminders who register with Ofsted will receive a start-up grant of £600, whereas those who register with a childminder agency will receive £1,200. In addition, parents on Universal Credit childcare support will receive payment upfront when they are moving into work or increasing their hours, rather than in arrears. Also, the Universal Credit childcare cap will increase to £951 for one child (up from £646) and £1,630 for two children (up from £1,108). #### Universal Credit claimants Changes include: - Increasing the Administrative Earnings Threshold, the minimum amount a person can earn without being asked to meet regularly with their Work Coach, from the equivalent of 15 to 18 hours of earnings at the National Living Wage. | #### Comment | |---| | These changes are expected to require over 100,000 additional claimants to meet more regularly with a Work Coach and take active steps to move into work or increase their earnings. | - Expanding work search requirements. - Strengthening the application of the Universal Credit sanctions regime, including additional training for Jobcentre Work Coaches to ensure they are applying sanctions effectively, including for claimants who do not look for or take up employment. - Extending the Youth Offer until 2028, which will support young people looking for work. #### For disabled people and those with long-term health conditions The government is introducing measures to further help those who are not working due to long-term sickness but want to, with a focus on cardiovascular disease, mental health and musculoskeletal conditions as the leading causes. #### Employing older workers Older workers will be supported to work for longer and to return to work via changes to the pension rules, access to an enhanced digital midlife MOT and an expansion of the Jobcentre Plus midlife MOT offer, which provides in-person financial planning and awareness sessions for Universal Credit claimants aged over 50. ### VAT The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively. | #### Comment | |---| | According to the government, at £85,000, the UK’s VAT registration threshold is more than twice as high as the EU and OECD averages. | ### Changes to VAT penalties and interest The government announced pre-pandemic that it intended to change the way interest and penalties applied for VAT purposes. After a number of delays the new rules were implemented for VAT periods starting on or after 1 January 2023. The default surcharge was replaced by new penalties if a VAT return is submitted late or VAT is paid late. There are also changes to how VAT interest is calculated. The changes are as follows: - VAT returns submitted late – late submission penalties will work on a points-based system. For each VAT return submitted late one penalty point will be imposed. Once a penalty threshold is reached, a £200 penalty will apply, with a further £200 penalty for each subsequent late submission. - Late payment of VAT – the rate of penalty will depend on how late the payment is. However, to give businesses time to get used to the changes, HMRC will not be charging a first late payment penalty for the first year from 1 January 2023 until 31 December 2023, if the VAT is paid in full within 30 days of the payment due date. - How late payment interest will be charged – for VAT periods starting on or after 1 January 2023, HMRC will charge late payment interest from the day the payment is overdue to the day the payment is made in full. - Introduction of repayment interest – the repayment supplement was withdrawn from 1 January 2023. For VAT accounting periods starting on or after 1 January 2023, HMRC will pay repayment interest if they are late in making a refund. ### Annual Tax on Enveloped Dwellings The annual chargeable amounts will be uplifted by inflation for the 2023/24 charging period. **Categories:** Budget, New to contracting, News, Running your business, Salary/dividends, Tax **Tags:** Kerry Newman --- ### [Your first year as an IT Contractor – riding out the early months to success](https://sg-accounting.co.uk/blog/your-first-year-as-an-it-contractor/) **Published:** June 22, 2023 **Author:** Kerry Newman **Content:** ## **Your first year as an IT Contractor – riding out the early months to success** Surviving your first year as an IT contractor can be challenging, but with proper preparation and guidance, you can navigate through it successfully. And with the tech market moving faster than ever, now is the perfect time to become an IT contractor, especially if you have specialist skills in data science, cybersecurity, frontend development, and change management, as your expertise is in high demand. Plus these type of contractors are amongst some of the highest paid, so it’s a lucrative industry to be in that’s only on the way up. In this blog we look at some of the top things to consider during your first year as an IT contractor, to help you glide your way into second year success. ## **Do your research before you start** Before making the leap into IT contracting, gather as much information as possible about the contractor lifestyle. Speak to other contractors, colleagues, friends, or family members who have experience in contracting. You can also join contractor forums or LinkedIn groups to get insights from professionals that are already in the field. It’s really important to understand the pros and cons of contracting and ensure it aligns with your goals and preferences. ## **Update Your CV and connect with recruiters** Tailor your CV to highlight your skills and experience that are relevant to contracting. You can either update it yourself or hire a professional CV writer. Once your CV is ready, send it to recruitment agencies that specialise in IT contracting. LinkedIn, job boards like Indeed, and niche IT job sites can be valuable resources for finding IT contractor recruiters. Building a strong professional network is essential in securing contract opportunities. ## **Enlist the services of an accountant** It’s advisable to research the types of contractor accountants available, early on in your contracting career. They can assist you in setting up a Limited Company, provide guidance on tax obligations, and handle various financial responsibilities. An accountant experienced in working with contractors will be knowledgeable about aspects like annual accounts, Corporation Tax, VAT, Making Tax Digital, and IR35. They can help you optimise your tax efficiency and ensure compliance with relevant regulations. ## **Gaps in between your contracts** From time to time it’s normal for contractors to experience gaps in between their contracts. When this happens you’ll want to have a ‘war chest’ (a reserve of funds) put aside to financially see you through to your next gig. It’s worth considering how much you’ll need in that emergency fund to cover your essential expenses, and to manage your finances prudently to maintain a buffer for unexpected situations. ## **Never stop learning** The IT sector never stops developing, and it’s in your best professional interest to keep up. Ensure you give yourself some time each month to learn and develop your skills in certain areas, to increase your marketability and professional competitiveness within the workforce. One fantastic way to do so is by attending industry events (which are also great for meeting potential new clients and expanding your contracting colleague circle), webinars, workshops, and further learning to demonstrate your expertise. ## **Keep a close circle of contracting colleagues** Throughout your IT contracting journey, you may encounter various questions and challenges. Seek advice from professionals with experience in working with IT contractors. Consult with specialists who can provide guidance on setting up and running a limited company, tax optimisation, VAT registration, and other relevant matters. ## **SG Accounting are with you every step of the way!** It can be daunting taking the first leap into IT contracting, but the expert team of contractor accountants at SG are here to help you on your way. From setting up your Limited Company, to explaining your responsibilities as a director, we’ll be here to ensure you’re ready to hit the ground running with your first IT contract. [Get in touch today to speak to one of our team](https://sg-accounting.co.uk/contact/), we can’t wait to hear from you! **Categories:** New to contracting, Running your business **Tags:** Kerry Newman --- ### [The SG Team's skydive raises an incredible amount for Dorset Mind](https://sg-accounting.co.uk/blog/the-sg-teams-skydive-raises-an-incredible-amount-for-dorset-mind/) **Published:** September 21, 2023 **Author:** Kerry Newman **Content:** Last year The SG Accounting team took on the 3-Peaks Challenge and raised over £2,500 for a great cause. This year we set our sights even higher (15,000ft higher to be exact!), and aimed to raise £3,000 for a charity very close to our hearts, [Dorset Mind](https://dorsetmind.uk/). To achieve this, we doubled the number of people involved and took 12 of our bravest staff members to go skydiving with [GoSkyDive](https://www.goskydive.com/?gad=1&gclid=CjwKCAjwtuOlBhBREiwA7agf1jkjcFCVrcrRrrjEImuYY0aaaiyA5xBz2JUJCUm7fgNqfzCTgqwEsBoCE54QAvD_BwE). The jump was a soaring success, and every team member managed to not only jump (no pushing was required!), but also raise an incredible amount. Here’s what Ethan Speechley-Price, one of the organisers and participants had to say about the event: “It has been amazing for so many of us to be able to tick off such a classic bucket list item by skydiving from 15,000ft, but to do so whilst raising just shy of £4,000 for a charity as amazing as Dorset Mind Mental Health Support has been unbelievable. With so much support from friends, family, colleagues and clients, all I can say is a massive thank you to everyone who got involved and showed support. I know the kind of work this charity does means so much to so many of us at The Affinity Group, so this event will hold an incredibly special place in my heart and has made me even more proud to be part of such an incredible company! It’s anyone’s guess how we are going to be able to top this next year! Suggestions are very welcome.” ![people dressed in blue looking and listening to a sky diving instructor](https://sg-accounting.co.uk/wp-content/uploads/2023/09/skydive-e1695292325656.png "skydive | SG Accounting") We are thrilled to have raised such a large amount of money for Dorset Mind. They are an amazing charity that educates, challenges stigma and inequality, and promotes recovery by empowering individuals to develop resilience. Their support groups and befriending services help people regain social skills. They also deliver educational awareness programmes for schools and workplaces. Thank you again to everyone who donated, and for your kind words of encouragement to the team. They couldn’t have done it without you all! **Categories:** News **Tags:** Kerry Newman --- ### [What's the difference between a Sole Trader and a Limited Company?](https://sg-accounting.co.uk/blog/limited-company-vs-sole-trader-everything-you-need-to-know-about-sole-traders/) **Published:** January 22, 2024 **Author:** Kerry Newman **Content:** If your New Year’s resolution was to take the leap into self-employment, you may be wondering how do you get started, what are your options, and how do you know which route is the right one to take? In this blog we’ll explore the main differences between a Limited Company and a Sole Trader, to help you decide if it’s the right business structure for you. ## **What is a Limited Company?** A limited Company is a type of business structure that’s legally separate from it’s owners (shareholders) and has limited liability. Key features include: - Shareholders – owners of a Limited Company are called shareholders. They own shares in the company and this represents their ownership stake - Directors – The company is managed by its directors, who are appointed by the shareholders and are responsible for the day-to-day running of the business and its legal compliance - It has limited liability – therefore the shareholders are not personally responsible for the company’s debts. Liability is limited to the amount each shareholder has invested in the company, or the nominal value of their shares - Financial reporting – A limited company is required by law to maintain and file proper accounting records annually with Companies House. This includes an income statement, balance sheet, and other relevant documents - Tax – Limited Companies are subject to Corporation Tax on their profits, and shareholders are subject to personal income tax on their salary, dividends, or any other benefits they receive from the company - Tax planning – they’re also able to take advantage of certain tax benefits which are only available to Limited Companies - Statutory requirements – there are a number of statutory requirements limited companies must complete each year, including general meetings, maintaining a registered office, and notifying Companies House of any changes ## **What is the difference between a Limited Company and a Sole Trader?** The difference between a Sole Trader and a Limited Company is that a Sole Trader operates as an individual, and bears personal liability for their business’ debts. Key features include: - As a Sole Trader you’re taxed on your total profits for the tax year, regardless of the amount of income you take from your business. A Limited Company only pays Corporation Tax on their profits, plus personal tax on any money taken from the company (i.e dividends, salary, etc) - When setting up as a Sole Trader the process is much simpler than forming a Limited Company. There’re less formalities and the process is much quicker, which appeals to lots of self-employed small business owners - They’re relatively simple to run as your accounts are basic, with few administrative requirements - Unlike a Limited Company you won’t have shareholders to consult with when making decisions, so you have complete control - When it comes to tax compliance, what’s required of Sole Traders is much simpler than Limited Companies, which ultimately reduces the filing process as it reduces the time spent on tax admin - One of the major risks of being a Sole Trader is that you’re personally liable for business debts, which could put your assets at financial risk - As your business grows you may find you encounter barriers to raising capital, which you’d may not experience if yours was a Limited Company - As your business grows you may experience higher income tax rates, which will have an overall effect on your take home pay Now that the main differences between a Limited Company and a Sole Trader have been identified, we’ll take a closer look at what’s involved in being a Sole Trader, to help you decide if it’s the right route for your business to take. ## **What type of accounts does a Sole Trader need?** You’ll need an income statement and a balance sheet, to give HMRC an insight into your business’ financial health. You’ll be required to inform HMRC that you have began trading, and to also complete the following: - Pay income tax on all profits and National Insurance Contributions (NICs) - [Register for VAT if your turnover exceeds the VAT threshold](https://www.gov.uk/register-for-vat) - Complete your annual self-assessment tax return - Keep records of all contracts, completed works, incoming and outgoings, and all expenses - Keep a record of any bills you’ve had to pay, or services you’ve needed to use for your business - If you work within the construction industry you’ll need to [register with the Construction Industry Scheme (CIS)](https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/how-to-register) ## **Do Sole Traders need a bank account?** The difference between a Sole Trader and a Limited Company is that unlike a Limited Company, Sole Traders aren’t legally required to have a separate business bank account, so you are able to use whatever account you wish. You may however decide to open a separate account to keep your business and personal accounts apart, as this helps separate which finances are used for what, and helps you keep on top of your business’ incomings and outgoings. ## **Do Sole Traders need an accountant?** In this respect, there is no difference between a Sole Trader and a Limited Company, there is no legal requirement to enlist the services of an accountant. You may, however, find it beneficial to have their advice and expertise on your side, to ensure you’re paying the correct amount of tax, and making full use of any tax benefits you may be entitled to. When it comes to completing your self-assessment tax return you may also find it much easier to hand over the responsibility to your accountant, so you can focus on your business, rather than getting bogged down with your finances. Mistakes with the taxman can also become extremely costly, so it’s always advisable to enlist the services of a professional who knows what they’re doing and is able to get things right first time. ## **What records do Sole Traders need to keep?** You’ll need to keep records of the following: - Your personal income - All of your business expenses - All of your sales and income - If you’re VAT registered your VAT records - If you employ anyone you’ll need to include your PAYE records You’ll need these records in order to be able to calculate your profit and loss for your tax return. ## **How SG Accounting can help** Whether you’re just starting out and need advice on which business structure is best for you, are already set up and need ongoing accounting support or you’re currently a Sole Trader and need some help going Limited, our expert team of accountants are here to offer support and help. [Get in touch with the team today](https://sg-accounting.co.uk/contact/), or [take a look at our Sole Trader and Limited Company packages](https://sg-accounting.co.uk/prices/). **Categories:** limited company, Running your business, Sole Trader **Tags:** Kerry Newman --- ### [2024/25 tax year rates and allowances](https://sg-accounting.co.uk/blog/2024-25-tax-changes-rates/) **Published:** March 21, 2024 **Author:** Kerry Newman **Content:** ## National Insurance & Tax - Tax-free personal allowance – £12,570 - Basic rate – 20% – up to £37,700 - Higher rate – 40% – from £37,701 to £125,140 - Additional rate – 45% – above £125,140 ## National Insurance Rates - Primary threshold – £12,570 - Secondary threshold – £9,100 - Employees and directors must pay NI Class 1 contributions at 8% and 2% - Employers pay NI Class 1 contributions at 13.8% ## Dividend Tax Rates - Basic rate – 8.75% - Higher rate – 33.75% - Additional rate – 39.35% ## Tax-efficient dividends for Directors - Dividends basic rate – £37,700 and a salary of £12,570 - Tax-free allowance – £500 - Pay £3,255 Income Tax to HMRC by 31 Jan 2026 ## Corporation Tax - Profits up to £50,000 – 19% - Profits above £50,000 – £250,000 will receive a tapered increase to 25% - Profits above £250,000 – 25% ## Tax-efficient Director’s salary 2024/25 - It’s up to you to decide, because you control the company, but many will choose a salary of £12,570 for 2024/25 - Employment allowance of £5,000 towards NIC if you have more than one employee and are eligible ## Student Loan Repayments - Plan 1 repayment threshold – £22,015 - Plan 2 repayment threshold – £27,295 - Repayment rate – 9% ### Post Graduate - Income is above £21,000 – repayment rate of 6% ## Other points of interest - National Minimum Wage – increasing from £10.42 to £11.44 - Capital Gains Tax annual exemption – reducing to £3,000 - The high income threshold for Child Benefit increases to £60,000 - From April 2024 the eldest / only child will receive £25.60 per week, and additional children will receive £16.95 per week **Categories:** News **Tags:** Kerry Newman --- ### [What are the differences between leasing and hire purchase, and how much tax can you expect to pay on electric cars?](https://sg-accounting.co.uk/blog/electric-car-tax-how-much-can-you-expect-to-pay-and-the-differences-between-leasing-and-hire-purchase/) **Published:** August 19, 2024 **Author:** Kerry Newman **Content:** Are you running your own Limited Company and considering switching to an electric car? Before taking the leap it’s worth understanding the taxable implications that come with an electric car, and how this can be affected by the final decision you make. In this blog we explore the tax due on electric cars when buying outright, leasing and hire purchase. ## **Tax on electric cars** Currently the Benefit in Kind (BiK) for electric company cars is 2% for the 2024/25 tax year, which will increase by 1% every new tax year until 2028, to a total of 5%. If the annual increase may make you think twice about going electric, it’s worth remembering that this small % increase is still a large amount from the maximum 37% BiK that comes with the highest emission petrol or diesel cars. So at present, only 2% of an electric car’s list price is taxable. ## **How much will it cost?** Payment for the car’s tax is split between what the employer pays, and what the employee pays. For example, if a Limited Company purchased an electric car based on a list price of £31,140, the BiK due would be £662.80 (2% of the total list price) as the taxable amount for the current tax year 2024/25. The employee will need to pay an amount based on their income tax bracket from the £622.80. So for example a basic rate tax payer at 20%, you’d need to pay £124.56 per year. If you’re a higher or additional rate taxpayer you’ll need to pay 40% or 45% accordingly. The employer must also pay National Insurance Contributions (NICs) on the car’s total BiK value, which is currently 13.8%. So 13.8% of £622.80 is £85.95, which is your Class 1A employer’s National Insurance, which is payable by the company. Your accountant will be able to advise you on the values you’re due to pay, and any concerns you may have about these values pushing you into different tax rates. Electric cars come with a bonus for the companies too, as they’re able to save on Corporation Tax. ### **Corporation Tax – lease** If the emissions are 50G/KM or less, 100% of the lease costs are allowable for Corporation Tax Relief. You’re also able to reclaim 50% of the VAT back from HMRC. The following example is based on a four-year lease, with a £1,000 deposit and monthly instalments of £299 excluding VAT, after 50% is reclaimed. The following Corporation Tax is what you’d receive: **Year 1** £1,000 deposit plus 11 monthly payments of £299 = £4,289 Allowable Corporation Tax Relief = £4,289 x 100% = £4,289 Therefore, the Corporation Tax Relief received is £4,289 x 19% = £814.91 for the minimum relief and up to £1,072.25 based on 25% for the maximum relief depending on the company’s profit. **Year 2** 12 monthly payments of £299 = £3,588 Allowable Corporation Tax relief = £3,588 x 100% = £3,588 So the Corporation Tax Relief received = £3,588 x 19% = £681.72 for the minimum relief, and up to £897 based on 25% for the maximum relief, depending on the company profits. **Year 3 and 4 –** is the same as year 2. By leasing a car it’ll be in your Limited Company’s name rather than your own, and therefore you’re able to put through any incurred expenses, such as servicing, repairs, and insurance through your company. ### **Corporation Tax – hire purchase** As the car is brand new or unused and it’s CO2 emissions are 0G/KM, you’re able to claim Capital Allowances on the purchase of the vehicle as a ‘First Year Allowance 100% asset’. So for example if the car cost £31,140 new, the following would apply: **Year 1 – 1st year of purchase** £31,140 will be included as an asset for the company and shown on the Limited Company’s balance sheet, then £31,140 x 19% = £5,916.60 of Corporation Tax Relief will be available in the first year of purchase. The relief again could increase up to 27% depending on the company’s total profits in the year. ## **VAT** As per HMRC’s rules when leasing a vehicle, you’re only able to reclaim half of the VAT element, as HMRC will deem that you’re using the vehicle for both personal and business purposes. Be aware that the VAT reclaim will only apply if you’re on the standard VAT scheme, and you’ll be unable to reclaim the VAT if you’re on the Flat Rate VAT scheme. You’re able to put these costs through your Limited Company, so long as the lease and vehicle are in the company’s name. If you’re purchasing the car via a hire purchase car agreement (where there is personal usage) there is no reclaimable VAT as per HMRC’s guidelines. ## **P11d** If you go ahead with the purchase, your company will need to file a P11d, due to be filed by 6th July each year. We will be able to prepare and submit this for your as part of your package here at SG Accounting. ## **How else your SG Accounting Client Director can help** If you’re considering purchasing an electric car but need a little help in understanding exactly how much the various options could cost you, get in touch with your Client Director. They’ll be able to provide you with a tailored illustration of costs, to help you make up your mind. [We’re here to help and only a phone call or email away, so get in touch today](https://sg-accounting.co.uk/contact/) to ask us about electric car tax, or anything else. **Categories:** Expenses, limited company, News, Running your business, Tax **Tags:** Kerry Newman --- ### [What are the changes for the Employer’s National Insurance rate for 2025/26?](https://sg-accounting.co.uk/blog/the-employers-national-insurance-rate-increase/) **Published:** March 3, 2025 **Author:** Kerry Newman **Content:** ## Overview of Employer’s National Insurance Contributions Back in October 2024, the UK government released the much-anticipated Autumn Budget where they announced a variety of changes affecting UK employers. One of the significant talking points from this was the adjustments to Employer’s National Insurance Contributions. The changes have a huge impact on employers and their cashflow projections for the coming tax year. This blog will cover the key things to be aware of for the fast-approaching 2025/26 tax year. ## Details of the Rate Increase The major change was the drop in the Secondary Threshold (the amount of earnings before ERs NICs are calculated). For the past 3 tax years, the threshold had remained at £9,100 for the year (or £758 per month), but from April 2025, this has been reduced to £5,000 per annum (£417 pcm) – a reduction value of 45%. This reduction will see employers start to make NI contributions for their employees at a much lower amount of earnings. ## Implications for Employers In addition to this, the government have also increased the rate of contribution for Employers NICs from 13.8% to 15% – the first rate increase since the 2011/12 tax year (ignoring the temporary/retracted increase in 2022/23 for the Health and Social Care Levy). With the changes to the Secondary Threshold and the percentage rate of contributions alone, employers are going to be paying an additional £51.15 per month per employee just on the difference between the 2024/25 and 2025/26 rates and thresholds (for employees paid above the ST). For context, the average UK salary is projected to be around £37,000 in 2025; in 2024-25 this would equate to circa £3,850 in Employers NICs. Taking this salary into 2025/26, the ER NICs are going to cost circa £4,800; a difference of roughly £950 over the tax year. Directors of limited companies will often draw a salary of £12,570 to maximise their Personal Allowance and ensure their tax efficiency. In 2024/25, this equates to £478.86 in Employers NIC liabilities; in 2025/26, this will rise to £1,135.50. ## Strategies for Employers to Manage the Increase Whilst these changes are generally a burden to businesses with employees, the government did set out another change to help mitigate the increases – the Employment Allowance benefit is increasing from £5,000 to £10,500; an increase of 110%. What this means, is that qualifying businesses will not need to pay HMRC the first £10,500 of Employers NIC liabilities. For businesses with a small number of employees or low earners, this may mitigate the increases entirely and they won’t see any changes to year-on-year cash flow in relation to NI. Find out more about Employment Allowance and whether your business qualifies [here](https://www.gov.uk/claim-employment-allowance). ## Conclusion As always, we are more than happy to help our clients navigate these changes and establish what it means for them, so [please reach out to us for further guidance](https://sg-accounting.co.uk/contact/). **Categories:** limited company, New to contracting, News, Tax **Tags:** Kerry Newman --- ### [What announcements were made in the Spring Statement 2025?](https://sg-accounting.co.uk/blog/spring-statement-2025/) **Published:** March 27, 2025 **Author:** Kerry Newman **Content:** **Chancellor of the Exchequer, Rachel Reeves, held the Spring Statement on Wednesday 26 March 2025. In the run up to the event, the Chancellor stated that she ‘remains committed to one major fiscal event a year to give families and businesses stability and certainty on upcoming tax and spending changes and, in turn, to support the government’s growth mission’.** The Chancellor did meet her commitment that there would be no major tax announcements but tax is only one side of the equation. The other is spending and the Spring Statement confirmed a number of the measures recently announced, namely: - cuts to the welfare state - cuts to the civil service - an increase in defence spending. There were also announcements about the rollout of the Making Tax Digital (MTD) for Income Tax project. ## Government spending announcements ## National security Reductions in the Official Development Assistance budget (overseas aid) will support an increase in NATO-qualifying defence spending to 2.5% of GDP by April 2027, with an ambition to increase to 3% in the next Parliament as economic and fiscal conditions allow. The Spring Statement accelerates towards this by providing an additional £2.2 billion of funding for the Ministry of Defence next year. ## Reform As announced by the Secretary of State for Work and Pensions, the government wants to create a more pro-work welfare system for those who can work and to protect those who cannot. These reforms are projected to save £4.8 billion from the welfare budget in 2029/30 and welfare spending will fall as a share of GDP in the medium term. This will include: - The Universal Credit health element will be frozen for existing claimants until 2029/30. For new claims, the Universal Credit health element will be reduced to £50 a week in 2026/27 and then frozen until 2029/30. - The government will increase the Universal Credit standard allowance for new and existing claims above inflation from April 2026, reaching CPI + 5% from April 2029. - The government will increase checks on potential Universal Credit claimants by introducing more ways to verify the amount of savings they hold, as well as their earnings and expenses. The government is also looking for efficiencies from the state, including by bringing NHS England back into the Department of Health and Social Care. The Spring Statement announces a £3.25 billion Transformation Fund to drive efficiencies across government. ## Growth According to the government, growth is their central mission. The government will set out capital spending plans for the Parliament at the Spending Review in June. Ahead of that, the government has announced an additional £2 billion for social and affordable housing for 2026/27, as part of the government’s ambition to build 1.5 million homes in England in this Parliament, supported by reforms in the Planning and Infrastructure Bill. To ensure the construction industry has the capacity to deliver this government’s plan to get Britain building, the government has committed to a £625 million package for skills in construction, expected to provide up to 60,000 more skilled workers this Parliament. ## Personal Tax ## Tax bands and rates The basic rate of tax is 20%. For 2025/26 the band of income taxable at this rate is £37,700 so that the threshold at which the 40% rate applies is £50,270 for those who are entitled to the full personal allowance. The basic rate band is frozen at £37,700 until April 2028. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 for these tax years as well. The government has suggested that, from April 2028, these limits will then be uprated in line with inflation. For 2025/26 the point at which individuals pay the additional rate of 45% is £125,140. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. There are no changes to the taxation of savings and dividend income for 2025/26. ### Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish Income Tax rates and bands apply to income such as employment income, self-employed trade profits and property income. In 2024/25 a new 45% rate was introduced, making six Income Tax rates which range between 19% and 48%. The rates and bands for 2025/26 for taxable income are as follows: | £ | % | |---|---| | 0 – 2,827 | 19 | | 2,828 – 14,921 | 20 | | 14,922 – 31,092 | 21 | | 31,093 – 62,430 | 42 | | 62,431 – 125,140 | 45 | | Over 125,140 | 48 | Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. ### Welsh residents Since April 2019 the Welsh Government has had the right to vary the rates of Income Tax payable by Welsh taxpayers (other than tax on savings and dividend income). For 2025/26 the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. ### The personal allowance The Income Tax personal allowance is fixed at the current level of £12,570 until April 2028. The government has suggested that, from April 2028, it will then be uprated in line with inflation. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140. The government will uprate the married couple’s allowance and blind person’s allowance for 2025/26. ## Pension tax limits For 2025/26: - The Annual Allowance (AA) is £60,000. - Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000. - The Lump Sum Allowance, which relates to the general maximum that may be able to be taken as a tax-free lump sum, is £268,275. - The Lump Sum and Death Benefit Allowance, which relates to the general maximum that may be able to be taken as a tax-free lump sum in certain circumstances, is £1,073,100. ## Non-UK domiciled individuals Significant changes are made to the tax regime relating to non-UK domiciled individuals. Broadly, from 6 April 2025, changes will be made to replace the remittance basis of taxation, which is based on domicile status, with a new tax regime based on residence. The new regime will provide 100% relief on foreign income and gains for new arrivals to the UK in their first four years of tax residence, provided they have not been UK tax resident in any of the ten consecutive years prior to their arrival. The protection from tax on foreign income and gains arising within settlor-interested trust structures will no longer be available for non-domiciled and deemed domiciled individuals who do not qualify for the four-year foreign income and gains regime. Transitionally, for Capital Gains Tax purposes, current and past remittance basis users will be able to rebase foreign assets they held on 5 April 2017 to their value at that date when they dispose of them. Any foreign income and gains that arose on or before 5 April 2025, while an individual was taxed under the remittance basis, will continue to be taxed when remitted to the UK under the current rules. This includes remittances by those who are eligible for the new four-year foreign income and gains regime. A Temporary Repatriation Facility (the Facility) will be available for individuals who have previously claimed the remittance basis. They will be able to designate and remit, at a reduced rate, foreign income and gains that arose prior to the changes. The Facility will be available for a limited period of three tax years, beginning in 2025/26. The Facility rate will be 12% for the first two years and 15% in the final tax year of operation. The current domicile-based system of Inheritance Tax will be replaced with a new residence-based system, which will affect the scope of non-UK property brought into UK Inheritance Tax for individuals and trusts. Overseas Workday Relief will be extended to four years to align with the new four-year foreign income and gains regime and will be subject to a financial limit on the amount of relief that can be claimed, namely the lower of £300,000 or 30% of an individual’s total employment income. | ### Comment | |---| | This is a significant change in the taxation system. Even if individuals have not considered or used the remittance basis in the past, it may well be that some are still affected. Making the regime residence based may mean that long term resident, non-domiciled individuals will now find that Inheritance Tax is due on their worldwide, rather than UK, assets. | ## National Insurance contributions ### Employees and employers The government announced that it will increase the employer rate from 13.8% to 15% from 6 April 2025. The main rate of Class 1 employee National Insurance contributions (NICs) is 8%. The Secondary Threshold is the point at which employers become liable to pay NICs on an individual employee’s earnings and is currently set at £9,100 a year. The government will reduce the Secondary Threshold to £5,000 a year from 6 April 2025 until 6 April 2028 and then increase it by Consumer Price Index (CPI) thereafter. The Employment Allowance currently allows businesses with employer NICs bills of £100,000 or less in the previous tax year to deduct £5,000 from their employer NICs bill. From 6 April 2025 the government will increase the Employment Allowance from £5,000 to £10,500 and remove the £100,000 threshold for eligibility, expanding this to all eligible employers with employer NIC bills. | ### Comment | |---| | For some businesses, this will create a large additional NICs cost from April 2025. It remains to be seen what the implications are for both the economy and the job market. | ### The self-employed and NICs From 6 April 2025 the rates of Class 4 self-employed NICs are 6% and 2%. For Class 2 NICs from 6 April 2025: - Self-employed people with profits of £6,845 and above get access to contributory benefits, including the State Pension, through a National Insurance credit, without paying Class 2 NICs. - Those with profits under £6,845 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension will continue to be able to do so. For those paying voluntarily, the government will also increase Class 2 and Class 3 NICs to £3.50 and £17.75 respectively for 2025/26. ## Employment ## National Living Wage and National Minimum Wage The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2025. The rates which will apply are as follows: | | NLW | 18-20 | 16-17 | Apprentices | |---|---|---|---|---| | From 1 April 2025 | £12.21 | £10.00 | £7.55 | £7.55 | The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over. | ### Comment | |---| | Over time, the government intends to create a single adult wage rate… from April 2025, the National Minimum Wage for 18-20 year olds will be £10.00 per hour, an increase of 16.3%, the largest ever increase in both cash and percentage terms. This means a boost to annual earnings of over £2,500 for nearly 200,000 young people across the UK. | ## Taxable benefits for company cars The rates of tax for company cars are amended for 2025/26: - The charge for zero emission cars rises from 2% to 3%. - The charge for other cars increases by 1%. - The maximum benefit of 37% remains. The government has confirmed increases to the benefit in kind rates for company cars for tax years up to and including 2029/30. ### Car fuel benefit charge The car fuel benefit charge is £28,200 from 6 April 2025. ## Company vans The van benefit charge is £4,020 and the van fuel benefit charge is £769 from 6 April 2025. ### Treatment of double cab pick-up vehicles The government will treat double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for certain tax purposes. From 1 April 2025 for Corporation Tax, and 6 April 2025 for Income Tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind and some deductions from business profits. The existing capital allowances treatment will apply to those who purchase DCPUs before April 2025. Transitional benefit in kind arrangements will apply for employers that have purchased, leased, or ordered a DCPU before 6 April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5 April 2029. ## Capital Gains Tax ## Capital Gains Tax rates The Capital Gains Tax rates increased for disposals, other than of residential property and carried interest, made on or after 30 October 2024. The basic rate of 10% increased to 18% and the 20% rate increased to 24%. No changes were made to the rates applying to the disposal of residential properties of 18% and 24%. The rate applying to trustees and personal representatives increased from 20% to 24% from the same date. | ### Comment | |---| | The changes in the main rates of Capital Gains Tax brings them in line with those paid on disposal of residential property. This means that there will be no need going forward to differentiate between the types of property being disposed of. | ## Capital Gains Tax annual exemption The annual exempt amount will remain at £3,000 for 2025/26. ## Business Asset Disposal Relief and Investors’ Relief The rate applying for individuals claiming Business Asset Disposal Relief and Investors’ Relief will increase from 10% to 14% for disposals made on or after 6 April 2025. The rate will increase again to 18% for disposals made on or after 6 April 2026. In addition, the lifetime limit for Investors’ Relief reduced from £10 million to £1 million for qualifying disposals made on or after 30 October 2024. This limit takes into account any prior qualifying gains where the relief was claimed. ## Inheritance Tax ## Inheritance Tax nil rate bands The nil rate band has been frozen at £325,000 since 2009 and this will continue to be frozen up to 5 April 2030. An additional nil rate band, called the ‘residence nil rate band’ is also frozen at the current £175,000 level, as is the residence nil rate band taper starting at £2 million. These are also frozen until 5 April 2030. ## Unused pension funds and death benefits The government will bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax purposes from 6 April 2027. ## Agricultural Property Relief and Business Property Relief From 6 April 2026, agricultural and business property will continue to benefit from the 100% Inheritance Tax relief up to a limit of £1 million. The limit is a combined limit for both agricultural and business property. Property in excess of the limit will benefit from a 50% relief, as will, in all circumstances, quoted shares designated as ‘not listed’ on the markets of recognised stock exchanges, such as AIM. ## Business ## Making Tax Digital (MTD) for Income Tax The rollout of MTD for Income Tax will be expanded to include a wider range of small businesses and will operate as follows: - It will start from April 2026 for sole traders and landlords with qualifying incomes over £50,000. - It will extend to those with qualifying incomes over £30,000 in April 2027. - It will extend again to those with qualifying incomes over £20,000 from April 2028. | ### Comment | |---| | Today’s decision to reduce the threshold to £20,000 will ensure that 900,000 sole traders and landlords, who will now join MTD for Income Tax from April 2028, have the time they need to prepare for the changes. As part of the ongoing rollout, the government will continue to explore how it can best bring the benefits of digitalisation to a greater proportion of the four million sole traders and landlords who have income below the £20,000 threshold. | In addition, the following groups will not be required to use MTD for Income Tax: customers who have a Power of Attorney, non-UK resident foreign entertainers and sportspeople who have no other income sources that count as qualifying income for MTD for Income Tax and customers for whom HMRC cannot provide a digital service. Also, the following groups will not be required to join MTD for Income Tax over the course of this Parliament: ministers of religion, Lloyd’s Underwriters and recipients of the Married Couples’ Allowance and Blind Persons’ Allowance. Finally, the government will increase late payment penalties for VAT taxpayers and Income Tax Self Assessment taxpayers as they join MTD for Income Tax from April 2025. The new rates will be 3% of the tax outstanding where tax is overdue by 15 days, plus 3% where tax is overdue by 30 days, plus 10% per annum where tax is overdue by 31 days or more. ## Corporation Tax rates The government has confirmed that the rates of Corporation Tax will remain unchanged which means that, from April 2025, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective Corporation Tax rate. | ### Comment | |---| | The government has committed to capping the main rate of Corporation Tax at 25% for the duration of the Parliament. This is currently the lowest in the G7. | ## Capital allowances The Full Expensing rules for companies allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is new and unused. Similar rules apply to integral features and long life assets at a rate of 50%. The government will explore extending Full Expensing to assets bought for leasing or hiring, when fiscal conditions allow. The Annual Investment Allowance is available to both incorporated and unincorporated businesses. It gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit remains at £1 million. The 100% First Year Allowances (FYA) for qualifying expenditure on zero-emission cars and the 100% FYA for qualifying expenditure on plant or machinery for electric vehicle charging points have been extended to 31 March 2026 for Corporation Tax purposes and 5 April 2026 for Income Tax purposes. ## Furnished Holiday Lettings The Furnished Holiday Lettings (FHL) tax regime will be abolished from April 2025. The effect of abolishing the rules will be that FHL properties will form part of the person’s UK or overseas property business and be subject to the same rules as non-furnished holiday let property businesses. This will apply to individuals, corporates and trusts who operate or sell FHL accommodation. There are a number of implications from 2025/26 which are detailed below. **Pensions** – individuals will no longer be able to include this income within relevant UK earnings when calculating maximum pension relief. **Dwelling-related loans** – the amount of Income Tax relief landlords can receive on residential property finance costs is restricted to the basic rate of Income Tax of 20%. **Replacement of domestic items** – capital allowances will no longer be available for expenditure on new plant and machinery (subject to transitional rules) but instead businesses may claim relief on the replacement of certain items. **Capital gains** – the rules which allowed FHL to be treated as a trade for various Capital Gains Tax reliefs are withdrawn in relation to disposals made on or after 6 April 2025 (1 April 2025 for Corporation Tax). Roll-over relief on the replacement of business assets will no longer apply to acquisitions which take place on or after those dates. However, there are a number of detailed transitional rules to preserve certain reliefs such as Business Asset Disposal Relief in specific situations. **Losses** – broadly, any unused losses can be carried forward to set against future years’ profits of either the UK or overseas property business as appropriate. ## Other matters ## Consultations There were a number of tax-related consultations announced in the Spring Statement, including: - Clearances for the Research and Development tax reliefs, with the aims of reducing error and fraud, increasing certainty for customers and improving customer experience. - Modernising how HMRC acquires and uses third-party data to make it easier for taxpayers to get tax right first time. - Options to improve the financial penalties that apply when inaccuracies are found in returns and documents submitted to HMRC and where taxpayers do not meet their obligations to notify HMRC of circumstances that affect their tax liability. - Options to enhance HMRC’s powers and sanctions to take swifter and stronger action against tax advisers who facilitate non-compliance. ## The VAT registration threshold From 1 April 2025 the VAT registration threshold remains at £90,000 and the deregistration threshold at £88,000. ## Removal of VAT exemption for school fees Private school fees for education and vocational training will no longer benefit from VAT exemption and are subject to VAT at the standard rate (20%). The change applies to terms beginning on or after 1 January 2025 although certain prepayments made after 29 July 2024 are also included. **Categories:** Spring Statement **Tags:** Kerry Newman --- ### [Do you owe tax on cryptocurrency in the UK?](https://sg-accounting.co.uk/blog/do-you-owe-tax-on-cryptocurrency-in-the-uk/) **Published:** November 23, 2023 **Author:** Matthew Townsend **Content:** If you have, or have previously had any dealings with cryptoassets the chances are there will be a tax liability for you. There’s been some confusion in the past around the tax treatment of crypto, but HMRCs stance is now clear. Read on to find out how tax on crypto works and how we can help you navigate your tax situation. **HMRC’s Evolving Position on Crypto Taxation** Back in 2014, HMRC’s tax guidance for ‘cryptoassets’ suggested that highly speculative transactions might not be taxable, drawing comparisons to gambling. This led to a widespread belief that gains from crypto trading were not subject to taxation. However, as cryptoassets gained in popularity and became more mainstream, HMRC has clarified its stance. Contrary to the initial interpretation, HMRC now explicitly states that the buying and selling of cryptoassets is not comparable to gambling. Consequently, gains are taxable and likely subject to capital gains tax. **Do You Have to Pay Taxes on Crypto?** The short answer is yes. Despite financial institutions not recognising cryptoassets as money or currency, HMRC treats them similarly to shares, which means they will be subject to Capital Gains Tax and/or Income Tax, depending on the type of transaction. **How Much Tax Do You Pay on Crypto in the UK?** The type of tax you’ll pay depends on the specific transactions you make with your crypto. For capital gains exceeding the £6,000 tax-free allowance, you’ll pay 10% or 20% tax. Additional income from crypto, surpassing the personal allowance, incurs tax rates between 20% to 45%, determined by your Income Tax band. Notably, for the 2024-2025 financial year, the tax-free allowance for capital gains has been reduced to £3,000. And remember, you should always report your losses as these can be utilised against future gains. **Can HMRC track crypto?** HMRC has the capability to track cryptoasset transactions effectively. Using information from exchanges like crypto.com, the tax authority can monitor crypto activities and target investors not fulfilling their tax obligations. Through a data-sharing program with UK exchanges, HMRC has access to transaction data dating back to 2014 and ‘Know Your Customer’ information provided during exchange or wallet sign-ups. HMRC have started sending out ‘nudge’ letters to prompt individuals and businesses to report their crypto activity. **How can SG Accounting help?** If you have crypto investments, have used crypto currency or have done in the past, you will need to complete a tax return and declare your assets. Here at SG Accounting, our specialist tax team can advise and complete your crypto tax return for you, so just [get in touch with your Client Director and we can help.](https://sg-accounting.co.uk/contact/) **Categories:** Cryptocurrency, Running your business, Tax **Tags:** Contractors, Cryptocurrency --- ### [What are the benefits of appointing a specialist accountant?](https://sg-accounting.co.uk/blog/the-benefits-of-appointing-a-specialist-accountant/) **Published:** April 23, 2024 **Author:** Jen Winslow **Content:** As a small business owner, your accounting duties can sometimes start to get in the way of what really matters to you – running your business. This is especially true for those who have newly incorporated, as the extra responsibilities that come with a Limited Company can start to stack up. Whilst it’s tempting to try to do everything yourself, sometimes it’s just not feasible. In this blog, we’ll cover the main advantages of appointing a specialist accountant. ## **Support with the initial setup** Even before you start your first contract, an accountant can advise you on the most tax-efficient structure for your company. They can analyse your situation, expected earnings and industry to recommend the best solution for you, whether that be as a Sole Trader, a Partnership or setting up a Limited Company. An accountant oversees the formation process, handling company registration, preparing statutory documents, and ensuring you understand all the legal obligations based on your chosen structure. Understanding how your business will function and your responsibilities will give you a solid foundation. ## **Saving time and boosting growth** Your time is precious, and accounting tasks like bookkeeping and tax work take up substantial amounts of it. Attempting to juggle these responsibilities yourself often leads to working excessive hours, cutting into time better spent on growing your business. Outsourcing accounting work to a professional firm will allow you to reclaim that time and boost your productivity. ## **Maximising tax efficiency whilst ensuring compliance** Your specialist accountant will analyse your situation, business type, and finances to suggest the best ways to maximise your tax efficiency. This includes balancing your salary and dividend payments, making sure you’re aware of any allowances you can use, properly claiming your expenses, and any other strategies that are relevant to your business. Your specialist accountant will ensure that your returns are submitted correctly, and on time, giving you peace of mind that you won’t have missed a deadline or incurred any penalties for errors/late filing. They’ll do all of this whilst remaining fully compliant with all of HMRC’s rules and regulations. ## **Benefit from expert advice** As a business owner trying to go it alone, it can be difficult to keep up with the nuances of VAT compliance, allowable expenses, tax regulations, capital allowances, and many other important financial changes that affect your business. Luckily, specialist accountants are trained experts. They can help you navigate these changes, find what’s relevant to your business, and allow you to stay compliant and improve efficiency. With SG Accounting, you have access to unlimited advice from your dedicated accountant. So whether you’re worried about how new tax changes will affect your bottom line, or if there are any allowances you haven’t claimed, your accountant is here to answer your questions. ## **How SG Accounting can help you** At SG Accounting, our team of specialist accountants are here to help with all of your accounting needs and offer expert advice. [Get in touch with us today to discuss how bringing our accounting expertise on board will benefit your business](https://sg-accounting.co.uk/contact/). **Categories:** limited company, New to contracting, Running your business, Sole Trader --- ### [The Budget 2024](https://sg-accounting.co.uk/blog/the-budget-2024/) **Published:** March 6, 2024 **Author:** Jen Winslow **Content:** Chancellor Jeremy Hunt has just finished delivering his Spring Budget 2024, in which he said the Conservatives have a plan to ‘grow the economy’. He confidently stated that his Budget will “unleash people power and put this country back on the path to lower taxes. Growth up, jobs up, taxes down.” - **Property tax** – The furnished holiday let regime is to be abolished – the main impact here will be the mortgage interest relief gained previously will go, and it will be brought in line with the current rules for ordinary let property (mortgage interest rate is limited to 20%). - **Stamp duty** – The multiple dwelling relief is to be abolished. - **Capital Gains Tax** – The higher rates for property will be reduced to 24% – good news for those higher rate tax payers with gains due to be made from property sales. - **Child benefit** – A consultation on moving to a system based on household income, rather than an individual within a household, with the aim to be introduced by April 2026. In the mean time the child benefit threshold will be increased to £60,000. - **VAT registration threshold** – Is to be increased from £85,000 to £90,000 from April 1st, the first increase in seven years. - **Income tax and NI** – The main rate Employee NIC is to be cut to 8%, and self employed cut to 6% from April 2024. This will save the average employed worker £450 per year on top of the £450 per year announced in the Autumn Statement. **The Budget 2024 – full report** Chancellor Jeremy Hunt delivered his ‘Budget for Long Term Growth’ on Wednesday 6 March 2024. His speech promised ‘more investment, more jobs, better public services and lower taxes’. ### Lowering taxes The Chancellor made further changes to National Insurance contributions (NICs), following the cuts made in the Autumn Statement 2023. The rates for NICs will be cut further for both employees and the self-employed from 6 April 2024. There was also a cut in the higher rate of Capital Gains Tax on residential property disposals and the creation of a new ISA allowance to encourage investment in promising UK businesses. The Chancellor has responded to pressure from business groups by raising the threshold for VAT registration to £90,000 and announcing his intention to extend Full Expensing to leased assets. ### Making it possible The Chancellor made his cuts possible with a series of tax-raising measures. These included a new regime for non-doms, the abolition of the Furnished Holiday Lettings tax regime and Multiple Dwellings Relief, alongside a new duty on vaping and an increase in tobacco duty. ## Personal Tax ### Tax bands and rates The basic rate of tax is 20%. For 2024/25 the band of income taxable at this rate is £37,700 so that the threshold at which the 40% band applies is £50,270 for those who are entitled to the full personal allowance. The basic rate band is frozen at £37,700 until April 2028. The National Insurance contributions upper earnings limit and upper profits limit will remain aligned to the higher rate threshold at £50,270 for these tax years as well. For 2024/25, the point at which individuals pay the additional rate of 45% is £125,140. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. #### Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish income tax rates and bands apply to income such as employment income, self-employed trade profits and property income. In 2024/25 a new 45% rate will be introduced, making six income tax rates which range between 19% and 48%. Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. #### Welsh residents Since April 2019, the Welsh Government has had the right to vary the rates of income tax payable by Welsh taxpayers (other than tax on savings and dividend income). The UK government has reduced each of the three rates of income tax paid by Welsh taxpayers by 10 pence. For 2024/25 the Welsh Government has set the Welsh rate of income tax at 10 pence which has been added to the reduced rates. This means the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. ### The personal allowance The income tax personal allowance is fixed at the current level until April 2028 at £12,570. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140. The government will uprate the married couple’s allowance and blind person’s allowance for 2024/25. ### The marriage allowance The marriage allowance permits certain couples to transfer £1,260 of their personal allowance to their spouse or civil partner. | #### Comment | |---| | The marriage allowance reduces the recipient’s tax bill by up to approximately £250 a year. To benefit from the marriage allowance one spouse or civil partner must normally have no income or income below the personal allowance for the year. Since the marriage allowance was first introduced there are couples who are entitled to claim but have not yet done so. It is possible to claim for all years back to 2019/20 where the entitlement conditions are met. The total tax saving for all years up until 2022/23 could be over £1,000. A claim for 2019/20 will need to be made by 5 April 2024. | ### Tax on savings income Savings income is income such as bank and building society interest. The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of income tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers. Savings income within the allowance still counts towards an individual’s basic or higher rate band and so may affect the rate of tax paid on savings above the Savings Allowance. Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000. ### Tax on dividends Currently, the first £1,000 of dividends is chargeable to tax at 0% (the Dividend Allowance). This will be reduced to £500 for 2024/25. These changes will apply to the whole of the UK. Dividends received above the allowance are taxed at the following rates for 2024/25: - 8.75% for basic rate taxpayers - 33.75% for higher rate taxpayers - 39.35% for additional rate taxpayers. The Corporation Tax due on directors’ overdrawn loan accounts is paid at 33.75% and remains unchanged. Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the Dividend Allowance. To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed. ### Pension tax limits A number of changes were made to the tax regime for pensions for 2023/24: - The Annual Allowance (AA) is £60,000. - Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000. - No Lifetime Allowance (LA) charge. The AA and threshold and adjusted income levels will remain the same for 2024/25. As previously announced the LA of £1,073,100 will be abolished from 2024/25. Changes have been made to clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements. ### Individual Savings Accounts The government is freezing the limits on Individual Savings Accounts (ISAs) (£20,000), Junior Individual Savings Accounts (£9,000), Lifetime Individual Savings Accounts (£4,000 excluding government bonus) and Child Trust Funds (£9,000) for 2024/25. The government announced that it is looking to introduce the UK ISA. This will have a new ISA allowance of £5,000 in addition to the existing ISA allowance, and will provide a new tax-free savings opportunity for people to invest in the UK. ### High Income Child Benefit Charge The High Income Child Benefit Charge (HICBC) is a tax charge that applies to higher earners who receive Child Benefit, or whose partner receives it. The government is increasing the income threshold at which HICBC starts to be charged from £50,000 to £60,000 from April 2024. The rate at which HICBC is charged will be halved from 1% of the Child Benefit payment for every additional £100 above the threshold to 1% for every £200. This means that Child Benefit will not be withdrawn in full until individuals have ‘adjusted net income’ of £80,000 or more. | #### Comment | |---| | The government estimates 485,000 families will gain an average of £1,260 towards the cost of raising their children in 2024/25. 170,000 families will be taken out of paying the tax charge. | In addition, the government plans to administer the HICBC on a household rather than individual basis by April 2026, with a consultation in due course. ### Non-UK domiciled individuals From 6 April 2025, the current remittance basis of taxation for non-UK domiciled individuals will be abolished and replaced with a residence-based regime. Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-tax resident for the last ten years. Anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains. The government will also introduce the following transitional arrangements for existing non-UK domiciled individuals claiming the remittance basis: - an option to rebase the value of capital assets to 5 April 2019 - a temporary 50% exemption for the taxation of foreign income for the first year of the new regime (2025/26) - a two year Temporary Repatriation Facility to bring previously accrued foreign income and gains into the UK at a tax rate of 12%. The government will also reform Overseas Workday Relief for employment duties carried out overseas. Inheritance Tax (IHT) is currently a domicile-based system. The government announced the intention to move to a residence-based system, subject to consultation, but no changes to IHT will take effect before 6 April 2025. ## Employment ### National Insurance contributions The Chancellor has previously announced major changes to the National Insurance contributions (NICs) system. #### Employees and NICs Following the Autumn Statement in 2023 the government cut the main rate of Class 1 employee NICs from 12% to 10% from 6 January 2024. The government has further cut the main rate of Class 1 employee NICs from 10% to 8% from 6 April 2024. | #### Comment | |---| | According to the government, building on changes made at the Autumn Statement the government has cut taxes again for 29 million people with the average worker on £35,400 receiving a cut in 2024/25 of over £900. | #### The self-employed and NICs The self-employed generally have to pay two forms of NICs: Class 2 and Class 4. Firstly, the government will amend Class 2 self-employed NICs from 6 April 2024. This means that, from 6 April 2024: - Self-employed people with profits above £6,725 will continue to get access to contributory benefits, including the State Pension, through a National Insurance credit, without paying NICs. - Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension will continue to be able to do so. | #### Comment | |---| | This will mean that a self-employed person who currently pays Class 2 NICs will save at least £192 per year. | Secondly, the government will cut the main rate of Class 4 self-employed NICs from 9% to 6% from 6 April 2024. | #### Comment | |---| | This will benefit around two million individuals, recognising the contribution of the self-employed to the economy and ensuring that work pays for all. According to the government, combined with the removal of the requirement to pay Class 2 NICs, this will save an average self-employed person on £28,000 £650 a year. | #### Extension of NICs relief for hiring veterans The government is extending the employer NICs relief for businesses hiring qualifying veterans for a further year from April 2024 until April 2025. This means that employers will continue to pay no employer NICs up to annual earnings of £50,270 for the first year of a qualifying veteran’s employment in a civilian role. ### National Living Wage and National Minimum Wage The government has accepted in full the recommendations of the Low Pay Commission and announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2024. In addition, from 1 April 2024 the NLW will be extended to 21 and 22 year olds. The rates which will apply from 1 April 2024 are as follows: | | NLW | 18-20 | 16-17 | Apprentices | |---|---|---|---|---| | From 1 April 2024 | £11.44 | £8.60 | £6.40 | £6.40 | The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over. | #### Comment | |---| | The Department for Business and Trade estimates 2.7 million workers will directly benefit from the 2024 National Living Wage increase. | ### Taxable benefits for company cars The rates of tax for company cars remain frozen for 2024/25. Future car benefit rates have been announced for 2025/26 to 2027/28: - For 2025/26, the rates for emissions under 75gm/km increase by 1%. - For 2026/27, the rates for emissions under 75gm/km increase by a further 1%. - For 2027/28, the rates for emissions under 75gm/km increase by a further 1%. The charge for electric cars will rise from 2% to 5% over that period. For cars with emissions of 75gm/km and above, there will be a 1% rise in 2025/26 only, subject to a maximum of 37%. From 6 April 2024 the figure used as the basis for calculating the benefit for employees who receive free private fuel from their employers for company cars remains £27,800. ### Company vans For 2024/25 the benefit remains £3,960 per van and the van fuel benefit charge where fuel is provided for private use remains £757. If a van cannot in any circumstances emit CO2 by being driven, the cash equivalent is nil. ## Business ### Corporation Tax rates The government has confirmed that the rates of Corporation Tax will remain unchanged, which means that, from April 2024, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective Corporation Tax rate. ### Capital allowances The Full Expensing rules for companies allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is unused and not second-hand. The rules were originally designed to be effective for expenditure incurred on or after 1 April 2023 but before 1 April 2026. Similar rules apply to integral features and long life assets at a rate of 50%. The government announced in the Autumn Statement 2023 that both allowances will be made permanent. The government is to publish draft legislation for consultation to help consider any potential extension to include plant and machinery for leasing. The Annual Investment Allowance (AIA) is available to both incorporated and unincorporated businesses. It gives a 100% write-off on certain types of plant and machinery up to certain financial limits per 12-month period. The limit remains at £1 million. ### Transfer of assets abroad – anti-avoidance legislation The Transfer of Assets Abroad (ToAA) provisions will be amended so that UK resident individuals cannot bypass the legislation, by using a company to transfer assets offshore in order to avoid tax. Transfers of assets by certain companies will be considered a relevant transfer for the purposes of the legislation. The new measure will apply to income arising to persons abroad on or after 6 April 2024. ### Creative Industries The government has announced additional support for UK independent films already eligible for the Audio-Visual Expenditure Credit (AVEC). The AVEC is currently set as a basic credit of 34% of qualifying expenditure. Companies with qualifying UK independent films with a budget of £15 million or less will be able to claim a new UK Independent Film Tax Credit (IFTC) of 53%. Qualifying expenditure will be capped at 80% of the film’s total core expenditure. Qualifying films will need to commence principal photography on or after 1 April 2024 and claims can be made from 1 April 2025. | #### Comment | |---| | The maximum IFTC claim will be £6,360,000. | Separately, from 1 April 2025, companies with qualifying visual effects costs will be able to claim an increased AVEC of 39%, a 5% increase on the basic credit. The 80% cap will also be removed for qualifying visual effects costs. For Theatre Tax Relief, Orchestra Tax Relief and Museums and Galleries Tax Relief, the temporary rates of 40%/45% for non-touring/touring and orchestral productions will be made permanent from 1 April 2025. ### Furnished Holiday Lettings The Furnished Holiday Lettings (FHL) tax regime will be abolished from April 2025. Draft legislation is to be published and will include anti-forestalling measures that will apply from 6 March 2024. The effect of abolishing the rules will be that short-term furnished holiday lets and longer-term residential lets are treated the same for tax purposes and individuals will no longer need to report the two income streams separately. ### Research and Development relief As announced in the Autumn Statement 2023, the existing Research and Development Expenditure Credit (RDEC) and SME schemes will be merged, with expenditure incurred in accounting periods beginning on or after 1 April 2024 being claimed in the merged scheme. The rate under the merged scheme will be set at the current RDEC rate of 20%. The changes also provide additional relief for loss-making Research and Development (R&D) intensive SMEs through a higher rate of payable tax credit from April 2023, as a feature of the existing SME scheme. Those entitled to this higher rate would, from April 2024, continue to claim under rules similar to the current SME scheme rather than under the new RDEC scheme. A number of other changes will apply to the new regime from April 2024, including that R&D claimants will no longer be able to nominate a third-party payee for R&D tax credit payments, subject to limited exceptions. | #### Comment | |---| | Further action may be needed to reduce the unacceptably high levels of non-compliance with the R&D rules and HMRC will be publishing a compliance action plan. | ### Making Tax Digital for income tax The government has announced the outcome of the review into the impact of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) on small businesses and intends to proceed with implementation from April 2026. The government will also ensure taxpayers who join MTD from 6 April 2024 are subject to the government’s new penalty regime for the late filing of tax returns and late payment of tax. ### Business Rates The small business multiplier will be frozen for another year, while the 75% Retail, Hospitality and Leisure relief will be extended for 2024/25. The standard multiplier will be uprated in line with the Consumer Prices Index for September 2023. These changes will take effect from 1 April 2024 in England. ### Freeports and Investment Zones Both regimes allow businesses in specific locations to benefit from a number of reliefs including Stamp Duty Land Tax relief, enhanced capital allowances, structures and buildings allowances and secondary Class 1 NIC relief for eligible employers. As announced in the Autumn Statement 2023, the government will extend the window to claim the tax reliefs available in Freeport special tax sites from five to ten years. The extension to the sunset dates will be enacted by secondary legislation and have been confirmed as: - 30 September 2031 for special tax sites in respect of English Freeports - 30 September 2034 for special tax sites in respect of Scottish Green Freeports and Welsh Freeports. ### Other Other announced changes include: - Making the cash basis of accounting the default position for the self-employed from 2024/25, with an alternative to opt for the accruals basis, together with technical changes to the regime. - A number of changes to strengthen the Construction Industry Scheme from April 2024. ## Capital Taxes ### Capital Gains Tax rates The Capital Gains Tax (CGT) rate remains at 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates apply for certain gains, mainly chargeable gains on residential properties, with the exception of any element that qualifies for Private Residence Relief. These rates are changed from 18% and 28% in 2023/24 to 18% and 24% in 2024/25. There is still potential to qualify for a 10% rate on gains up to £1 million under Business Asset Disposal Relief and £10 million under Investors’ Relief. ### CGT annual exemption The government has announced that the CGT annual exempt amount will be reduced from £6,000 to £3,000 from 6 April 2024. ### Inheritance Tax nil rate bands Despite much speculation before the Budget, Inheritance Tax (IHT) has not been abolished. The nil rate band has been frozen at £325,000 since 2009 and this will now continue up to 5 April 2028. An additional nil rate band, called the ‘residence nil rate band’ is also frozen at the current £175,000 level until 5 April 2028. ### Changes to Agricultural Property Relief and Woodlands Relief To ensure compatibility with EU law, action was taken many years ago to expand the scope of Agricultural Property Relief (APR) and Woodlands Relief to property located in the European Economic Area. Following Brexit, this measure reverses those changes and also removes APR from property in the Channel Islands and Isle of Man. Broadly, the changes take effect from 6 April 2024. ### Environmental land management and ecosystem service markets The government is undertaking significant reform of agricultural policy and spending in England. At Budget 2023, the government published a consultation exploring elements of the tax treatment of environmental land management and ecosystem service markets. Following consideration of the responses, the government has decided: - to extend the existing scope of APR from 6 April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, Devolved Administrations, public bodies, local authorities, or approved responsible bodies and - not to restrict APR to tenancies of at least eight years. ## Other Matters ### The VAT registration threshold After many years of having been frozen, the government will increase the VAT registration threshold from £85,000 to £90,000 and the deregistration threshold from £83,000 to £88,000 from 1 April 2024. The government has stated that these new thresholds will be frozen but has not stated for how long. ### Stamp Duty Land Tax changes A number of changes are made to the Stamp Duty Land Tax (SDLT) regime. These include the following: - The abolition of Multiple Dwellings Relief, broadly from 1 June 2024 but subject to transitional rules, for purchasers of residential property in England and Northern Ireland. - Changes to First-Time Buyer Relief to extend it to individuals buying a new residential lease via a nominee or bare trust for transactions with an effective date (usually the date of completion) on or after 6 March 2024, but subject to transitional rules. - Public bodies in England and Northern Ireland will be removed from the scope of the 15% SDLT higher rate charge where the effective date of transaction (usually the date of completion) is on or after 6 March 2024. ### Simplification measures The government has announced a package of measures that supports its ambition to simplify and modernise the tax system, which includes the following: - To simplify the process for employees claiming tax relief on their expenses, and for HMRC to automatically process claims, the government is designing a new, online service for employees to claim tax relief on all of their expenses in one place. - The government will mandate the reporting and paying of income tax and Class 1A NICs on benefits in kind via payroll software from April 2026. - The government will legislate to introduce a route for people to apply for National Insurance Credits for parents and carers for tax years where they have not claimed Child Benefit, to ensure that people do not miss out on their State Pension entitlement. ### Other changes - The alcohol duty freeze will be extended until February 2025. - The temporary 5p cut in fuel duty rates will be extended until March 2025 and the planned inflation increase for 2024/25 will not take place. - A new duty on vaping products will be introduced from 1 October 2026. The government will also introduce a one-off tobacco duty increase from the same date. **Categories:** Budget, Tax --- ### [How can I carry out a credit check on my customers?](https://sg-accounting.co.uk/blog/how-can-i-carry-out-a-credit-check-on-my-customers/) **Published:** May 27, 2020 **Author:** Kerry Newman **Content:** Many people love the idea of running their own business but are concerned about the stability of self-employment. In theory, it should be simple; you do the work, you invoice your customer and they pay you. But there may be times when you come across a customer who says they aren’t in a position to pay your invoice right now. *Late or missed payments cost the UK economy a staggering £51.5 billion in 2018.* Late payments cause cashflow problems for businesses of all sizes. While larger companies may have the resources to see them through, small businesses don’t. Shockingly, late payments are attributed to the closure of 50,000 small businesses each year. Knowing you are working with customers who are in a position to pay your invoices by running a credit check on them before signing a contract can give you the pace of mind you need. There are several ways of checking the credit profile of your customers. Some of these methods include: ## Credit reports Ordering a copy of a credit report is the most comprehensive way to get a full run-down on their financial position of a potential customer. There is normally a charge to obtain a credit report, which can be ordered online from a credit agency. But the report will provide details of ownership, information on their business accounts including bank accounts and credit cards. You’ll also have access to the customer’s payment history, any outstanding balances they have, plus details on past bankruptcies or court judgements. The credit agency may also include a credit score that weighs up the associated risk attached to the customer. ## References You can request that the customer provides you with a reference as evidence they can meet your payment terms. This reference may come from their bank. While this doesn’t act as definite proof, they will honour your invoices, it will set out the bank’s opinion of them in terms of risk. Another type of reference is a supplier reference. This will be provided by a company that the customer is/has worked with, and it will give you an account of what the customer is like to work with. It’s good practice to obtain several independent supplier references, so you can have a clear picture. ## The Prompt Payment Code This a voluntary code that companies can sign up to, and by doing so they agree to commit to several obligations. One of them is paying 95% of their suppliers in 60 days. You can check the register to see if your customer is signed up it. If so, it could be a sign they have good payment practices. However, as it’s voluntary, there’s no legal requirement for them to stick to the commitments outlined in the code. If you’d like to discuss how our services can support you as a contractor, send us a message through our [website](https://sg-accounting.co.uk/) or speak to one of our Directors on 01962 867550. **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [Your guide to Contractor Mortgages](https://sg-accounting.co.uk/blog/mortgages-for-contractors/) **Published:** June 17, 2020 **Author:** Kerry Newman **Content:** Making the decision to purchase a property, whether that’s your first home, or if you’re planning on moving up the property ladder, is a huge and exciting step. It can be made more complicated when you throw into the mix that you’re a self-employed contractor, and you don’t have what some banks/lenders view as a ‘stable-income’. In the past, this could be a stumbling block, but as contracting has become more established as a career choice, banks and mortgage lenders have started to relax their requirements around lending to contractors. Yet, many contractors still have concerns about applying for a mortgage. This guide aims to dispel the myths that surround applying for a contractor mortgage. So, you’ll feel confident when you next come to apply for a mortgage. This guide will cover: - The types of mortgages that are available - How much you can borrow - What paperwork you’ll need to provide to the lender - Tips to make the application process easier Buying a property is among one of the biggest decisions you’ll make and by far the largest financial commitment. So, it’s important you understand the process and are confident that you’re making the right decision. **Types of mortgages that are available** One of the first steps in applying for a mortgage is deciding what sort of mortgage is right for you. There are several products on the market, the main ones you’ll likely come across are: - **Repayment mortgage –** over the length of the mortgage term you’ll steadily be repaying the amount you borrowed, plus the interest added by the lender. In the end, you will have cleared what you borrowed - **Interest only mortgage –** with this type of mortgage you aren’t actually making repayments towards the amount borrowed. Instead each month, you’re repaying the interest due on the amount you borrowed - **Fixed rate mortgage –** the mortgage lender guarantees the interest rate applied to the amount you’ve borrowed will be fixed for a specific time. This can be anything from one to ten years. At the end of the agreement, the rate will be switched to the lenders default SVR rate - **Standard variable rate (SVR) mortgage –** this is the lenders default interest rate and one which people typically find themselves on after finishing their introductory rate. You can also take out a standard variable rate mortgage, but they tend to very expensive - **Discount mortgage –** over a specified period, you can get a discount on the lenders default SVR. This means that the amount you’ll repay each month may change, depending if the lender changes their SVR - **Tracker mortgage –** the interest rate you pay on the money borrowed is linked to an external rate – this typically tends to be the Bank of England’s base rate, plus a set percentage. The amount you repay each month may change depending if the external rate changes - **Capped mortgage –** this type of mortgage is typically offered as an introductory mortgage. The interest rate applied to the amount borrowed is capped, so your repayments won’t go above a certain amount. The interest rate tends to higher than what is offered with a tracker mortgage - **Cashback mortgage –** when you sign up to a mortgage, the lender pays you a lump sum based on an agreed percentage of the amount borrowed. This can range from one to seven percent. This type of mortgage can be useful if you need cash to put towards purchasing things for the property, but you may find that restrictions are placed around early repayment of the mortgage - **Flexible mortgage –** these types of mortgages usually have terms that allow you to overpay and underpay and even take payment holidays (miss a few months of repayments). This type of mortgage is best suited to people who want to have greater control over how much they repay each month. But this flexibility is counterweighted by higher interest rates - **Offset mortgage –** allows you to offset your savings against the amount of interest that you pay. To do this, you’ll need to open a savings account with your mortgage lender and link it to your mortgage **How much you can borrow** You’ve found your perfect home, and now you’re keen to get the process moving. But, it’s important to understand that this process can’t be rushed. The mortgage lender will first perform an affordability assessment. This involves reviewing your income, expenses and income security. As well as being used to determine how much to lend you, mortgage lenders also use affordability assessments as a way to decide if you’ll be able to honour the mortgage repayments for the whole duration of the mortgage. Lending money is a big risk for lenders, and they want to be as sure as they can that they won’t lose out. Coming to this decision involves ‘stress-testing’ your finances. A stress test assesses how your finances will cope if your circumstances change. For example, you have a child, or if your mortgage repayments increase. To do this, they look at your current lifestyle and spend on things like entertainment, shopping and holidays, and calculate the possible financial impact of these changes. **Calculating salary** Calculating the salary of a self-employed contractor isn’t as straightforward as working out the salary for an employed person. Mortgage lenders are aware of this, so they have several methods they use. One way is to look back at what you’ve earned over the last few years and average it out. As an example: £60,000 (2017 earnings), £62,500 (2018 earnings) and £65,000 (2019 earnings). Average = £62,5000. The mortgage lender may not be keen to use this approach if your income has fluctuated in recent years. The worst-case scenario is that they may use your most recent years’ earnings or the lowest amount as the base to calculate what they’ll lend you. **What happens if I work on a day rate?** If you’re working on a day rate, then the lender may be willing to calculate your annual income using this, but they may state that it has to be a minimum of a 12-month contract. They usually use the following formula to work out your annual income: Day rate x number of days worked each week x 48 weeks (this considers time not worked for holidays etc.) This method may work better for new contractors who don’t have a long history of contracting. However, it’s important to note that the mortgage lender may ask for a copy of your contract as proof, so keep a copy handy so you can send it to them. **I work through a limited company will the lender take the same approach?** It’s common for contractors to work through a limited company as it’s the most tax efficient way to work. If this is how you operate, the mortgage lender may calculate your annual income on what you take as a salary but not dividends. This can become a problem if for tax purposes you decide to take a small salary. However, there are specialist lenders who may be willing to lend you money based on the information they find in your accounts. Before renewing your mortgage or applying for your first mortgage, give your accountant plenty of notice so they can make sure your accounts are up to date and accurate. **Detailing expenses** As part of the affordability assessment, the mortgage lender will need to see details and proof of your monthly expenses. This will involve providing a copy of bank statements and, or credit card statements. Some lenders may require six months’ worth of statements, whilst others may ask for statements dating back longer. They’ll be looking for details on things like; credit card debt, loan repayments, child/spousal maintenance payments, school fees, travel expenses and bills, such as Council Tax and utility bills. **Assessing your income security** Some lenders sadly still take the view it’s risky lending money to self-employed contractors, because of the perceived instability around your income. So, you may find that your application gets referred to an underwriter. This is someone who looks at your income, expenses and credit score amongst other things to assess the level of risk involved with lending you money. We advise contractors who are applying for a mortgage to provide as much information as possible. Your accountant can be a great source of support at this time, as they can provide accurate and up to date information on your income. **Copies of paperwork you’ll need to provide** The process of applying for a mortgage for an employed person versus a self-employed contractor, is pretty similar, apart from that a contractor will have to provide more evidence of their income. The paperwork a mortgage lender may ask for includes: - 2/3 years of certified accounts that have been prepared by a qualified accountant (another reason why it’s important to engage with an accountant!) - Evidence of your earnings via form SA302, or copies of tax reviews from HMRC for the last 2/3 years - Copies of upcoming contracts - Evidence of dividend payments or retained profit held withing the limited company If you’re relatively new to contracting, it’s likely that you won’t have 2/3 years’ worth of accounts and income. While this may make it more challenging to get a mortgage, it’s not impossible. Although you may find that the number of mortgage lenders who are willing to lend to you is reduced. You’ll also have to provide proof of your identity. This involves supplying copies of: - Passport/driving licence - Council tax bill - Utility bills dated from within the last three months - Bank statements going back for the last six months, or longer **Tips to make the application process easier** When a contractor mentions that they are looking to apply for a mortgage, one of the first bits of advice we give is to ‘get yourself in a good position’. This means having your finances in order and all your paperwork up to date as this will make it easier for you to be approved for a mortgage. Look forward to relaxing in a home you own, with these top tips for getting a mortgage: - **Find a mortgage broker or IFA** (Independent Financial Advisor) who has experience in arranging mortgages for the self-employed. Not only will they know which lenders to look at, but it’ll save you time hunting for them yourself - **Be honest with your mortgage broker** about any debt, outstanding loans or CCJ’s you may have as they’ll need to know about these before searching for mortgage lenders - **Have a good credit record** – things like missed credit card repayments, missed bills and CCJ’s all count against you. Surprisingly, if you’ve never taken credit e.g. never had a loan or a credit card, this can also hurt your credit rating - **Keep clear and accurate records** – the lender will ask for proof of your income. Depending on how you work they may ask for copies of your work contracts or 2-3 years copies of filed accounts. Do engage with a certified and experienced contractor accountant and have a copy of these documents to hand so as not to hold up the mortgage application - **Curb your personal expenses** – as part of the mortgage application, the lender will review your outgoings to determine what you can realistically afford to borrow. If you know that in 6-12 months’ you’ll be looking to get a mortgage, review your expenses to see if you can cut back on unnecessary expenses - **Save a large deposit –** You’ll need at least a 10% deposit, but a larger deposit will give you access to better interest rates If you’re an SG Accounting client and would like to engage the services of a qualified mortgage broker or an Independent Financial Advisor (IFA), we’ll be happy to connect you with people who understand the unique needs of contractors. Just give your Personal Accountant a call. If you’re not an SG client but would like the kind of service that takes into account all of your financial needs as well as offering a great contracting accounting service, give us a call 01932 867550, or send us a [message.](https://sg-accounting.co.uk/contact/) **Categories:** Finance --- ### [Economy rebuild measures announced](https://sg-accounting.co.uk/blog/economy-rebuild-measures-announced/) **Published:** July 8, 2020 **Author:** Kerry Newman **Content:** The government today announced what they refer to as their next step in rebuilding the economy. Their focus is very much around preventing unemployment whilst gradually stopping the furlough scheme, boosting the hospitality sector and kick starting the housing market. The measures announced are: ## Furlough bonus £1,000 bonus for keeping furloughed staff until January 2021 – Employers who have furloughed staff up until June 2020 will be given a £1,000 bonus per employee in January 2021 if the staff return to full time work until January 2021 without using the furlough scheme. ## Apprentice incentives The government will pay £2,000 for every apprentice employed and will pay an additional £1,500 if the employee is over 25 years of age. There is a maximum claim of 10 staff. £1,000 will be issued for traineeships. ## Kickstart scheme The government will pay 100% of the wages (national minimum wage) for each employee aged between 16 and 24. This applies for anyone who is currently unemployed and for up to 25 hours per week for a 6 month placement. ## Stamp Duty Holiday Stamp Duty Land Tax has been reduced temporarily to 0% for the first £500,000 (currently £125,000). This will save an average of £4,500 for people moving home, with some saving as much as £15,000. The scheme runs for the next 6 months. ## Eat out to help out scheme A 50% discount on Monday-Wednesday meals during August in restaurants (those that apply for the scheme) up to a maximum of £10. ## 5% VAT on qualifying hospitality VAT currently charged at 20% on hot food, accommodation, and attractions has been temporarily reduced to 5% (starting 15 July 2020 and ending 12 January 2021) Over the coming days and weeks, the government will release more information on these and how some of the measures will be applied in practice. **Categories:** Coronavirus --- ### [Finding the right contractor accountant for you](https://sg-accounting.co.uk/blog/finding-the-right-contractor-accountant-for-you/) **Published:** September 21, 2020 **Author:** Kerry Newman **Content:** As a Limited Company contractor you’re busy, and you don’t want to spend your free time dealing with a poor accountant. Chasing late filings, dealing with confusing communication or paying for a substandard service shouldn’t be something you’re having to put up with. Whether you’re on the hunt for a new accountant or you’re just starting out and don’t really know what services you need, in this blog we list the top bad behaviours poor accountants are guilty of, and why if you recognise any it’s time to look elsewhere. **Communication is key** Being put on hold endlessly, passed around the office, receiving replies from unskilled or inexperienced team members, late replies….the list goes on. All of which you should never put up with, especially when you’re paying for the privilege. **Service** What does your monthly accounting fee *actually* include? Does it cover all the [services you require](https://sg-accounting.co.uk/contact/), will you have to pay extra for things that should be included as standard, or are you paying for services you don’t really need? Having a direct line to your own personal accountant should be at the top of every contractor’s wish list, as having someone who knows your account, your personal and professional circumstances and needs without having to repeat yourself each time you get in touch is a must. Have a think about the services you need, and if you’re not sure – ask! A good accountant will be able to advise you on what they believe you’ll need. **Reputation** How many times have you tried a restaurant or service purely based on a review from your friend or colleague? The same can be said for accountants. Take a look at their [online reviews](https://www.google.com/search?q=sg+accounting+google+reviews&rlz=1C1GCEU_enGB917GB917&oq=sg+accounting+google+reviews&aqs=chrome..69i57.4213j0j7&sourceid=chrome&%7bgoogle:instantExtendedEnabledParameter%7die=UTF-8#lrd=0x48740d8b3a75ace5:0x554a1a37f5e5970c,1,,,) or speak to other contractors to see what the general feeling is regarding an accountant’s services. **Personal service** A contractor’s annual HMRC and Company’s House returns are as standard, and every contractor needs them. But that’s not all that makes up a contractor! You’ll have your own specific requirements which need your accountant’s attention, and a good accountant will be on the ball, ready to offer tailored advice and support. If you’re increasingly feeling like you’re being given a blanket level of service, it’s time to find an accountant that cares. **Specialism** Is your accountant really an expert in looking after the needs of Limited Company contractors? They may claim to be and have a general understanding, but a specialist contractor accountant will be well rehearsed in the needs of a contractor, current legislation, how you’re affected, and what needs to be done throughout the year. With the impending changes to IR35 early next year, it’s never been a more important time for contractors to ensure they’re with an accountant who can advise and support them through this period of change. Both a doctor and a dentist work on a body, but you wouldn’t see a doctor about your teeth! The same can be said for accountants, find one that specialises in your field of expertise. **What SG Accounting can do for you** With over 15 year’s specialist experience in serving the contracting community, our clients enjoy a direct line to their director level accountant along with our all-inclusive service. When you join SG we will meet face-to-face with you, to ensure we fully understand your needs and expectations from your take home pay, both for the short and long term. [Get in touch today](https://sg-accounting.co.uk/contact/) to find out more. **Categories:** New to contracting, Running your business **Tags:** contractor accountant --- ### [Coronavirus business support measures](https://sg-accounting.co.uk/blog/coronavirus-jobs-support-scheme/) **Published:** September 24, 2020 **Author:** Kerry Newman **Content:** Rishi Sunak today announced that the government will cover up to two thirds of workers’ wages if their hours have been reduced due to the coronavirus pandemic. It is hoped that the ‘Jobs Support Scheme’ will help to reduce the millions of job losses expected when the furlough scheme ends on October 31st 2020. Announced as part of a wider Winter Economy Plan in the Commons this afternoon, Sunak also covered other measures including pushing back the deadline for the business loan support schemes and an extension to the VAT cut for the hospitality industry until March 2021. Read on for more details of the measures announced today, and please bookmark this page as we will be updating it as more details become available. **Jobs Support Scheme** The government will cover up to two thirds of workers’ wages if their hours have been reduced due to the coronavirus crisis. The scheme will replace the furlough scheme, and will run for 6 months from November 1st 2020. - Anyone who is employed as of September 23rd 2020 and has had their hours reduced as a result of coronavirus can be put on the scheme - Employers will pay staff for the hours they do work and for the hours they can’t work, the government and the employer will each cover one third of the lost pay - The grant will be capped at £697.92 per month **Which businesses are eligible?** - All small and medium sized businesses, even if they didn’t use the furlough scheme - Larger businesses will only be eligible when their turnover has fallen - Employers can also claim the Jobs Retention Bonus worth £1,000 if they keep staff in work through to January 31st 2021 **Which employees are eligible?** Only those on the PAYE payroll. Self-employed workers have been given more time to pay their tax bill. **How can I apply?** It is likely that employers will put employees onto the scheme in much the same way as they did with furlough, however the details have yet to be released. **When will furlough end?** The furlough scheme has been winding down since July and is due to end completely on October 31st 2020. The Jobs Support Scheme has been designed as a replacement for furlough in the hope of reducing redundancies. **VAT and income tax** - The 15% emergency VAT cut (down to 5%) for the tourism and hospitality industries will be extended to 31st March 2021 - Businesses who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free instalments following 31st March 2021 - Self-assessment tax payers will be able to defer tax payments to January 2022 **Business interruption loans** - Business Bounce Back loans will have their repayment periods extended from 6 to 10 years and in some cases, payments deferred for up to 6 months. - The deadline for the government’s coronavirus loan schemes has been extended to the end of November 2020 - Businesses struggling can choose to make interest only payments for six months and those ‘in real trouble’ can apply to suspend repayments altogether for six months **Self-employed support** - The self-employed grant scheme is being extended on similar terms to the jobs support scheme - Businesses will be eligible for the new help if they previously qualified for the self-employment income support scheme (SEISS) and if they’re actively trading - The grant will cover three months’ worth of profits for the period from November to the end of January - It will cover 20% of average monthly profits up to a total of £1,875 - A further grant will be available to the self-employed to cover February 2021 to the end of April 2021 At SG Accounting, we pride ourselves in supporting and advising our clients whenever they need us, so please do get in touch if you have any questions. If you are not yet a client, [get in touch](https://sg-accounting.co.uk/contact/) today for more information about our fixed fee, all-inclusive contractor accounting packages. **Categories:** Coronavirus, Running your business --- ### [IR35 April 2021 – essential FAQs](https://sg-accounting.co.uk/blog/ir35-faqs/) **Published:** October 21, 2020 **Author:** Kerry Newman **Content:** IR35 changes are just around the corner. Be ready with our essential FAQs. **What is changing?** From April 2021, the rules surrounding IR35 in the Private sector will be brought in line with those currently in the Public sector. Therefore it will be the end-hirer’s final decision as to whether you’re inside or outside of IR35, and they will be financially responsible should they get your status wrong. **What isn’t changing?** The rules used to determine a contractor’s IR35 status, so in theory if you are legitimately contracting outside of IR35 come April 2021, you’ll still be outside post the changes. If your contract is within the Public sector come April 2021, your end-hirer is already responsible for determining your IR35 status, therefore this will not change. If you’re unsure about your current contract, or are considering a new contract between now and April 2021, be sure to speak directly with your SG accountant, who will be able to review your contract and working practice’s IR35 status. **What’s the expected impact on contractors?** Our experience from the changes within the Public sector have shown that some end-hirers have taken a risk averse stance, and placed a blanket ‘inside’ IR35 status across all contractors, so as to remove themselves from the liability for an incorrect status. This may result in a number of contractors having to temporarily work on a PAYE basis, and losing all associated tax benefits of working through a Limited Company. **How will your status be assessed?** Your client or end-hirer must practice ‘reasonable care’ when determining your status. To do this they must use the following: **Control:** What level of control does the end-hirer / client have on your contract and working practices? If the answer is little to none, then your contract and working practices are ‘outside’ of IR35. **Substitution:** Are you able to send a replacement contractor during the contract? If so then this would strongly suggest that you’re working outside of IR35. **Mutuality of Obligation:** Is there an expectation or obligation to complete extra work that’s outside of your contract with the end-hirer / client? If not then this suggests you’re outside of IR35. Whilst some clients are placing blanket assessments on contractors, others are using HMRC’s CEST tool (Check Employment Status for Tax) whereby they answer a number of questions based on a contractor’s engagement and then the tool tells them whether you’re inside or outside. **What’s wrong with CEST?** As the tool was created by HMRC, many argue it’s weighted in their favour. It’s also widely considered to be flawed, with HMRC investigations showing that the tool doesn’t give the correct answer. Whilst this is the case, the tool’s final decision is what client’s will base your status on. HMRC will stand by their CEST tool’s decision, so long as the correct facts have been inputted into CEST. **What happens if you don’t agree with your client’s decision?** If your client has either blanket assessed your contract or arrived at an incorrect IR35 status, you’re able to submit a ‘client-led disagreement’. By doing so you provide your evidence to your client, who then has 45 days to respond to your appeal. If you find yourself in this position, speak to your SG accountant, who will be able to assist you at every stage of the ‘client-led disagreement’. **What can you do if your client refuses to reconsider an incorrect assessment?** You have four options: **Option one:** leave and contract elsewhere. **Option two:** Accept a permanent role, but ensure to negotiate a higher rate to compensate for your losses. **Option three:** Contract through an Umbrella company temporarily whilst your case is being disputed. SG allows you to move freely between SG Accounting and SG Umbrella, whenever your contract requires you to. Simply speak to your accountant to find out more. **Option four:** Contract through your Limited Company. You’ll still pay tax and National Insurance Contributions, but there are some other financial benefits. Your SG accountant will be able to advise these, based on your personal and professional circumstances. **What happens if you were contracting outside IR35, then are found to be inside for the same contract?** You must exercise caution when contracting for the same client, when a previous contract was considered outside, but now is classed as inside. HMRC have stated that they have no intentions to open retrospective enquiries into prior contracts, but recent behaviour may suggest otherwise. It’s advised to speak to your SG personal accountant of your plans, and to challenge HMRC’s decision with their support. **Categories:** Client IR35 Hub --- ### [What are your options when working inside IR35?](https://sg-accounting.co.uk/blog/what-are-your-options-when-working-inside-ir35/) **Published:** October 21, 2020 **Author:** Kerry Newman **Content:** As we inch ever closer to The April 2021 IR35 reform, many of you might be wondering what will happen if you’re found inside IR35 and the impact this will have on your take home pay. Whilst your dedicated SG Accountant is on hand to answer any questions about your personal circumstances, it’s good to have a general overview of the facts and what your options are. In this blog we look at just that. **Option 1: Work through an Umbrella company** If found inside IR35 working through an Umbrella company for the duration of that contract could be your best option. You effectively become an employee of the Umbrella, which will deal with your PAYE, tax and National Insurance Contributions, whilst also deducting their fee from your final pay. What you then receive at the end of each month is your net pay. They also deal with invoicing the end-hirer/client on your behalf, so you’re completely taken out of the equation. So whilst you’re not able to take full advantage of the tax benefits which come with being Limited (which could equate to as much as 20-30% more take home pay than working through an umbrella ), you’re still able to continue to contract, safe in the knowledge that everything has been taken care of for you. And as you’re now classed as an ‘employee’ you’ll also be entitled to sickness and holiday pay, and other benefits such as maternity and paternity pay. **How can SG help?** SG Accounting’s sister company, [SG Umbrella](https://sg-umbrella.co.uk/) is on hand to offer Umbrella services to Limited Company contractors who find themselves in this exact position. There’s no additional charge, so if Umbrella is the best option for your next contract, simply let your SG accountant know and they will switch you over. You’ll keep your accountant and same level of service you enjoyed with SG, but just reap all the benefits of being with SG Umbrella and stay safe from HMRC whilst working inside IR35. Then when you’re ready to switch back, let your accountant know and they’ll pop you back over to SG – it’s that simple! They’ll keep hold of all your account information, so it’s easy for them to jump back into your accounts and get you contracting through your Limited Company once more. This service is available to all SG clients at no extra cost, just get in touch with your SG accountant today for more information. **Option 2: Continue to work through your Limited Company** Being found inside IR35 doesn’t mean you have to stop contracting through your Limited Company – because you absolutely still can! And whilst you’ll be taking home less than you would if you were to be outside of IR35, there’s still some positives to continue on as Limited. If you’re able to work on multiple contracts at the same time, some may still be outside, so it’ll still be worth your while to be Limited. Due to HMRC providing a 5% allowance to help cover the running costs of your Limited Company, you’ll only pay tax on 95% of your income, whereas when using an Umbrella you’ll receive 0% allowance and pay tax on 100% of your income. **How can SG help?** We strongly advise discussing your options with your personal SG accountant, as they’ll be able to advise you on which option is the best for you. Whatever they suggest, you can rest assured knowing they’ve got your best interests and take home pay at heart. **Option 3: Return to permanent employment** Some Contractors considering retiring or heading back into permanent employment, see April 2021 as maybe be the right time to do so. You may also be thinking that the conditions and potential financial risk surrounding contracting might not outweigh the benefits, and that you’re better off and more secure in a permanent role. We anticipate the changes in April 2021 to cause only temporary disruption though, so would suggest thinking carefully before making a big decision in advance of seeing how the contracting landscape looks when the dust settles. **How can SG help?** Whatever your decision, again we strongly advise you talk through your personal circumstances with your SG Accountant. If you do decide to go back to permanent employment they will be able to advise you from either placing your company into a dormant state (advisable if you think you may come back to contracting within 2 years), or closing it down completely. We can advise on how to most cost effectively take your money from the company, and help with wealth planning if you have reserves to invest. **Option 4: Challenge your end-hirer / client’s decision** From April the final decision of a contractor’s IR35 status will lie with the end-hirer/client, therefore you will be taken completely out of the equation. The associated tax risks and financial penalties of getting your status wrong also lies with the end-hirer/client. For this reason many clients many decide to place all contractors within IR35 as to protect themselves from incorrectly deciding your IR35 status. **How can SG help?** If you believe your status has been incorrectly determined, or you’ve been a victim of a blanket IR35 status determination, then you’re able to appeal their decision. Speak directly to your SG accountant who will be able to advise you on what action to take, and whether they believe your contract should be inside or outside. **Your SG accountant is here for you – no matter what** When it comes to IR35 no matter the question, big or small, your SG accountant is on hand to offer support and guidance wherever needed. If you’ve got a contract that needs reviewing, you’re unsure about your working practices, or you just need a bit of hand holding in the lead up to April 2021, simply give your accountant a call and they’ll happily support you with whatever you need. SG are here for you and your IR35 needs, now, come April 2021 and beyond. **Categories:** Client IR35 Hub --- ### [The Autumn Statement 2023](https://sg-accounting.co.uk/blog/the-autumn-statement-2023/) **Published:** November 22, 2023 **Author:** Jen Winslow **Content:** Chancellor Jeremy Hunt has just finished delivering his Autumn Statement 2023, which he’s hailed a ‘huge boost’ for British competitiveness in his statement for growth. A series of measures were announced with the ‘overall impact of £20bn a year within the decade – the biggest ever business boost for business investment in modern times’. The headlines are as follows, with the full report being published November 23rd. - Inflation to fall to 2.8% by the end of 2024 - Benefits and Universal Credit will increase next year by 6.7%, the inflation rate for September. - Hand rolling tobacco duty is up by an additional 10% above the tobacco duty escalator, and alcohol duty is frozen until 1 August 2024 - The full state pension will increase to £221.20 per week from April 2024. This will mean an extra £902 per year per person - £50 million in funding for apprenticeship schemes over the next two years - Additional £500 million in funding for UK AI over the next two years, in the hope to make the UK an ‘AI powerhouse’ - Class 2 National Insurance for the self-employed is to be abolished from April 2024. Saving an average of £192 per self-employed person per year - Small business rates multiplier frozen along with the 75% reducer for retail, leisure and hospitality - Class 4 National Insurance will be reduced by 1%, down to 8% from April 2024 - Full Expensing to be made permanent, meaning that for every £1 that a business invests in IT, machinery and equipment, 25p in Corporation Tax can be claimed back - National Insurance to be cut by 2% to 10% from January. The NI bill will be reduced by roughly £450 per year for a worker earning £35,000 - National Living Wage to increase from £10.42 to £11.44 p/h from April 2024 for workers aged 21 and over. That’s an increase of 9.8%, worth up to £1,800 for a full-time worker **Initial reactions – what does this mean for business owners?** We believe that the full expensing being made permanent is unlikely to impress many small businesses. There wasn’t a lot in the statement that supports small businesses, and small business owners will probably feel quite disappointed by this. Class 2 National Insurance (NI) abolition will be good news for those working on a self-employed basis – although only at £3.45 per week. It does simplify the NI system a bit though. Class 1 National Insurance rate cut from 12 to 10% will benefit those who are employed by Umbrella Companies, as it works out to be roughly a £750 per year saving for someone earning over £50,000 per year. **Full report – Autumn Statement 2023** On 22 November 2023, Jeremy Hunt delivered the ‘Autumn Statement for Growth’. Against an improving economic backdrop, the Chancellor is keen to stimulate economic growth and highlighted 110 measures for businesses. In addition, there were significant statements relating to National Insurance changes and also the reform of work-related state benefits. **Income tax** **Income tax rates** The government has stated that the basic rate will remain at 20%, the higher rate at 40% and the additional rate at 45% for 2024/25. The government reduced the point at which individuals pay the additional rate of 45% from £150,000 to £125,140 for the current tax year and this will continue for 2024/25. **Income tax allowances** The income tax personal allowance and basic rate limit are fixed at their current levels until April 2028. They are £12,570 and £37,700 respectively. For those entitled to a full personal allowance, the point at which they will pay income tax at the higher rate will continue at £50,270. **Dividends** The government has also confirmed that, from 6 April 2024, the rates of taxation on dividend income will remain as follows: • the dividend basic rate – 8.75% • the dividend higher rate – 33.75% • the dividend additional rate – 39.35%. As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend higher rate, this will also remain at 33.75%. The government will reduce the Dividend Allowance from £1,000 to £500 from 6 April 2024. **Comment** It is estimated that the reduction in the Dividend Allowance will affect £4.4 million individuals in 2024/25 with the average loss to those affected being around £155. The Scottish and Welsh governments will make their announcements on the devolved elements of taxation policy in due course. **National Insurance contributions** The Chancellor announced major changes to the National Insurance contributions (NICs) system. **Employees and NICs** The government will cut the main rate of Class 1 employee NICs from 12% to 10% from 6 January 2024 so that employees can benefit as soon as possible. **Comment** According to the government, this will provide a tax cut for 27 million working people with the average worker on £35,400 receiving a cut in 2024/25 of over £450. **The self-employed and NICs** The self-employed generally have to pay two forms of NICs: Class 2 and Class 4. Firstly, the government will abolish Class 2 self-employed NICs from 6 April 2024. This means that, from 6 April 2024: • Self-employed people with profits above £12,570 will no longer be required to pay Class 2 NICs but will continue to receive access to contributory benefits, including the State Pension. • Those with profits between £6,725 and £12,570 will continue to get access to contributory benefits, including the State Pension, through a National Insurance credit without paying NICs. • Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension, will continue to be able to do so. The government will set out the next steps on Class 2 reform next year. **Comment** This will mean that a self-employed person who currently pays Class 2 NICs will save at least £192 per year. Secondly, the government will cut the main rate of Class 4 self-employed NICs from 9% to 8% from 6 April 2024. **Comment** This will benefit around two million individuals, recognising the contribution of the self-employed to the economy and ensuring that work pays for all. **Extension of NICs relief for hiring veterans** The government is extending the employer NICs relief for businesses hiring qualifying veterans for a further year from April 2024 until April 2025. This means that employers will continue to pay no employer NICs up to annual earnings of £50,270 for the first year of a qualifying veteran’s employment in a civilian role. **National Living Wage and National Minimum Wage** The government has accepted in full the recommendations of the Low Pay Commission and announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from April 2024. In addition, from April 2024 the NLW will be extended to 21 and 22 year olds. The rates which will apply from 1 April 2024 are as follows: Age NLW 18-20 16-17 Apprentices From 1 April 2024 £11.44 £8.60 £6.40 £6.40 The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over. **Comment** The Department for Business and Trade estimates 2.7 million workers will directly benefit from the 2024 National Living Wage increase. **Individual Savings Accounts** The government is freezing the limits on Individual Savings Accounts (ISAs) (£20,000), Junior Individual Savings Accounts (£9,000), Lifetime Individual Savings Accounts (£4,000 excluding government bonus) and Child Trust Funds (£9,000) for 2024/25. However, a number of changes will be made to allow multiple subscriptions to ISAs of the same type every year and to allow partial transfers of ISA funds in-year between providers from April 2024. **Pension tax limits** A number of changes were made to the tax regime for pensions for 2023/24 and these include the following, which will remain at their 2023/24 levels for 2024/25: • The Annual Allowance (AA) is £60,000. • Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000. • No Lifetime Allowance (LA) charge. In addition, as previously announced the LA of £1,073,100 will be abolished from 2024/25. Changes will be made to clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements. **Backing British business** To increase business investment, the government has announced a number of measures which could raise around £20 billion per year from businesses in a decade’s time. The changes include: • Full Expensing will be made permanent. • The removal of barriers to critical infrastructure by reforming the UK’s inefficient planning system and speeding up electricity grid connection times. • A package of pension reform and driving private investment from insurers into infrastructure by legislating for key reforms to Solvency II. • Making £4.5 billion available in strategic manufacturing sectors such as auto, aerospace, life sciences and clean energy from 2025 for five years. • New Investment Zones. • From April 2024, firms bidding for government contracts over £5 million will have to demonstrate that they pay their own invoices within an average of 55 days, tightening to 45 days in April 2025 and then 30 days in future years. • Changes to Research and Development. **Business Rates** The small business multiplier will be frozen for another year, while the 75% Retail, Hospitality and Leisure relief will be extended for 2024/25. The standard multiplier will be uprated in line with September’s Consumer Prices Index. These changes will take effect from 1 April 2024 in England. **Freeports and Investment Zones** Both regimes allow businesses in specific locations to benefit from a number of reliefs including Stamp Duty Land Tax relief, enhanced capital allowances, structures and buildings allowances and secondary Class 1 NIC relief for eligible employers. Both regimes were originally to run for five years but the Chancellor has announced that they will both now run for ten years. **Capital allowances** The new Full Expensing rules for companies allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is unused and not second-hand. The rules were originally designed to be effective for expenditure incurred on or after 1 April 2023 but before 1 April 2026. Similar rules apply to integral features and long life assets at a rate of 50%. The government has announced that both allowances will now be made permanent. The Annual Investment Allowance, which gives a 100% write-off on certain types of plant and machinery, remains at £1 million per 12-month period. **Research and Development (R&D)** The existing Research and Development Expenditure Credit (RDEC) and SME schemes will be merged, with expenditure incurred in accounting periods beginning on or after 1 April 2024 being claimed in the merged scheme. The rate under the merged scheme will be set at the current RDEC rate of 20%. The notional tax rate applied to loss-makers in the merged scheme will be lowered from 25% to 19%. A number of other changes will apply to the new regime from April 2024, including that R&D claimants will no longer be able to nominate a third-party payee for R&D tax credit payments, subject to limited exceptions. In addition, no new assignments of R&D tax credits will be possible from 22 November 2023, meaning that, in most circumstances, payments of R&D tax reliefs will be paid directly to the company that claims for the R&D. **Comment** Further action may be needed to reduce the unacceptably high levels of non-compliance with the R&D rules and HMRC will be publishing a compliance action plan. **Corporation tax rates** The government has confirmed that the rates of corporation tax will remain unchanged, which means that, from April 2024, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate. **VAT** The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively. In addition, the government will extend the scope of the current VAT zero rate relief on women’s sanitary products to include reusable period underwear from 1 January 2024. **Other business measures** A number of other measures have been announced: • Making the cash basis of accounting the default position for the self-employed from 2024/25, with an alternative to opt for the accruals basis, together with technical changes to the regime. • A number of changes to strengthen the Construction Industry Scheme from April 2024. Other taxation matters **Capital gains** The capital gains tax annual exempt amount will be reduced from £6,000 to £3,000 from April 2024. **Comment** It is estimated that around 570,000 individuals and trusts could be affected in 2024/25. **Inheritance tax** The inheritance tax nil-rate bands will stay fixed at their current levels until April 2028. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000 and the residence nil-rate band taper will continue to start at £2 million. **Back to work** The government is introducing a Back to Work Plan, which includes investment of over £2.5 billion over the next five years. It will significantly expand available support and transform the way people interact with the benefits system. It has been designed: • To support those who are long-term unemployed to find work. • To ensure that those with long-term sickness and/or disabilities are better equipped to manage their conditions and participate in work, if they are able to do so. As part of the Back to Work Plan, the government will invest over £1.3 billion over the next five years to help tackle long-term unemployment by establishing an end-to-end process that supports and incentivises unemployed Universal Credit claimants to find work. These policies, which include expanding Additional Jobcentre Support and strengthening Restart, build on previously announced changes. The government will also strengthen the Universal Credit sanctions regime to enforce the government’s expectation that those who can work must engage with the support available or lose their benefits. As a result, no claimant should reach their claimant review point at 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with Jobcentre support. **State benefits** From April 2024, the government is increasing working age benefits in line with inflation by 6.7%. The government is also maintaining the Triple Lock and the basic State Pension, new State Pension and the Pension Credit standard minimum guarantee will be uprated by 8.5%. **Making Tax Digital** The government has announced the outcome of the review into the impact of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) on small businesses which includes maintaining the current MTD threshold at £30,000 and design changes to simplify and improve the system. These changes will take effect from April 2026. The government will also ensure taxpayers who join MTD from 6 April 2024 are subject to the government’s new penalty regime for the late filing of tax returns and late payment of tax. **Categories:** Autumn Statement, limited company, New to contracting, News, Running your business, Tax **Tags:** Autumn Statement --- ### [How to maximise your tax efficiency before tax year end 5 April 2024](https://sg-accounting.co.uk/blog/how-to-maximise-your-tax-efficiency-before-tax-year-end-5-april-2024/) **Published:** February 15, 2024 **Author:** Laura Hepworth **Content:** ![Expenses](https://sg-accounting.co.uk/wp-content/uploads/2023/02/expenses-icon1.png "| SG Accounting") ## Allowable expenses - Claim all of your allowable expenses – [you can read our expenses guide here](/guides/expenses-guide/) - Ensure paid invoices have been recorded – chase those you’re still awaiting payment for - Keep receipts 6 years after accounting period ![ISA](https://sg-accounting.co.uk/wp-content/uploads/2023/02/isa-icon1.png "| SG Accounting") ## ISAs - Use your ISA allowance - £20,000 taxed at 0% per year - £9,000 for junior ISAs (JISAs) - If you have a spouse / partner be sure to utilise their £20,000 allowance ![Pension](https://sg-accounting.co.uk/wp-content/uploads/2023/02/pension-icon1.png "| SG Accounting") ## Pension Contributions - Make contributions through your Limited Company for greater tax efficiency - You can pay up to £60,000 taxed at 0% into your pension per year from your Limited Company - Carry forward any unused allowance for the past three years - Utilise your partner / spouse’s allowance ![Dividend](https://sg-accounting.co.uk/wp-content/uploads/2023/02/dividend-icon1a.png "| SG Accounting") ## Dividend Allowance - On the basis you take a salary of £9,100 - £3,470 taxed at 0% - £1,000 dividend allowance taxed at 0% - The remaining £36,700 is then taxed at a rate of 8.75% ![Inheritance Tax](https://sg-accounting.co.uk/wp-content/uploads/2023/02/inheritance-tax-icon1.png "| SG Accounting") ## Inheritance Tax - Use your allowance of £3,000 per year NOT per person - You can give gifts or money up to £3,000 to one person or split the £3,000 between multiple people - Carry forward any unused annual exemption into the next tax year for one year only ![Save Money](https://sg-accounting.co.uk/wp-content/uploads/2023/02/save-money-icon-1.png "| SG Accounting") ## Other cost saving measures - Avoid paying NICs by paying yourself a low salary, then ‘topping up’ with dividends - Reduce your company’s liability to Income Tax (including on Dividends) by diverting your company’s pre-tax profits into a company pension. - Any contributions must be made before your company’s financial year end to qualify for deduction. [Get in touch to discuss further](/contact/) **Categories:** limited company, News, Running your business, Tax --- ### [HMRC’s Crypto tax nudge letters](https://sg-accounting.co.uk/blog/hmrcs-crypto-tax-nudge-letters/) **Published:** February 19, 2024 **Author:** Laura Hepworth **Content:** A few years ago crypto was almost a mythical phenomenon, with investors few and far between, and those who invested may have been looked upon as slightly mad to trust such a new form of investment. Fast forward to 2024 and it’s everywhere, with investors making such attractive profits, it’s hard not to consider what investing in crypto could do for you. So if you have taken the plunge and invested, are you aware of the tax you owe? HMRC have been quick to jump on the fact there’s tax money to be made on such investments, and that this needs to be tracked and managed correctly. In this blog we explore the world of crypto HMRC ‘nudge’ letters, and what you should do if you get one. **First things first – what are ‘nudge letters’?** If HMRC believe you have made undisclosed profits on cryptocurrency and owe them tax, you may be sent a ‘nudge’ letter from them. To date 8,329 of these letters have been sent out from HMRC, and they’ve been very busy collecting data from crypto exchanges for the past three years in order to obtain this intel. If you own crypto you may not even be aware that you owe Capital Gains Tax if you’ve sold any of your digital assets, or if HMRC consider you to be a ‘crypto trader’ then you’ll be subject to paying even more tax in the form of income tax on your holdings. If you mine cryptocurrency, generate interest from ‘staking’ your crypto, receive any airdropped crypto, or trade large amount on a regular basis, you could also be subject to paying tax. As of 2022 it’s predicted that a massive 4.97 million people in the UK own some form of cryptocurrency, so it’s no surprise HMRC have turned their attention to those who hold it. **What do the letters say?** The letter will indicate that either you currently hold, or have held investments in cryptoassets, and the following three instances may imply that a taxable gain has occurred: 1. If you are / have traded cryptocurrency in the past – for example, if you sold your crypto assets for a greater value than you originally paid for it 2. If you swap one form of cryptocurrency for another form 3. If you purchase something using your cryptocurrency The above three points are examples of crypto disposals. Point 1 is classed as a traditional disposal, where points 2 and 3 are examples which HMRC was to raise awareness about. In these points it’s considered that cryptocurrency has been sold at the point where a transaction has taken place, and therefore either more crypto or something purchased has been received by the owner. In both cases the usual Capital Gains Tax rules would apply. **How much tax is due?** If you receive an HMRC nudge letter, it won’t automatically mean you owe tax but it is worth thinking about whether you need to report any losses or gains. The annual exemption amount for Capital Gains is currently £6,000 for the 2023/34 tax year, but this will reduce to £3,000 in the 2024/25 tax year. If your net gain exceeds this amount in any given tax year, you must report it to HMRC via your self-assessment tax return. Be aware that if your proceeds exceed £50,000, but your gains are below the annual exempt amount, you must still report your gain to HMRC. At SG our cryptocurrency experts will be able to look at the big picture, and advise you on what action you need to take in order to stay on the right side of the taxman. [For more information on whether you owe tax on your cryptocurrency, take a look at our blog](https://sg-accounting.co.uk/blog/do-you-owe-tax-on-cryptocurrency-in-the-uk/) or [get in touch with our team](https://sg-accounting.co.uk/contact/). **What happens next?** As part of HMRC’s tax authority campaign against unpaid crypto tax, it’s considered that the nudge letters will be followed by enquiry letters. Enquiry letters request greater in depth information from yourself and your cryptocurrency holdings, and with HMRC gaining greater access to data, it’ll become much harder to evade their attention. Going into the future investors absolutely must be aware of how much tax they owe on their crypto, or expect the usual treatment from HMRC when tax is evaded. **How can SG Accounting help?** SG is one of the very few accountants out there that’s able to offer crypto advice and support, especially when it comes to how crypto fits in with Limited Company and Sole Trader dealings. Most other accountancy’s see crypto as a ‘flash in the pan’ trend and are expecting it to dissipate imminently, but here at SG we are seeing the real profits people are making, are listening to HMRC’s warnings and future plans, and acting accordingly on our client’s behalf’s. [If this sounds like the type of proactive advice and support you need for your cryptocurrency invests, get in touch](https://sg-accounting.co.uk/contact/). Our team will be able to advise you on the tax due, and help you moving forward. **Categories:** Cryptocurrency, Tax --- ### [Response to the Summer Budget](https://sg-accounting.co.uk/blog/response-summer-budget/) **Published:** March 31, 2015 **Author:** Kerry Newman **Content:** Yesterday’s Summer Budget has mixed news for contractors and small businesses but as always the devil is in the detail and after reading through the budget documents last night the detail is not all there yet (despite being 123 pages!). The budget is a top level proposal and nothing will be enacted until it is written into a Finance Act. We also have another two budgets before most of these changes are planned to come in so plenty of time for George Osborne to backtrack. There are some major changes proposed both good and bad: ### 1. Dividend tax The removal of dividend tax credits and introduction of new dividend taxes. Currently dividends are free of additional tax up to the higher rate tax threshold of £42,385. However it is proposed that a new tax free dividend allowance of £5,000 is introduced with rates of tax above this as below: - 5% tax on dividends between £5,000 and £43,000 per year - 5% tax on dividends between £43,000 and £150,000 per year - 1% tax on dividends above £150,000 per year These changes would come into effect from April 2016. Based on a salary of £15,000 this means dividends of £24,000 per year would now attract tax of £1,425. However, with the large difference in tax on dividends in higher rate it is recommended that, providing there is sufficient profits, dividends of £28,000 per year are paid (from April 2016) in most circumstances. The government has also signalled its intention to increase the higher rate tax threshold to £50,000, so if it does get up to this level the effect of the additional tax would be mitigated to a large extent. An example for a contractor withdrawing a salary of £15,000 and dividends of £24,000 per year. Total personal tax and NI payable in 2015/16 – £1,750 Total personal tax and NI payable in 2016/17 – £3,900 ### 2. Removal of Employment Allowance for single employee companies The Employment Allowance was introduced a couple of years ago to encourage businesses to employ more staff. This was in the form of a discount of £2,000 per year on Employers National Insurance (NI). Now most contractors and small businesses will be paying a low salary and larger dividends which are not subject to NI, so this won’t be such a big hit. We will also be looking out for further announcements on this to see if it is still removed if a spouse or partner is employed in the business. Again this would come into effect from April 2016. For those still able to claim the Employment Allowance it will be increased to £3,000 per year so good news for those businesses employing more than one person. ### 3. Introduction of proposals on travel and subsistence consultation (Umbrella Companies and contractors caught by IR35) Last year the Office of Tax Simplification (yes, there is a department for this and no, we don’t see any evidence of simplification yet!) consulted on a proposal to restrict the travel and subsistence expenses claimed by those contractors working through umbrella companies and also those working through their own limited companies. See here: <https://www.gov.uk/government/consultations/employment-intermediaries-and-tax-relief-for-travel-and-subsistence> The good news for most contractors is this will only affect those who are subject to the control, supervision and direction of their client (broadly those caught by IR35) and those working through umbrella companies. We think we will see a lot more contractors moving from umbrella companies to limited companies over the next year as they look to increase their tax efficiency through claiming travel and subsistence expenses. ### 4. Review of IR35 The Government have asked HMRC to start a dialogue with businesses on how to improve the effectiveness and fairness of existing IR35 legislation. Although this might sound worrying to contractors, we actual welcome a review of this very grey area. IR35 legislation was introduced in 2000 and we are still no closer to getting a clear definition of a disguised employee or genuine limited company contractor. We find it hard to get too excited about it, as it is just the intention to review and we have heard the same from George Osborne for the last 3 or 4 budgets! ### 5. Inheritance Tax The addition of a new nil rate band of £175,000 on top of the existing £325,000 allowance will mean married couples and civil directors will be able to pass on assets worth up to £1m, including the family home, without paying any Inheritance Tax at all. This will be introduced gradually from 2017 with the whole £175,000 being in place by 2020. ### 6. Personal Allowance The Personal Allowance (the amount everyone can earn before paying tax) will be increased to £11,000 from April 2016 with a commitment to increase to 12,500 by the end of this government. ### 7. Corporation Tax Corporation tax will be decreased from 20% to 19% in 2017 and 18% by 2020. This is good news for contractors and will go some way to mitigate the new dividend tax. For contractors with a £100,000 profit it will mean Corporation Tax savings of £2,000 per year. ### 8. Trivial benefits A new trivial benefits allowance will come into place from April 2016. This will mean that benefits of less than £50 per year per employee will not need to be reported or taxed. ### 9. Buy to let property investors Two bits of bad news here for some property investors. Firstly the amount of mortgage interest that can be claimed against your rental profits will be restricted to those under the higher rate tax threshold. This will be tapered away from 2017. Secondly the wear and tear allowance of 10% that could be claimed against your profits will be removed from April 2016 and replaced by the original system of just claiming for the actual costs incurred. So it’s important to keep all your receipts for property expenses from April next year. ### 10. Rent a room scheme Income received from renting a room in your main residence was subject to a free of tax annual allowance of £4,250 for many years, this has now been increased to £7,000. So good news for those renting a room either privately or through sites like Airbnb. ### 11. Childcare From September 2017 free childcare entitlement to be doubled from 15 to 30 hours per week for working parents of 3 and 4 year olds. ### 12. Tax compliance HMRC have been cracking down on the use of tax avoidance schemes and well within their sites are some of the schemes that contractors have been using like Employee Benefit Trusts (EBT) and various off shore arrangements used to avoid tax. The Government has committed to a further £800m investment in HMRC compliance units to tackle this. We have always steered contractors away from these schemes and are glad we did now that we have seen a lot of contractors with backdated tax bills, penalties and interest causing bankruptcy (plus the providers of the scheme running off into the sunset with the fees they have charged leaving the contractors….or more likely their new accountants to try and sort out). With the extra impetus directed on this shady area of tax by HMRC it is hard to see how these schemes can fly under the radar any longer. ### 13. Savers Some good news here for savers in a few forms: 1. The new ISA limit of £15,240 remains for the tax year ending 5 April We would not be surprised to see this increased next year also. 2. Personal Savings From April 2016 no tax will be paid on the first £1,000 (or £500 if a higher rate taxpayer) of interest received. 3. A new Help to Buy ISA will be introduced in December Those saving for their first home will be able to save £200 per month in a help to buy ISA. The Government will then top this up by 25%. This will be capped at a maximum of £3,000 topped up for £12,000 of savings. ### 14. Pensions The Government will consult on a new ISA style pension tax system. At the moment pensions receive tax relief on the way in, growth within the pension is tax free, however, the pension is taxed on the way out. An ISA style system would mean that pensions are paid after tax, growth in the pension is tax free and no tax would be paid on the way out. We will keep an eye on this over the coming months however we can’t see this coming in anytime soon. Pension tax relief will also be limited for those employees earning over £150,000 from £40,000 to £10,000 per year. This will not affect the Employer pension contributions made by the majority of contractors working through a Limited Company. ### Our recommendations The good news is we believe with the right tax planning we can mitigate a lot of the “bad news” changes and take advantage of the “good news” changes. We will need to wait until the Finance Act is drafted to get more detail on some areas but things we can look at are: - Bringing in new employees to retain the Employment Allowance (which actually increases to £3,000 per year from April 2016). - Decreasing salary levels so that more income is taxed at 5% (as dividends) rather than 32% (as salary). - Actually increasing the amount in dividends that can be taken due to the removal of the dividend tax credit, introduction of new £5,000 tax free allowance and increase in basic rate tax A typical structure may then be: £11,000 salary and £32,000 dividends per year – total personal tax payable c£2,000 Compared to a current structure of: £15,000 and £24,000 dividends per year – total personal tax payable c£1,710 In this example you have taken out another £4,000 per year from the business for only another £300 in personal tax. - Tax planning strategies in terms of how much is drawn as dividends and how much is left in the Money left in the business may then be drawn out as a lump sum on closure of the Company at a rate of 10% by using Entrepreneurs Relief. - Review of all of the expenses that you can claim through your business and advice on employer pension contributions that can be made from your ltd - Review of VAT The Flat Rate VAT scheme still remains a great benefit for contractors and far outweighs the additional tax in basic rate on dividends. - Bringing in a spouse as a shareholder/employee to make use of their tax free or lower tax allowances for both salary and dividends. - Bringing in a spouse as a minority shareholder where before it was not as tax efficient to do so (maybe they were earning higher rate income elsewhere). We can now make use of a spouse’s £5,000 tax free dividend - Ensuring full use of the tax free basic rate band is used in 2014/2015. ### Summary For the last few years there has been some really good news for contractors in the budget. Reductions in Corporation Tax, Employment Allowance, increases in Personal Allowances etc were all benefiting the small personal service company, so it is not entirely unexpected to see an increase in taxes now. With a Tory mandate for 5 years this was always going to be the “bad news” budget. There are still some positive things for contractors like the reduction in Corporation Tax, increase in Personal Allowance and basic rate band, large increase in Inheritance Tax thresholds and this is offset by the increase in tax on dividends. As you can see from the example above we are already thinking of ways we can take advantage of this for you and will continue to do so. There is a lot for us to look at over the next few months and we will keep you updated with the changes as we know about them. As always any questions please ask. **Categories:** News --- ### [It’s our 20th Birthday!](https://sg-accounting.co.uk/blog/its-our-20th-birthday/) **Published:** July 16, 2015 **Author:** Kerry Newman **Content:** We are 20 years old this year and over that time have seen many changes to the way in which contractors and small businesses operate and we are pleased to say that many of our clients still remain from those early years. We decided our website and branding was starting to look a bit tired and have had a bit of a makeover. We now have two brands and would love to hear your feedback: - SG Accounting. Fixed fee accountancy and taxation for contractors and freelancers. [sg-accounting.co.uk](https://sg-accounting.co.uk) - Stilwell Gray. Accountancy and taxation services for small businesses and individuals. [stilwellgray.co.uk](http://www.stilwellgray.co.uk) **Categories:** News --- ### [Welcome to Our New Director](https://sg-accounting.co.uk/blog/welcome-to-our-new-partner/) **Published:** September 22, 2015 **Author:** Kerry Newman **Content:** Richard and Sarah have been joined by Dan Mepham as a Director in the business. Dan was previously a Director at a large national firm of accountants and specialised in helping contractors and consultants working through a limited Company. Dan knows the contractor space inside out, regularly contributing to technical articles for contractor websites and publications. **Categories:** News --- ### [Our Services](https://sg-accounting.co.uk/blog/our-services/) **Published:** September 22, 2015 **Author:** Kerry Newman **Content:** We sent out a survey at the beginning of the year and had some really great feedback. Over half of clients responded, so thank you very much if you did. 95% of clients who responded were either very satisfied or somewhat satisfied with our service. We also asked for your feedback on what other services you would like to see and have developed our services to include some of the main requests. We now have 3 service packages which you can find [here](https://sg-accounting.co.uk/prices/). Please contact us if you would like more information on any of our services. **Categories:** News --- ### [Self assessment tax return submissions](https://sg-accounting.co.uk/blog/self-assessment-tax-return-submissions/) **Published:** September 22, 2015 **Author:** Kerry Newman **Content:** You may have seen in the press or on the TV a couple of months ago, news stories that implied that it would be easy to get out of paying an automatic £100 minimum penalty for the late filing of a self assessment tax return. The background to the initial news stories was the leaking of an internal memo of HMRC to its staff dealing with self assessment penalties. A £100 automatic penalty is charged if a self assessment tax return is not submitted by 31 January. Individuals can successfully appeal against the penalty if they have a ‘reasonable excuse’. HMRC provide a list of what they regard as reasonable. Top of the list is ‘your partner died shortly before the tax return or payment deadline’, which provides an indication of the extreme circumstances listed. Despite the automatic penalty system, around 900,000 people failed to submit their tax return on time for the 2013/14 tax year, the deadline for which was 31 January 2015. Many of these individuals appealed against the subsequent £100 minimum penalty causing a backlog of cases in HMRC. The internal memo explained a simplified approach to resolving penalties with the effect that HMRC would accept the taxpayer’s grounds for appeal in the majority of cases without questioning the taxpayer and cancel the penalty. A subsequent press release from HMRC has made it clear that the deadline for appealing fines for the 2013/14 tax year has now passed. It did not state what their approach would be to individuals missing the 2014/15 tax return deadline which is 31 January 2016. The press release does say, in the longer term, HMRC want to move away from sending out penalty notices as a mechanical reaction to a single missed deadline. Instead they want to focus on those who persistently fail to pay or submit their tax returns on time. It is good news, of course, that HMRC will use their right to send out fixed penalty notices in a fair and proportionate way. But it is far safer to meet the deadlines so please do contact us in plenty of time before the forthcoming 31 January to ensure that your self assessment return does not run the risk of being filed late. **Categories:** News --- ### [Changes to the taxation of dividends](https://sg-accounting.co.uk/blog/changes-to-the-taxation-of-dividends/) **Published:** September 22, 2015 **Author:** Kerry Newman **Content:** In the Summer 2015 Budget, George Osborne announced changes to the way in which dividends are taxed. The changes take place for dividends received from 6 April 2016. Some individuals who extract profits from their company as dividends may need to consider whether to increase dividend payments before this date. When a dividend is paid to an individual, it is subject to different tax rates compared to other income due to a 10% notional tax credit being added to the dividend. So for an individual who has dividend income which falls into the basic rate band the effective tax rate is nil as the 10% tax credit covers the 10% tax liability. For a higher rate (40%) taxpayer, the effective tax rate on a dividend receipt is 25%. **From 6 April 2016: - The 10% dividend tax credit is abolished with the result that the cash dividend received will be the gross amount potentially subject to tax. - New rates of tax on dividend income will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. - A new Dividend Tax Allowance will remove the first £5,000 of dividends received in a tax year from taxation. Many owner-managers running their business through a limited company will pay more tax next year if most of the profits are paid out as dividends rather than as a salary. This prospect raises a number of issues which we address below. - There is still a benefit in tax terms for most individuals to continue to trade as a limited company. The tax saved by incorporation compared to being unincorporated will be reduced next year but in the majority of cases there is still large annual tax savings. - There is still a benefit for a director-shareholder to take a dividend rather than a salary. - If you do not currently extract all the company profits as a dividend you may wish to consider increasing dividends before 6 April 2016. However, other tax issues may come into play, for example the loss of the personal tax allowance if your total ‘adjusted net income’ exceeds £100,000. There will also be non-tax issues such as the availability of funds or profits in the company to pay the dividend. Please contact us before you make any decisions about changing the amount of dividends taken. Please note our conclusions above are based on only limited information that has been supplied by the government on the new regime. We expect draft legislation for the regime to be published by the end of the year. **Categories:** News --- ### [Contractor loan schemes](https://sg-accounting.co.uk/blog/contractor-loan-schemes/) **Published:** September 22, 2015 **Author:** Kerry Newman **Content:** **If it sounds too good to be true it normally is! George Osborne announced in the Summer Budget there would be more funds available to HMRC to counter tax avoidance schemes (high profile cases such as Jimmy Carr and Chris Moyles have brought this into the public eye more and more). Contractors using offshore loan schemes are next on the hit list with HMRC saying: “HM Revenue and Customs (HMRC) view is that these schemes don’t work and strongly advises any contractor or freelancer who has used such a scheme to withdraw and settle their tax affairs.” This does not come as much of a surprise to us having dealt with a number of tax investigations for new contractors coming to us having used these schemes and now coming under scrutiny from HMRC. In a lot of the cases the scheme provider has sailed off into the sunset and the contractor is left to defend a scheme they don’t understand on their own. Among HMRCs other new powers is the ability to send out Accelerated Payment Notices (APNs), asking for the upfront settlement of tax before due and whilst in dispute. This has been used by HMRC in a number of tax avoidance scheme investigations so far. Clients of SG Accounting will have nothing to fear as a result of these changes, we believe in doing things right. After all, there is enough you can do to save tax legitimately. In one example recently a potential client came to us to compare the tax home pay percentage offered by a contractor loan scheme compared to the limited company solution. The contractor was quite surprised when we explained that the tax home pay would be 5% better through a genuine limited company set up rather than the off shore loan scheme….and the difference would go to HMRC as tax rather than to the loan scheme provider! **Categories:** Finance, News --- ### [Maximising tax relief for two homes](https://sg-accounting.co.uk/blog/maximising-tax-relief-for-two-homes/) **Published:** September 22, 2015 **Author:** Kerry Newman **Content:** The UK tax regime provides an important relief from the capital gains tax charge (CGT) on the gains made by owner-occupiers on the sale of their private homes. This is known as Principal Private Residence relief (PPR). The general principle is that only one home can count as a PPR at any one time. However prior to 6 April 2014, where a private home qualified for PPR at any stage during the period of ownership, the last three years of ownership qualified for PPR, even if the property was not lived in during that three year period. That period was reduced for most individuals to 18 months for disposals made on or after 6 April 2014. Although the period has been reduced there is still useful tax planning that can be achieved for someone who has recently acquired an additional property which will also be a home, for example a property ‘in the country’ which will be lived in at various periods in the year. The example shows the potential advantages of making a ‘PPR election’. **Example** Mr and Mrs White have lived in a property in Leeds for a number of years. They are now semi-retired and acquire a second property in Wales in which they intend to also reside. They start to occupy the Welsh property on 1 June 2015. As the Leeds property already qualifies for PPR up to 1 June 2015 the gains accruing on a time apportioned basis to the last 18 months of ownership will be relieved even if they nominate the other property to be their PPR. They therefore elect for the Welsh property to be their PPR on 1 December 2016. This means this property will also benefit from PPR for the last 18 months of ownership. They may vary that nomination back to the Leeds property at any time. If the variation is made within a short period of time then any resulting gain on the Leeds property will likely be covered by their annual exemptions. If they want to change their minds again about the nomination, they can do so. However none of this flexibility is available if the first election has not been made to HMRC within two years of the time when the second property became available to live in. Last year the government issued proposals to remove the ability for everyone to make an election but it has changed its mind. Instead the government has implemented changes which affect non-resident individuals with property in the UK and UK residents with property abroad. Prior to 6 April 2015, an individual who was not resident in the UK was not subject to UK CGT on residential property so could sell the property free from UK CGT irrespective of the availability of PPR relief. From 6 April 2015 UK residential property classed as ‘dwellings’ is brought into UK CGT for non-UK resident persons. Further changes restrict the availability of nominating a property for PPR. Examples of the individuals affected by these changes are: - UK residents who go to work abroad and acquire an overseas second home in the country in which they work - individuals who retire overseas but keep their homes in the UK. They may be entitled to PPR for the period prior to 6 April 2015 but will have difficulty in getting the PPR to apply to the UK property after that date. However the last 18 months of ownership may continue to qualify for PPR. Please contact us if you consider these changes affect you or you wish to consider making an election for PPR where you have two homes in the UK. **Categories:** Tax **Tags:** Switching - Service --- ### [Changes in Dividend Taxes from April 2016](https://sg-accounting.co.uk/blog/changes-dividend-taxes-april-2016/) **Published:** February 10, 2016 **Author:** Kerry Newman **Excerpt:** From 6 April 2016 there are changes to the way in which dividends will be taxed. The complicated 10% tax credit system is being removed so all dividends will be paid net and new rates will be introduced to tax the dividends received in the year. **Content:** From 6 April 2016 there are changes to the way in which dividends will be taxed. **A summary of the changes** The complicated 10% tax credit system is being removed so all dividends will be paid net and new rates will be introduced to tax the dividends received in the year. *Post 5 April 2016* The first £5,000 in dividends will be tax free. Above this dividends will be taxed at: 7.5% for basic- rate tax payers (below £43,000) 32.5% for higher-rate tax payers (above £43,000 per year) 38.1% for additional-rate tax payers (above £150,000 per year) **What is our advice for trading as tax efficiently as possible?** 1. **Reduce the salary being paid through the company.** Some contractors have paid a salary level of over the personal allowance (personal allowance is £11,000 for the year) to show some tax and NI being allocated to your record. Under the new system most contractors will be paying tax under the new dividend tax regime and therefore should look to reduce the salary being paid through the Company. Our advice from April 2016 would be to have a level of salary as below: 1. **£11,000 if you have more than one employee in the Company (e.g. a spouse).** Having more than one employee through the business will mean you can continue to claim the employment allowance (reduction in employers NI). 2. **£8,060 if you are the only employee in your Company.** New rules mean the employment allowance is withdrawn where the Director is the sole employee. A salary of £8,060 will still give you a qualifying year for state pension entitlement. Corporation Tax relief is available on the salary and the salary level is below your personal allowance. 2. **Increase the amount of dividends being taken from the Company.** With the removal of the 10% dividend tax credit it will mean more net dividends can be taken from the Company before hitting the higher rate tax threshold (£43,000).The optimum amount of dividends in each tax year will be: 1. £32,000 per year (6 April to 5 April) or £2,666 per month. If on a salary of £11,000 per year. 2. £34,940 per year (6 April to 5 April) or £2,911 per month. If on a salary of £8,060 per year. 3. **Don’t take more out of the Company than you need.** The main tax planning opportunity for ltd company contractors hasn’t changed….ultimately you have the flexibility to decide how much tax you pay by increasing or decreasing dividends. The most tax efficient method will be to take dividends and salary based on the advice in points 1 and 2 above and any extra profit to be left in the Company. *What happens to the money saved within the Company?* You have a few options with this: 1. Make investments in the Company name e.g. shares, bonds, property. Although it is worth getting advice from us first to ensure the trading status of the company is preserved. 2. Make other larger one off dividend payments and paying the higher rate (32.5%) or additional rate (38.1%) tax. There are ways to mitigate this as well. For example income tax relief on EIS and SEIS investments. 3. Leave the money in the Company and when you come to cease contracting you could either: 1. Draw out £5,000 per year tax free 2. Liquidate the Company and draw out the total profits in one lump sum at 10% tax rate using Entrepreneurs Relief subject to the new 2 year rule. 4. Contributing to a pension scheme is becoming more and more appealing now especially for those approaching 55 who could draw down on it at that age. The tax relief is two-fold in that the Company would receive Corporation Tax relief at 20% and you personally would draw less from the business in dividends. 4. **Pay dividends to a spouse previously not receiving dividends.** Under the new dividend tax system the first £5,000 of dividends will be tax free regardless of what level of income you have elsewhere. Therefore a spouse who was previously earning over the higher rate threshold and not receiving dividends from your company could now receive £5,000 tax free. If this is the case please contact us to see if we can rearrange the shareholding to accommodate this. **How will the new dividend tax regime affect me?** We look at a few typical examples below: 1. *Current salary of £15,000 and dividends of around £26,000 per year.* Old system up to 5 April 2016 – tax payable of £1,710 and net take home of roughly £39,290. New system from 5 April 2016 – tax payable of £2,025 and net take home of roughly £40,975. So a personal tax increase of £315 per year but an additional £1,685 per year has been taken from the Company. 2. *Current salary of £20,000 and dividends of around £21,000 per year.* Old system up to 5 April 2016 – tax payable of £3,310 and net take home of roughly £37,690. New system from 5 April 2016 – tax payable of £2,025 and net take home of roughly £40,975. So a personal tax decrease of £1,285 per but an additional £3,285 per year has been taken from the Company. 3. *Current salary of £10,600 and dividends of around £29,800 per year.* Old system up to 5 April 2016 – tax payable of £nil and net take home of roughly £40,400. New system from 5 April 2016 – tax payable of £2,025 and net take home of roughly £40,975. So a personal tax increase of £2,025 per year but an additional £575 per year has been taken from the Company. Please note figures above do not include Corporation Tax relief to counteract additional salaries. **What else do I need to think about?** 1. *Physical payments of tax* If the salary is reduced and dividends increased there will be less (or no) tax to pay quarterly under PAYE. Instead the tax will be payable annually as part of your Self Assessment tax return calculations. This will be due by the 31 January following the end of the tax year. 2. *Payments on account* If you had not paid tax (or had a liability below £1,000) under Self Assessment previously then you will have to make the payment for the previous year plus payments on account in respect of the current year. So, if you had a liability of £2,025 for the year ended 5 April 2017, your tax payable would be: Due 31 January 2018 – £3,037.50 £2,025.00 – balance of tax for the year ended 5 April 2017 £1,012.50 – 50% of tax for the year ended 5 April 2018 Due 31 July 2018 – £1,012.50 £1,012.50 – remaining 50% of the tax for the year ended 5 April 2018 **What are the next steps?** Ahead of the new tax year we will be taking a look at each of our client’s individual circumstances and adjusting salary levels to the most tax efficient levels as below: - £11,000 per year if more than one employee through the Company - £8,060 per year if only one employee through the Company The payroll summary will be emailed through to you at the start of the new tax year in April 2016. **Categories:** News --- ### [Chancellor presents a ‘next-generation Budget’](https://sg-accounting.co.uk/blog/chancellor-presents-next-generation-budget/) **Published:** March 17, 2016 **Author:** Kerry Newman **Excerpt:** What does it mean for contractors and small businesses? There is more information in the following pages but the main areas of interest for contractors and small businesses are as follows **Content:** **What does it mean for contractors and small businesses?** There is more information in the following pages but the main areas of interest for contractors and small businesses are: - Corporation tax rates will fall from 20% to 19% in April 2017, 18% in April 2019 and 17% in April 2020. This is good news for contractors and softens the blow of the new dividend taxes. - The Government has announced that they will consult on proposals to change the way contractors working in the public sector are assessed for IR35. The intention being that IR35 status determination will be the responsibility of the agency (or public sector organisation if no agency). We are expecting a consultation on this around May time this year and also some more information on how they will decide IR35 status (likely to be an online tool maintained by HMRC). There is no mention of an appeal mechanism so this is something we will be watching closely. No changes for non-public sector contractors announced in relation to IR35. - Capital gains tax rates to fall from 28% to 20% (if higher rate tax payer) or from 18% to 10% (if basic rate tax payer) – property disposals will continue to be at the old rates however. Speak to us if you have any non-property disposals planned as it may be worth delaying until after 6 April 2016. This will mean that a capital distribution on closing a company may still be more beneficial than drawing as dividends even where Entrepreneurs Relief cannot be claimed. - Entrepreneurs Relief – no changes here affecting most contractors. Just a reiteration of the new 2 year post closure rule (Entrepreneurs relief cannot be claimed on closing down a company if you will be carrying on the same trade or activity within 2 years….where one of the main reasons for closing was tax mitigation). - A new pension ISA for under 40’s in which contributions can be made up to £4,000 per year and it is topped up by a further £1,000 contribution by the government. The best thing about this we can see is basic rate tax payers are better off by 5% and the money can still be accessed for buying a first home or withdrawn early (albeit losing the government contribution). - Small business rate relief threshold rising to £12,000. Giving small businesses rate relief depending on the rateable value of their property. - ISA allowance to rise to £20,000 from April 2017. - Income tax personal allowance to rise to £11,500 from April 2017 and basic rate band up to £33,500 meaning higher rate tax will kick in from £45,000. - Class 2 NICs (£2.80 per week) for the self employed abolished from 2018. - Loans made from a ltd company and outstanding 9 months after the year end will be taxed at 32.5% (previously 25%) to align to new dividend tax rates. This tax is fully repayable to the company when the loan is repaid however. **Budget summary** Chancellor George Osborne delivered his eighth Budget to the House of Commons, dubbing it a ‘Budget for the long term’ but warning that ‘the storm clouds are gathering again’. Having proclaimed that the British economy is ‘fit for the future’ and that the Government remains on course to achieve a budget surplus of £10.4bn in 2019/20, the Chancellor warned that growing global economic gloom threatens the UK. With low productivity growth and a weak global outlook continuing to present a ‘dangerous cocktail of risks’, the Chancellor revealed that the Office for Budget Responsibility (OBR) has significantly revised down its economic forecasts for the next five years, with UK economic growth forecast to be just 2% in 2016. Official figures also revealed that the Chancellor has missed his target to reduce debt as a share of GDP. Borrowing forecasts have been revised upwards to £55.5bn for 2016/17, and the Chancellor announced the need for deeper spending cuts, with £3.5bn of additional savings to be made by 2019/20. With an EU referendum fast approaching the Chancellor was keen to point out that the OBR’s forecasts were predicated on there being no Brexit, and claimed that leaving the EU could usher in a ‘period of uncertainty’ for the UK. The Chancellor revealed a package of business tax measures, announcing that in England the Small Business Rate Relief threshold will rise from £6,000 to £12,000 from April 2017 and promising further radical changes, with the uprating of business rates set to change from RPI to CPI. Greater London will see the complete devolution of business rates from next April. Meanwhile, for individuals, building on the recent announcement of a new Help to Save scheme, the Chancellor unveiled a new Lifetime ISA, which is intended to allow adults aged under 40 the opportunity to save up to £4,000 a year towards buying their first home (up to a limit of £450,000) or to save towards their retirement, and which the Government will top up by 25%. Other key announcements on personal taxation included the next step in the Government’s drive to increase the income tax personal allowance, which will rise to £11,500 from April 2017, at which time the threshold for higher rate tax will also rise to £45,000. Capital gains tax rates will also be cut, with the headline rate falling from 28% to 20% and the basic rate from 18% to 10% with effect from 6 April 2016. Fuel duty will remain frozen for the sixth consecutive year, while tobacco duties will rise above inflation, and from 2018 a new sugar levy on the soft drinks industry will aim to combat the problem of childhood obesity. Other significant measures include additional investment in the nation’s infrastructure, further measures towards the ‘devolution revolution’ and plans to turn every school in England into an academy. **Business tax and investment incentives** Corporation tax rates are as follows: | Financial year to | 31 March 2017 | 31 March 2016 | |---|---|---| | Corporation tax rate | 20% | 20% | The corporation tax rate will be 19% for the financial years beginning 1 April 2017, 1 April 2018 and 1 April 2019, and 17% for the financial year beginning 1 April 2020. **Corporation tax loss relief** For losses incurred on or after 1 April 2017, businesses will be able to use carried forward losses against profits from other income streams or from other companies within a group. From 1 April 2017, the amount of profit that can be offset through losses carried forward will be restricted to 50%. This restriction will only apply to profits in excess of £5m. For groups, the £5m allowance will apply to the group. **Corporation tax payment dates** It was previously announced that companies with annual taxable profits of £20m or more would make corporation tax payments in the third, sixth, ninth and twelfth months of their accounting period. The introduction of this is to be deferred so that the new payment dates will now apply to accounting periods starting on or after 1 April 2019. **Tax deductibility of corporate interest expenses** The Government is to cap the amount of relief for interest to 30% of a group’s taxable earnings in the UK or based on the net interest to earnings ratio for the worldwide group. The rule will be introduced from 1 April 2017 and will include a group threshold limit of £2m net UK interest expense and provisions for public benefit infrastructure. **Loans to participators** The rate of tax charged on loans to participators and other arrangements is to be increased from 25% to 32.5% so that it continues to mirror the higher rate of dividend tax. This new rate will apply to loans made and benefits conferred by close companies on or after 6 April 2016. For accounting periods which straddle 6 April 2016, different rates will be applied to separate loans made or benefits conferred before, and on or after, 6 April 2016. **Personal service companies** The Government has announced that they will consult on proposals to change the way contractors working in the public sector are assessed for IR35. The intention being that IR35 status determination will be the responsibility of the agency (or public sector organisation if no agency). We are expecting a consultation on this around May time this year and also some more information on how they will decide IR35 status (likely to be an online tool maintained by HMRC). There is no mention of an appeal mechanism so this is something we will be watching closely. No changes for non-public sector contractors announced in relation to IR35. **Profits from trading in and developing UK land** Legislation will be introduced to ensure that non-resident developers of UK property will always be brought into UK tax on the profits from that development. The legislation puts in place a specific set of rules to tax trading profits derived from land in the UK and these rules will apply equally to resident and non-resident businesses, and will not depend on the existence of a ‘permanent establishment’ in the UK. The legislation will be introduced at Report Stage of Finance Bill 2016 and will take effect from the date of introduction. Anti-avoidance rules will take effect from Budget Day to counteract arrangements, put in place between Budget Day and the date the new legislation is introduced, that are designed to get around the charge. **Research and Development (R&D)** Legislation is to be introduced to prevent an unintended reduction in the R&D relief available to some SMEs when the Large Company relief, which is being replaced by R&D Expenditure Credit, expires on 31 March 2016. The revised calculation will apply in respect of expenditure incurred on or after 1 April 2016. Vaccine research relief will cease to apply to expenditure inccurred on or after 1 April 2017. **Enterprise Management Incentives (EMI)** A rights issue which takes place on or after 6 April 2016 in respect of shares received on exercise of an EMI option will be treated in the same way for share identification purposes as other rights issues: the new shares will be treated as acquired at the same time as the original shares. **Enterprise Zones** The period in which businesses investing in new plant and machinery, in enhanced capital allowance sites in Enterprise Zones, can qualify for 100% capital allowances is to be extended to eight years. The legislation will have effect from Royal Assent. **Venture capital schemes** The method of determining the five year period for the average turnover amount and the relevant three preceding years for the operating costs conditions will be clarified for both Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) to ensure that the most recently filed accounts of a company are generally used to determine the end date of the relevant period. This will have effect from 18 November 2015 for shares issued under EIS and for investments made by VCTs, however an investee company may elect to apply the existing legislation for investments received between 18 November 2015 and 5 April 2016, inclusive. A new condition will be introduced to clarify the non-qualifying investments a VCT may make for liquidity management purposes. This will have effect from 6 April 2016. **Trading income received in non-monetary form** Legislation will be introduced to confirm that trading and property business income received in non-monetary form is brought into account in calculating taxable profits for corporation tax and income tax purposes. This will have effect in relation to transactions occurring on or after 16 March 2016. **National insurance contributions (NICs)** ![National insurance constributions](https://sg-accounting.co.uk/wp-content/uploads/2016/03/national-insurance-constributions.png "National insurance constributions | SG Accounting") *\*No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement.* *\*\*Over state pension age, the employee contribution is generally nil.* ![Employment allowance](https://sg-accounting.co.uk/wp-content/uploads/2016/03/employment-allowance.png "Employment allowance | SG Accounting") *\*Exemption applies if State Pension age was reached by 6 April 2016.* **Changes to the Employment Allowance** From April 2016 the annual Employment Allowance for employer NICs increases from £2,000 to £3,000. However, companies where the director is the sole employee will no longer be able to claim this allowance. **Future changes** It was announced that from April 2018, Class 2 NICs will be abolished, and a reform of Class 4 NICs will be undertaken. **Termination payments** From April 2018, employer NICs will be due on termination payments above £30,000 that are already subject to income tax. The first £30,000 of a termination payment will remain exempt from income tax and the full payment will be outside the scope of employee NICs. **Tax and travel** The taxable petrol and diesel car benefit is based on the car’s CO2 emissions. It is calculated using the car’s UK list price and applying the ‘appropriate percentage’, as shown in the table on the right. The car fuel benefit is calculated by applying the same percentages to the fuel benefit charge multiplier, which for 2016/17 is £22,200. From April 2015, the five year exemption for zero carbon and the lower rate for ultra-low carbon emission cars came to an end. Two new bands were introduced for ultra-low emission vehicles (ULEVs). These were set at 0-50 g/km (5%) and 51-75 g/km (9%). The appropriate percentages for the remaining bands were increased by 2% for cars emitting more than 75 g/km, to a new maximum of 37%. From April 2016, all the appropriate percentages will be increased by 2%, up to the maximum of 37%. In addition, new European standards which came into force in September 2015 required diesel cars to have the same air quality emissions as petrol cars. The 3% diesel supplement was set to be removed in April 2016. However, it will now be retained until April 2021, when EU-wide testing procedures will ensure new diesel cars meet air quality standards even under strict real-world driving conditions. The appropriate percentage will increase by 2% for cars emitting more than 75 g/km to a maximum of 37% in each of years 2017/18 and 2018/19. | **CO2 emissions (g/km)** | **Appropriate percentage** | |---|---| | **Petrol** | **Diesel** | | 0 – 50 | 7 | 10 | | 51 – 75 | 11 | 14 | | 76 – 94 | 15 | 18 | | 95 – 99 | 16 | 19 | | 100 – 104 | 17 | 20 | | 105 – 109 | 18 | 21 | | 110 – 114 | 19 | 22 | | 115 – 119 | 20 | 23 | | 120 – 124 | 21 | 24 | | 125 – 129 | 22 | 25 | | 130 – 134 | 23 | 26 | | 135 – 139 | 24 | 27 | | 140 – 144 | 25 | 28 | | 145 – 149 | 26 | 29 | | 150 – 154 | 27 | 30 | | 155 – 159 | 28 | 31 | | 160 – 164 | 29 | 32 | | 165 – 169 | 30 | 33 | | 170 – 174 | 31 | 34 | | 175 – 179 | 32 | 35 | | 180 – 184 | 33 | 36 | | 185 – 189 | 34 | 37 | | 190 – 194 | 35 | 37 | | 195 – 199 | 36 | 37 | | 200 and above | 37 | 37 | **VAT on fuel for private use in cars** Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation charge. **Plug-in Grants** Motorists (private or business) purchasing new qualifying ultra-low emission cars can receive a grant of 35% towards the cost of the vehicle, up to a maximum of either £2,500 or £4,500 depending on the model. The scheme also covers new qualifying ultra-low emission vans, where the available grant will be 20% towards the cost of the vehicle, up to a maximum of £8,000. Vehicles with CO2 emissions of 75 g/km or less, including electric, plug-in hybrid and hydrogen-fuelled cars, are potentially eligible for the subsidy. There are strict criteria to be met before specific vehicles can be confirmed as eligible under the rules of the scheme. **Zero emission vans** As previously announced, the benefit for zero emission vans is to be increased on a tapered basis so that there will be a single van benefit charge applying to all vans by April 2020. For 2016/17 the charge will be 20% of the value of the standard van benefit charge (i.e. £634). There is no fuel benefit for such vans, as set out below. **Company vans** The taxable benefit for the unrestricted private use of vans is £3,170. There is a further £598 taxable benefit if the employer provides fuel for private travel. | Van and fuel charge | Van £ | Fuel £ | Total £ | |---|---|---|---| | Tax (20% taxpayer) | 634 | 119.60 | 753.60 | | Tax (40% taxpayer) | 1,268 | 239.20 | 1,507.20 | | Tax (45% taxpayer) | 1,426.50 | 269.10 | 1,695.60 | | Employer’s Class 1A NICs | 437.46 | 82.52 | 519.98 | **Mileage rates** Changes to the HMRC business mileage rates are announced from time to time. The rates from 1 March 2016 are as follows: ![Mileage rates](https://sg-accounting.co.uk/wp-content/uploads/2016/03/mileage-rates.png "Mileage rates | SG Accounting") Car costs – Vehicle Excise Duty (VED) rates VED (‘Car Tax’) rates also reflect emissions. The following table shows the standard rates which apply from 1 April 2016 for cars registered on or after 1 March 2001. | **VED Band** | **CO2 Emissions (g/km)** | **Standard Rate** | **First Year Rate** | |---|---|---|---| | A | Up to 100 | £0 | £0 | | B | 101-110 | £20 | £0 | | C | 111-120 | £30 | £0 | | D | 121-130 | £110 | £0 | | E | 131-140 | £130 | £130 | | F | 141-150 | £145 | £145 | | G | 151-165 | £185 | £185 | | H | 166-175 | £210 | £300 | | I | 176-185 | £230 | £355 | | J | 186-200 | £270 | £500 | | K\* | 201-225 | £295 | £650 | | L | 226-255 | £500 | £885 | | M | Over 255 | £515 | £1,120 | \*includes cars emitting over 225g/km that were registered before 23 March 2006. **Income tax and personal savings** | | 2016/17 | 2015/16 | |---|---|---| | Basic rate band – income up to | £32,000 | £31,785 | | Starting rate for savings income | \*0% | \*0% | | Basic rate | 20% | 20% | | Dividend ordinary rate | \*\*7.5% | 0% | | Higher rate – income over | £32,000 | £31,785 | | Higher rate | 40% | 40% | | Dividend upper rate | \*\*32.5% | 25% | | Additional rate – income over | £150,000 | £150,000 | | Additional rate | 45% | 45% | | Dividend additional rate | \*\*38.1% | 30.6% | | Starting rate limit (savings income) | \*£5,000 | \*£5,000 | *For 2016/17, Scottish taxpayers are effectively subject to the same income tax rates as the rest of the UK. \*If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate limit for savings will not be available for savings income. For 2016/17, £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free. \*\*For 2016/17 the first £5,000 of dividends are tax-free.* *The Government has announced an increase in the basic rate limit for the 2017/18 tax year from £32,400 to £33,500. As a result, the higher rate threshold will be £45,000 in 2017/18.* **Personal allowances (PA)** ![Personal allowances](https://sg-accounting.co.uk/wp-content/uploads/2016/03/personal-allowances.png "Personal allowances | SG Accounting") \*Allowances are reduced by £1 for every £2 that adjusted net income exceeds £27,700 to a minimum PA of £11,000 (£10,600) and to a minimum MCA of £3,220. Where adjusted net income exceeds £100,000, PA is reduced in the same way until it is nil regardless of the individual’s date of birth. The Government has committed to raise the PA to £12,500 by the end of this Parliament, and to increase it to £11,500 for 2017/18. **Tax shelters | | | 2016/17 | 2015/16 | |---|---|---|---| | Venture Capital Trust up to | | £200,000 | £200,000 | | Enterprise Investment Scheme up to | | £1,000,000 | £1,000,000 | | Seed Enterprise Investment Scheme up to | | £100,000 | £100,000 | | Social Investment Tax Relief up to | | £1,000,000 | £1,000,000 | **Micro-entrepreneurs** From April 2017, the Budget introduces two new £1,000 allowances for property and trading income. Individuals with property income or trading income below the level of allowance will no longer need to declare or pay tax on that income. Those with relevant incomes above £1,000 can benefit by simply deducting the allowance instead of calculating their exact expenses. **Individual Savings Accounts (ISAs)** 2016/17 limits: | Overall investment limit | £15,240 | |---|---| | Junior ISA and Child Trust Fund limit | £4,080 | With effect from 6 April 2017, the ISA annual allowance will increase from £15,240 to £20,000. The Government will legislate to allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of their estate and will set out further plans for introducing this measure in 2016. **Lifetime ISA** From 6 April 2017 any adult under 40 will be able to open a new Lifetime ISA. They can save up to £4,000 each year and will receive a 25% bonus from the Government for every pound they put in, up to the age of 50. Funds can be used to save for a first home or for retirement. Features include: - both the savings and Government bonus can be used towards a deposit on a first home, worth up to £450,000 - accounts are limited to one per person rather than one per home – so two first-time buyers can both receive a bonus when buying together - during the 2017/18 tax year, those that have a Help to Buy: ISA can transfer the savings into the Lifetime ISA, or continue saving into both, but will only be able to use the bonus from one to buy a house - after their 60th birthday savers can withdraw the savings, tax-free - savers can withdraw money at any time before their 60th birthday for any purpose, but the Government bonus, together with any interest or growth thereon will be lost. A 5% charge will also be payable. **Pensions** The Government will increase the existing £150 income tax and national insurance relief for employer arranged pension advice to £500. Where a serious ill-health lump sum is paid to an individual who has reached age 75, it will be taxable at that individual’s marginal rate rather than at a flat rate of 45%. A change is to be made to align the tax treatment of a charity lump sum death benefit after a member has died under the age of 75, whether paid out of drawdown pension funds and flexi-access drawdown funds or out of funds that have not been accessed (uncrystallised funds). | **The Scottish rate of income tax (SRIT)**Under the Scotland Act 2012, with effect from 6 April 2016 the Scottish Parliament has the power to set a separate annual rate of income tax for Scottish taxpayers. The new regime means that taxpayers who are deemed to be resident in Scotland will effectively pay two types of income tax on their non-savings income, with the main UK rates of income tax being reduced by 10p for Scottish taxpayers, and the Scottish Parliament levying the SRIT in its place. In its draft Budget in December 2015, the Scottish government announced that the new SRIT will be set at 10p in the pound for 2016/17. However, while the overall rates of tax paid by Scottish taxpayers remain unchanged for the coming year, the new rules will affect many employers and employees. Any employer in the UK, even those based outside Scotland, will see a change to PAYE procedures if a single one of their employees is classed as a Scottish taxpayer for the purposes of SRIT. A new ‘S’ prefix will be added to the tax code of Scottish taxpayers, and payroll software will need to apply the correct rates of SRIT. However, employers should not use an ‘S’ tax code until advised to do so by HMRC. There is no requirement to identify the SRIT proportion of tax on the P60, but the P60 should show a Scottish tax code where relevant. | |---| **Value Added Tax (VAT)** | From | 1 April 2016 | |---|---| | Standard rate | 20% | | VAT fraction | 1/6 | | Reduced rate | 5% | | **Current Turnover Limits** | | | Registration – last 12 months or next 30 days over | £83,000 from 1 April 2016 | | Deregistration – next 12 months under | £81,000 from 1 April 2016 | | Annual and Cash Accounting Schemes | £1,350,000 | | Flat Rate Scheme | £150,000 | **Duties** Alcohol duty With effect from 21 March 2016 the following duty rates will be frozen in cash terms this year: - duty rates on beer - duty rates on spirits and other drinks above 22% alcohol by volume (abv) - duty rates on still cider and lower strength sparkling cider. The duty rates on wine and made-wine at or below 22% abv, and high strength sparkling cider above 5.5% abv will rise by RPI inflation from 21 March 2016. **Tobacco duty** With effect from 6pm on 16 March 2016, the hand-rolling tobacco duty rate is increased by 5% above RPI inflation this year. This is an additional 3% rise above the tobacco duty escalator which, as announced at Budget 2014, will continue until the end of this Parliament. **Fuel duty** The main rate of fuel duty for petrol and diesel will remain frozen at 57.95p per litre in 2016/17. Stamp duty land tax (SDLT) for non-residential property Changes take effect on and after 17 March 2016 for purchasers of non-residential property with an upfront payment worth more than £150,000 or a lease net present value (NPV) of more than £5m. These measures do not apply in Scotland. The measure changes the rules for calculating the SDLT charged on purchases of non-residential properties and transactions involving a mixture of residential and non-residential properties. At present, for purchases of freehold, the assignment of an existing lease and for the upfront payment (premium) on a new leasehold transaction, SDLT is charged at a single percentage of the price paid for the property, depending on the rate band within which the purchase price falls. On and after 17 March 2016, SDLT will be charged at each rate on the portion of the purchase price which falls within each rate band. The new rates and thresholds for freehold purchases and lease premiums are: | Transaction Value Band | Rate | |---|---| | £0 – £150,000 | 0% | | £150,001 – £250,000 | 2% | | £250,000 + | 5% | For new leasehold transactions, SDLT is already charged at each rate on the portion of the NPV of the rent which falls within each band. On and after 17 March 2016 a new 2% rate for rent paid under a non-residential lease will be introduced where the NPV of the rent is above £5m. The new rates bands and thresholds for rent paid under a lease are: | NPV of rent | Rate | |---|---| | £0 – £150,000 | 0% | | £150,001 – £5,000,000 | 1% | | £5,000,000 + | 2% | SDLT: higher rates on purchases of additional residential properties From 1 April 2016 changes will apply to individuals purchasing a residential property in England, Wales and Northern Ireland who, at the end of the day of the transaction, own two or more residential properties and are not replacing a main residence. Companies and other non-natural persons purchasing residential property will also be subject to the higher rates, including the first purchase of a residential property in England, Wales and Northern Ireland. The higher rates will be three percentage points above the current SDLT rates, as follows: | Threshold | Existing SDLT rates | New additional property SDLT rates | |---|---|---| | £0 – £125,000 | 0% | 3% | | £125,000 – £250,000 | 2% | 5% | | £250,000 – £925,000 | 5% | 8% | | £925,000 – £1,500,000 | 10% | 13% | | £1,500,000 + | 12% | 15% | A similar levy will apply to the Land and Buildings Transaction Tax in Scotland. **Capital taxes** Capital gains tax (CGT) | On chargeable gains | 2016/17 | |---|---| | Total taxable income and gains | | | Up to £32,000 | 10% | | From £32,001 | 20% | | Trust rate | 20% | Annual exempt amount – individuals £11,100 and most trustees £5,550. Budget 2016 announces that, from 6 April 2016, the higher rate of CGT will be reduced from 28% to 20%, and the basic rate from 18% to 10%. There will be an eight percentage point surcharge on these new rates for carried interest and for gains on residential property. Private Residence Relief will continue to ensure that an individual’s main home is not subject to CGT. **Employee Shareholder Status (ESS)** Budget 2016 introduces an individual lifetime limit of £100,000 on gains eligible for CGT exemption through ESS. This limit will apply to arrangements entered into on or after 17 March 2016, and will not apply to arrangements already in place. **Entrepreneurs’ relief (ER)** Qualifying gains will be taxed at 10%. Claims may be made on more than one occasion up to a ‘lifetime’ total of £10m. ER will be extended to external long term individual investors in unlisted companies, providing a 10% CGT rate for gains accruing on the disposal of newly issued shares in unlisted companies purchased on or after 17 March 2016. This new investors’ relief is subject to the shares being held for a minimum of three years from 6 April 2016, and a separate lifetime limit of £10m of gains. **Goodwill on incorporation** The Government will allow ER to be claimed, subject to certain conditions, on gains on the goodwill of a business when that business is transferred to a company controlled by five or fewer persons or by its directors. These changes will take effect for disposals made on or after 3 December 2014. **Associated disposals** There are to be changes to the availability of ER on associated disposals which will be backdated with effect from 18 March 2015. The changes allow ER to be claimed on an ‘associated disposal’ of a privately-held asset when the accompanying disposal of business assets is to a family member. Relief can also be claimed in some cases where the disposal of business assets does not meet the present 5% minimum size condition. **Joint ventures and partnerships** Changes to the definition of a ‘trading company’ and a ‘trading group’ for ER purposes are to be introduced and will apply to disposals on or after 18 March 2015. Where the new definitions apply, a fraction of the activities of a joint venture company will be treated as carried on by a company which holds shares in the joint venture company. Similarly, where the new definitions apply, trading activities of a company in its capacity as a partner in a firm will be taken into account in deciding whether the company is a trading company for ER purposes. **Property: Finance costs** Legislation will be introduced in Finance Bill 2016 to clarify that the basic rate tax reduction is available to beneficiaries of deceased persons’ estates. It will also ensure that the basic rate reduction applies and is calculated as intended. **National Minimum Wage and National Living Wage** From 1 April 2016, the new National Living Wage (NLW) will be introduced for workers aged 25 and above, in the form of a premium on top of the existing National Minimum Wage (NMW). Initially set at £7.20, the NLW is expected to rise to over £9 by 2020. A new NMW rate comes into effect on 1 October each year and will continue to apply for those aged under 25. The table below shows the NMW and NLW rates applying from **1 April 2016**. ![National minimum wage](https://sg-accounting.co.uk/wp-content/uploads/2016/03/national-minimum-wage-1.png "National minimum wage | SG Accounting") The Government has also announced an increase in the NMW from **1 October 2016**, as follows: ![National minimum wage](https://sg-accounting.co.uk/wp-content/uploads/2016/03/national-minimum-wage-2.png "National minimum wage | SG Accounting") *\*Rate applies to apprentices under 19, or those 19 and over in the first year of apprenticeship.* The NMW and NLW cycles will be aligned with effect from April 2017 so that both rates are amended in April each year. **Other measures announced** Real time collection of tax on benefits in kind: voluntary payrolling Measures will be introduced to extend the voluntary payrolling framework to allow employers to account for tax on non-cash vouchers and credit tokens in real time from 6 April 2017. **Apprenticeship levy** As announced at the Autumn Statement 2015, an apprenticeship levy will be introduced in April 2017. It was announced in the Budget that from April 2017, employers will receive a 10% top-up to their monthly levy contributions in England and this will be available for them to spend on apprenticeship training through their digital account. **Business rates** Following the business rates review, the Government has announced that from 1 April 2017 it will permanently double Small Business Rate Relief in England from 50% to 100%. It will also increase the thresholds so that businesses with a property with a rateable value of £12,000 and below will receive 100% relief, while businesses with a property with a rateable value between £12,000 and £15,000 will receive tapered relief. **Museums and galleries tax relief** A new tax relief for museums and galleries will be introduced from 1 April 2017 following a consultation over Summer 2016. The relief will be available for temporary and touring exhibition costs. **Soft drinks industry levy** A new soft drinks industry levy will be introduced, to be paid by producers and importers of soft drinks that contain added sugar. The levy will be charged on volumes according to total sugar content, with a main rate charge for drinks containing above five grams of sugar per 100 millilitres and a higher rate for drinks with more than eight grams of sugar per 100 millilitres. There will be an exclusion for small operators. Following consultation, legislation will be introduced in Finance Bill 2017 and implemented from April 2018. **Insurance Premium Tax (IPT)** The standard rate of IPT will be increased from 9.5% to 10% with effect from 1 October 2016. **Petroleum Revenue Tax** The Government will permanently reduce the rate of Petroleum Revenue Tax from 35% to 0%, taking effect for chargeable periods ending after 31 December 2015. **Categories:** News --- ### [Autumn 2016 Statement](https://sg-accounting.co.uk/blog/autumn-2016-statement/) **Published:** November 23, 2016 **Author:** Kerry Newman **Content:** Philip Hammond has just delivered his first Autumn Statement and announced a whole raft of changes in government policy ranging from Research and Development incentives to help bridge the “productivity gap” to a £7.6m grant to save Wentworth Woodhouse – the inspiration for Pemberley in Jane Austen’s Pride & Prejudice. So, what do you need to know? We at SG Accounting are busy reviewing the various documents released following the Autumn Statement and will identify the policies that will affect you. We have listed below the most prominent in Hammond’s speech, but keep an eye on our [Blog Page](/blog/) over the coming days as we will be issuing further updates as the finer details emerge. - Personal allowance and higher rate threshold The government will meet its commitment to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000, by the end of this Parliament. Next year, the personal allowance will rise to £11,500 and the higher rate threshold to £45,000. SG View An increase in the tax free threshold is good news for contractors and small businesses who can draw more money from their company as salary and dividends at lower rates from April 2017. - National Insurance thresholds As recommended by the Office of Tax Simplification, the National Insurance thresholds will be aligned from April 2017, meaning that both employees and employers will start paying National Insurance on weekly earnings above £157. SG View For contactors receiving a low salary with the majority of their income in dividends, this isn’t likely to prove a big change. - Disguised remuneration Budget 2016 announced changes to tackle the use of disguised remuneration schemes by employers and employees. The government will now extend the scope of these changes to tackle the use of disguised remuneration avoidance schemes by the self-employed. However, in a notable change of tone to his predecessor, Hammond stated that the government would only ‘consult in due course’ over proposed changes – seemingly suggesting that he has other priorities to attend to first. SG View Good news for private sector contractors in so far as no news is good news with regards to IR35. - VAT Flat Rate Scheme The government will introduce a new 16.5% rate from 1 April 2017 for businesses with limited costs, such as many labour-only businesses. On first reading of this new measure, it may be that contractors will be affected by this change, resulting in a reduction in the profit made from registering onto the scheme. We will of course be reviewing the detail and advising on any action needed or the future benefits of the scheme. SG View This seems like a strange move considering the emphasis the government has put on simplifying the tax system. Why bring in a system that might mean contractors and small businesses go back to claiming VAT on expenses instead? The flat rate VAT scheme was designed to save time and admin not only for the business but also for HMRC itself. Time will tell (we are expecting legislation 5 December 2016) whether the changes will mean contractors stay on the flat rate scheme or not. - Tax avoidance schemes The Chancellor said that, to tackle tax avoidance, the government would “strengthen sanctions and deterrents” and will take further action to clamp down on scheme promoters. SG View We welcome the continued efforts of the government to tackle aggressive tax avoidance schemes. At SG, we only offer perfectly legitimate tax planning advice to ensure your affairs are efficient as possible. - Letting agents fees Letting agents will be banned from charging fees to tenants, so it would appear that this is another government policy designed to hit landlords as no doubt letting agents will simply change their fee structures to pass the costs on to landlords. SG View Good news for those renting properties but will it mean that the landlords recoup their costs via an increase in rents? - Off-payroll working in the public sector Following consultation, the government will reform the rules in the public sector from April 2017 by moving responsibility for operating them and paying the correct tax, to the body paying the worker’s company. Following consultation, the 5% tax-free allowance will be removed for those working in the public sector, reflecting the fact that workers no longer bear the administrative burden of deciding whether the rules apply SG View Changes for public sector contractors are still pressing ahead from April 2017. The responsibility for determining IR35 will pass to the public sector body or intermediary. Time will tell whether we will see a strict approach to the application of the rules and what the government’s new online IR35 status tool looks like. - Corporation Tax Hammond confirmed that the government will be sticking to its promise of reducing the rate of Corporation Tax in order to support UK business. The rate will reduce from 20% currently to 17% – the lowest in the G20. SG View This is a welcome relief for small business owners, especially given the new dividend tax changes implemented this year. A small business with profits of £75,000 per year will save £2,250 in Corporation Tax. In summary, early indications are that it’s a mixed bag for most contractors and freelancers with some potential changes to the beneficial Flat Rate Scheme but also some welcome news about increased tax allowances and reduced Corporation Tax rates. SG Accounting was established in 1995 to service the accountancy and taxation needs of professional contractors and freelancers. We are based in Winchester, and also spend much of our time travelling to meet our clients around the UK. Bringing a true personal service to contractors across the country, we believe in saving you time and tax! When you call us, you’ll speak to an accountant, not a sales team. If you would like to discuss any of the issues raised in this years Autumn Statement, please feel free to call us direct on 01962 867550 or visit our website [www.sg-accounting.co.uk](https://sg-accounting.co.uk). **Categories:** News --- ### [Autumn Statement 2016 More Information](https://sg-accounting.co.uk/blog/autumn-statement-2016-information/) **Published:** November 28, 2016 **Author:** Kerry Newman **Content:** Chancellor pledges post-Brexit economy ‘that works for everyone’ The new Chancellor of the Exchequer, Philip Hammond, acknowledged ‘sharp challenges ahead’ for the economy as he presented his first major fiscal statement, exactly five months after the UK’s historic vote to leave the European Union. The latest forecasts from the Office for Budget Responsibility confirmed an increase in borrowing, which is now forecast to reach £68.2bn this year. Economic growth is expected to slow over the next two years, initially rising marginally to 2.1% for 2016, but then reducing to 1.4% in 2017. Overall, the ‘Brexit effect’ is expected to impact on economic growth to the tune of 2.4%. Having paid tribute to his predecessor, Mr Hammond then proceeded to sweep away George Osborne’s fiscal targets, announcing a new draft Charter for Budget Responsibility. This replaces the aim of balancing the books by 2020 with a pledge to deliver a surplus ‘as early as practicable’ in the next Parliament, and an emphasis on allowing sufficient flexibility to build a resilient economy. The Chancellor proposes to do this by prioritising investment in UK infrastructure and innovation, and announced the creation of a new £23bn National Productivity Investment Fund (NPIF) which will provide additional funding in four areas: transport, digital communications, research and development, and housing. The Statement included a number of other significant measures for businesses, including confirmation that corporation tax will be reduced to 17% by 2020 as planned, together with the implementation of the business rates reduction package. In other announcements, from April 2017 employee and employer national insurance thresholds will be aligned, and salary sacrifice schemes will be scaled back, with most schemes being subject to the same tax as cash income, although some exemptions will apply. Emphasising the government’s stated commitment to low and middle income workers, the Chancellor announced that from April 2017 the Universal Credit taper rate will be reduced from 65p to 63p for every pound of net earnings. The National Living Wage and National Minimum Wage will also rise with effect from April 2017. The government’s plans to raise the income tax personal allowance to £12,500 and the higher rate income tax threshold to £50,000 by 2020/21 were also confirmed, while a new NS&I Investment Bond will be launched for savers. Other announcements included further measures to counter tax avoidance, an increase in insurance premium tax from 1 June 2017, and a freeze on fuel duty for the seventh consecutive year. In a final flourish, and marking a major change to policy-making processes, the Chancellor announced that his first Autumn Statement would also be his last. 2017 will see the final Spring Budget, as from that point on the main Budget will be held in the Autumn. Business measures **Corporation tax** It was confirmed that the corporation tax rate, currently 20%, will be 19% for the financial years beginning 1 April 2017, 1 April 2018 and 1 April 2019, and 17% for the financial year beginning 1 April 2020. **Rural rate relief** Rural rate relief will increase from 50% to 100% in April 2017. It is available to businesses in rural areas with a population under 3,000, where that business is the only village shop or post office with a rateable value of up to £8,500; or the only public house or petrol station with a rateable value of up to £12,500. **National insurance contributions (NICs)** The national insurance secondary (employer) threshold and the national insurance primary (employee) threshold will be aligned from 6 April 2017, meaning that both employees and employers will start paying national insurance on weekly earnings above £157. As announced at Budget 2016, Class 2 NICs will be abolished from April 2018. It has been confirmed that, following the abolition of Class 2 NICs, self-employed contributory benefit entitlement will be accessed through Class 3 and Class 4 NICs. All self-employed women will continue to be able to access the standard rate of Maternity Allowance. Self-employed people with profits below the Small Profits Limit will be able to access Contributory Employment and Support Allowance through Class 3 NICs. There will be provision to support self-employed individuals with low profits during the transition. **British Business Bank** The British Business Bank will invest an additional £400m in venture capital funds, in order to ‘unlock up to £1bn of new investment in innovative firms planning to scale up’. **Charge points for electric vehicles** Legislation will be introduced in Finance Bill 2017 to provide a 100% first-year allowance for expenditure incurred on electric charge-point equipment for electric vehicles. The measure will be backdated to have effect for expenditure incurred on or after 23 November 2016. It will expire on 31 March 2019 for corporation tax and 5 April 2019 for income tax purposes. **Annual Tax on Enveloped Dwellings (ATED)** The annual charges for the ATED will rise in line with inflation for the 2017/18 chargeable period. **Research and Development (R&D)** The National Productivity Investment Fund will provide an additional £4.7bn in R&D funding by 2020/21. Projects will include an Industrial Strategy Challenge Fund to support collaborations between business and the UK science base, and an increase in grant funding through Innovate UK. The government will also look at ways to build on the ‘above the line’ R&D tax credit, with the aim of further incentivising R&D. **Patent Box** The government will legislate in Finance Bill 2017 to add specific provisions to the Patent Box rules where R&D is undertaken collaboratively by two or more companies under a ‘cost sharing arrangement’. These will ensure that such companies are neither penalised nor able to gain an advantage under these rules by organising their R&D in this way. This will have effect for accounting periods commencing on or after 1 April 2017. Anti-avoidance **Strengthening sanctions and deterrents** The government will introduce a new penalty for any person who has enabled another person or business to use a tax avoidance arrangement that is later defeated by HMRC. The government will also remove the defence of having relied on non-independent advice as taking ‘reasonable care’ when considering penalties for any person or business that uses such arrangements. **Money Purchase Annual Allowance (MPAA)** Changes introduced in April 2015 gave individuals greater flexibility over how and when they take their pension savings. Once a person has accessed pension savings flexibly, if they wish to make any further contributions to a defined contribution pension, tax-relieved contributions are restricted to a special MPAA. Subject to consultation on the detail, the MPAA will be reduced from £10,000 to £4,000 from April 2017. **VAT Flat Rate Scheme** There will be a new 16.5% rate from 1 April 2017 for businesses with limited costs, such as many labour-only businesses. Anti-forestalling provisions have been introduced to prevent any business defined as a limited cost trader from continuing to use a lower flat rate beyond 1 April 2017. **VAT fraud** The Finance Bill 2017 will introduce a new penalty for participating in VAT fraud. It will be applied to businesses and company officers when they knew or should have known that their transactions were connected with VAT fraud. The new penalty will be a fixed rate penalty of 30% of the VAT due. **Disguised remuneration schemes** Previously announced changes intended to tackle the use of disguised remuneration schemes by employers and employees will be extended to include the self-employed. **Employee Shareholder Status (ESS)** The tax advantages linked to shares awarded under ESS will be abolished for arrangements entered into on, or after, 1 December 2016. The status itself will be closed to new arrangements at the next legislative opportunity. Personal measures **Personal allowance and higher rate threshold** The Chancellor confirmed that the personal allowance will rise to £11,500 and the higher rate threshold to £45,000 from 6 April 2017. He stated that the government will meet its commitment to raise the income tax personal allowance to £12,500 and the higher rate threshold to £50,000, by the end of this Parliament. Once the personal allowance reaches £12,500, it will then rise in line with the Consumer Prices Index (CPI). **NS&I Investment Bond** NS&I will offer a new three-year savings bond from Spring 2017. The indicative rate is 2.2% but this may be adjusted to reflect market conditions when the product is launched. The bond will be open to those aged 16 and over, subject to a minimum investment limit of £100 and a maximum investment limit of £3,000. **ISA limits** The annual subscription limit for Junior ISAs and Child Trust Funds will be uprated in line with CPI to £4,128. As previously announced, the ISA limit will rise from £15,240 to £20,000. Both of these changes take effect from 6 April 2017. **National Living Wage (NLW) and National Minimum Wage (NMW)** Following the recommendations of the Low Pay Commission, the government will increase the NLW to £7.50 from April 2017. The government will also accept all of their recommendations for the other NMW rates, which were last increased in October 2016. From April 2017 the increased rates will be as follows: - ‌£7.05 per hour for 21 to 24 year olds - ‌£5.60 per hour for 18 to 20 year olds - ‌£4.05 per hour for 16 to 17 year olds - £3.50 per hour for apprentices (under 19, or 19 and over in the first year of their apprenticeship). The government will invest to strengthen NMW enforcement. They will also provide additional support targeted at small businesses to help them to comply, and a campaign aimed at raising awareness amongst workers and employers regarding their rights and responsibilities. **Universal Credit taper** From April 2017, the taper rate that applies to earnings above the income threshold in Universal Credit will be reduced from 65% to 63%. **Pension scams** The government will publish a consultation on options to tackle pension scams, including banning cold calling in relation to pensions, giving firms greater powers to block suspicious transfers and making it harder for scammers to abuse ‘small self-administered schemes’. **Pay as You Earn Settlement Agreement (PSA) process** As announced at Budget 2016 and following consultation, the government will legislate in Finance Bill 2017 to simplify the process for applying for and agreeing PSAs. This will have effect in relation to agreements for the 2018/19 tax year and subsequent tax years. Transport and infrastructure **Fuel duty** The main rate of fuel duty for petrol and diesel will remain frozen for the seventh successive year at 57.95p per litre. **Company car tax** From 2020/21 new, lower bands will be introduced for the lowest CO2 emitting cars. The appropriate percentage for cars emitting greater than 90g CO2/km will rise by one percentage point. **Transport infrastructure investment** As part of the National Productivity Investment Fund (NPIF), transport infrastructure investment will include £1.1bn to reduce congestion and upgrade local roads and public transport, £220m to tackle road safety and congestion on Highways England roads and £27m to develop an expressway connecting Oxford and Cambridge. £450m will also be spent on trialling railway digital signalling technology. **Future transport technology** The NPIF will also provide £390m for future transport technology. This will include: £100m investment in testing infrastructure for driverless cars; £150m to provide at least 550 new electric and hydrogen buses, reduce the emissions of 1,500 existing buses and support taxis to become zero emission; and £80m to install more charging points for ultra-low emission vehicles. **Broadband and 5G networks** The government will invest over £1bn by 2020/21, including £740m through the NPIF, to support the roll out of full-fibre connections and future 5G communications. Measures will include a new 100% business rates relief for new full-fibre infrastructure for a five year period from 1 April 2017. **Infrastructure for devolved national governments** The devolved national governments will each receive additional funds which can be spent on infrastructure projects. There will be an increase of over £800m for the Scottish government, over £400m for the Welsh government and over £250m for the Northern Ireland Executive, with each devolved administration deciding where this money will be spent. **Flood defence** The government will invest £170m in flood defence and resilience measures. £20m of this investment will be for new flood defence schemes, £50m for rail resilience projects, including Dawlish, and £100m to improve the resilience of roads to flooding. **Housing** A new £2.3bn Housing Infrastructure Fund will be used for projects such as roads and water connections that will support the construction of up to 100,000 new homes in the areas designated to be most at need of new housing. An additional £1.4bn will be used to provide 40,000 new affordable homes, including some for shared ownership and some for affordable rent. A further £1.7bn will be used to accelerate the construction of new homes on public sector land. The government will also fund a regional pilot of the Right to Buy for housing association tenants, under which more than 3,000 tenants will be able to buy their own home with Right to Buy discounts. Other measures **Insurance premium tax (IPT)** The standard rate of IPT will rise from 10% to 12% from 1 June 2017. **Letting agent fees** The Department for Communities and Local Government will consult ahead of bringing forward legislation to ban letting agents’ fees charged to tenants. **LIBOR banking fines** The government has committed a further £102m of banking fines over the next four years to support Armed Forces and Emergency Services charities and other related good causes. **Museums and galleries tax relief** The government will broaden the scope of the museums and galleries tax relief announced at Budget 2016 to include permanent exhibitions. The rates of relief will be set at 25% for touring exhibitions and 20% for non-touring exhibitions and the relief will be capped at £500,000 of qualifying expenditure per exhibition. The relief will take effect from 1 April 2017 and will be reviewed in 2020. **Investing in culture** The Chancellor announced over £10m to support culture and heritage projects across the UK. **Prison safety and reform** The government will provide up to £500m of additional funding to the Ministry of Justice. As part of the Prison Safety and Reform white paper, this will enable the recruitment of 2,500 extra prison officers. It will also fund wider reforms to the justice system. **Autumn Statement abolishes Autumn Statements** Chancellor Philip Hammond surprised the House by announcing that his first Autumn Statement would also be his last – with a major change to the way fiscal events are scheduled. Following the Spring 2017 Budget and Finance Bill, Budgets will in future be delivered in the Autumn, with the first one taking place in Autumn 2017. The Office for Budget Responsibility will produce a Spring forecast from 2018 and the Chancellor will make a new Spring Statement responding to that forecast. Profile: The new Chancellor **Who:** Philip Hammond, Chancellor of the Exchequer; Conservative MP for Runnymede and Weybridge **Age:** 60 **Background:** A former company director, Philip Hammond entered Parliament in 1997 and was promoted into the Shadow Cabinet by David Cameron in 2005. He then worked under George Osborne as Shadow Chief Secretary to the Treasury. In the Coalition government he held increasingly senior Cabinet positions, progressing from Secretary of State for Transport, to Defence, and finally Foreign and Commonwealth Affairs. When Theresa May succeeded Cameron as Prime Minister in July 2016, she quickly appointed Hammond as Chancellor of the Exchequer in place of Osborne. **Political views:** Although considered to be broadly Eurosceptic prior to the referendum, Hammond campaigned for Britain to remain in the EU. As Chancellor, he indicated early on that he would emphasise investment in infrastructure and housing over his predecessor’s deficit reduction targets. The Autumn Statement is his first major announcement in the role. What they said… ‘The figures speak for themselves. Growth down, wage growth down, business investment down, and their own deficit target failed.’ **Shadow Chancellor John McDonnell** ‘Reducing the frequency of fiscal events along with the commitment to stick with the tax roadmap will provide stability for businesses. Importantly, the new fiscal rules provide the government with welcome flexibility, while remaining prudent in uncertain times.’ **Carolyn Fairbairn, Director General of the Confederation of British Industry** ‘The official figures have revealed a £220bn Brexit black hole – hundreds of billions taken out of our economy when we need it most. Given how bad the outlook is, it’s no wonder the Chancellor doesn’t want to have to do another Autumn Statement.’ **Tim Farron, Leader of the Liberal Democrats** ‘The Chancellor’s strong focus on the growth requirements of our cities, regions and nations will not go unnoticed in business communities across the UK.’ **Adam Marshall, Director General of the British Chambers of Commerce** ‘Today’s OBR forecast shows that the average annual wage will be £1,000 lower in 2020 than predicted at the Budget. And this is on top of wages still having not recovered to their 2007 levels.’ **Frances O’Grady, General Secretary of the Trades Union Congress** ‘We resolve today to confront [our] challenges head on. To prepare our country to seize the opportunities ahead. And in doing so, to build an economy that works for everyone… and where every corner of this United Kingdom is part of our national success.’ **Chancellor Philip Hammond** **23 November 2016** This publication was prepared immediately following the Chancellor’s Autumn Statement based on official press releases and supporting documentation. The publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for any loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. **Categories:** News --- ### [Dealing with distractions](https://sg-accounting.co.uk/blog/dealing-with-distractions/) **Published:** May 17, 2017 **Author:** Kerry Newman **Excerpt:** Research suggests that when we are distracted from a piece of work it takes between 10 and 15 minutes to get back to that point of focus afterwards. **Content:** Research suggests that when we are distracted from a piece of work it takes between 10 and 15 minutes to get back to that point of focus afterwards. It is therefore not surprising that our scheduled work tasks are not being completed, when we are being distracted many times each day. What can we do to manage our external distractions? 1. **Schedule them** Receiving emails, phone calls and instant messages are a huge distraction for many. Consider allocating particular times of the day to deal with these. You could check your emails for example, in the morning, after lunch and at the end of the day. Is it possible for you to use voicemail for incoming calls or ask someone else to take messages when appropriate? If the auto alert on your emails is distracting you, turn it off. By not reading and replying to emails immediately, you are allowing yourself to focus on the task in hand. 2. **Know your ‘optimum focus’ time** When scheduling tasks, plan your work around your energy levels. If your optimum focus time is in the morning, consider allocating your most challenging work to a morning slot. Working from home is a fantastic option to avoid workplace distractions but this may not be feasible for you. Could you work at home for a couple of hours at the start/end of the day to ensure your optimum focus time is being used effectively? You do of course need to take into account the distractions that may be present at home. 3. **Avoid multitasking** Where you have high focus tasks scheduled, try and focus on one task at a time. It is more effective in the long run. Schedule your day in terms of the order you will complete your tasks and agree with yourself beforehand the level of completeness required for each task before you allow yourself to move onto the next. Certain low focus tasks can clearly be multitasked such as drinking your coffee and reading an email but can the same be said for replying to a client email whilst you are in a meeting? 4. **How about internal distractions?** These are interruptions that you are effectively causing yourself and some of the external distractions already mentioned may actually be internal distractions for you. Internal distractions include boredom (causing you to flit from one task to another or surf the internet) worry, self-doubt, procrastination and wanting to try and fix everybody else’s problems. None of these are helping you achieve your planned work schedule. It’s useful to take a step back and think about why you are allowing these distractions to interrupt you. The key with internal distractions is goal setting. Before going home each evening, consider what you would like to achieve the following day, and allot time to each task. Focus on two or three important tasks but be realistic with what you can achieve. Remember, if you are distracted by the same thing daily, and it isn’t possible to eliminate it, minimise it or delegate it to somebody else, it’s probably not a distraction and actually a task that should have been scheduled the evening before. **Categories:** New to contracting, Running your business --- ### [Inheritance tax receipts continue to rise](https://sg-accounting.co.uk/blog/inheritance-tax-receipts-continue-rise/) **Published:** May 17, 2017 **Author:** Kerry Newman **Excerpt:** Latest figures from HMRC reveal a 22% increase in inheritance tax (IHT) receipts in the 2015/16 tax year. This is a significant uplift from the average 12% annual increases that have been experienced since 2010. **Content:** Latest figures from HMRC reveal a 22% increase in inheritance tax (IHT) receipts in the 2015/16 tax year. This is a significant uplift from the average 12% annual increases that have been experienced since 2010. There are several factors which have contributed to the latest increase including rising property prices and the static IHT nil rate band. The nil rate band has remained at £325,000 since April 2009 and is set to remain frozen at this amount until April 2021. Clearly, the data reveals the importance of IHT planning to mitigate the impact of the tax on death. If the assets on death include residential property which has, at some point, been a residence of the deceased, a new relief may help to remove or reduce an IHT tax liability. The new relief – the ‘additional main residence nil rate band’ – is being introduced for deaths on or after 6 April 2017. The amount of relief is being phased in over four years; starting at £100,000 in the first year and rising to £175,000 for 2020/21. For many married couples and civil directors the relief is effectively doubled as each individual has a main nil rate band and each will potentially benefit from the additional band. The HMRC data reveals that, for those with estates in the range £300,000 to £400,000, a significant part of the estate consists of a main residence and thus the relief will prove effective to remove an IHT liability. For larger estates, the HMRC data shows an increasing proportion of the estate consists of shares and securities. Traditional planning to mitigate IHT for these assets, and widely used by individuals, include: - Claiming the exemption on the transfer of assets to a spouse or civil partner. This is the most common exemption to be used. - Gifting assets to charity. A charitable gift removes the gift from the value of the estate and also may reduce the rate of IHT on the remaining chargeable parts of the estate from 40% to 36% if, broadly, at least 10% of the net estate is given to charities - Business Property Relief. Assets qualifying for this relief will bear no IHT. Business property includes shares in unquoted companies and therefore many shares listed on the Alternative Investment Market potentially qualify for this relief. It is also relevant to note in respect of larger estates that if the net value of the estate is above £2 million, the additional nil rate band is tapered away by £1 for every £2 that the net value exceeds that amount. For many individuals, the additional nil rate band will be important but you need to ensure that the relief will be available. If wills have been written some time ago, they may result in the tax advantages not being fully utilised. Please do contact us if you want advice on this matter. **Categories:** News --- ### [Autumn Budget 2017](https://sg-accounting.co.uk/blog/autumn-budget-2017/) **Published:** November 22, 2017 **Author:** Kerry Newman **Content:** Philip Hammond delivered his Budget today after much speculation. All in all it was a pretty underwhelming budget speech and “red book”. All those rumours of immediate roll out of the public sector IR35 reforms to the private sector, reduction in VAT registration threshold, stamp duty increases and dividend tax changes all turned out to be just speculation! Overall it’s more good news than bad for contractors. We’ve summarised some key points relevant to contractors below: - A consultation is planned for 2018 into how IR35 compliance can be improved in the private sector. Our view is that Mr Hammond has recognised the problems that have arisen (and is probably still anticipating problems in the future) since the new off payroll rules in the public sector and realise there would be more work to do before even considering a roll out to the private sector. Let’s hope the Chancellor really does carry out the “careful consideration” that is promised and understands that the flexible workforce plays a key part in a productive Britain. With production downgraded by up to 25% over the coming years it’s even more important. - VAT registration threshold remains at £85,000. - Personal allowance is to be raised to £11,850 from April 2018. - Higher rate tax threshold will be raised to £46,350 from April 2018 – this will mean another £1,350 of income before hitting higher rate tax next year. - Stamp duty abolished for first time buyers below £300,000 – good news for anyone looking to get on the property ladder. - Annual ISA limit frozen at £20,000 for 2018/2019. You will still be able to contribute £20,000 per year into an ISA sheltering investments and cash from tax on interest, dividends and gains. - The tax free dividend allowance will be reduced from £5,000 to £2,000 from April 2018. This will be more than offset by the reduction in Corporation Tax to 18% and increase in higher rate band for most. We’ll be looking over the finer detail for the rest of the day so keep an eye on our [blog page](https://sg-accounting.co.uk/blog/) tomorrow for a more in depth analysis. **Categories:** News --- ### [Detailed Autumn Budget Report 2017](https://sg-accounting.co.uk/blog/detailed-autumn-budget-report-2017/) **Published:** November 23, 2017 **Author:** Kerry Newman **Content:** **This Report, which was written immediately after the Chancellor of the Exchequer delivered his Budget Speech, is intended to provide an overview of the latest announcements and recent measures most likely to affect you or your business.** The 2017 Autumn Budget represents the first step in the government’s new Budget regime, which sees the main Budget now being presented in the Autumn, to be followed by a Spring Statement the following year. We can help to ensure that your financial plans remain effective, even as your personal and business circumstances change. We will work alongside you to help you achieve a rewarding and financially secure future. **How to make the most of our services** The 2018/19 Tax Calendar details many of the important dates and deadlines for the coming tax year. Do contact us as soon as possible to discuss any action you may be considering, and to review your long-term plans. We always welcome the opportunity to help. *Please note: while most taxation changes take effect from the start of the new financial year, or tax year, some may not take effect until 2019, or later. Where relevant, details of these changes have been included in this Report.* **Hammond heralds vision of an ‘outward looking, free-trading nation’** Chancellor Philip Hammond’s first Autumn Budget was delivered against a backdrop of economic and political uncertainty, fuelled partly by the ongoing Brexit process. Acknowledging that the UK has entered a ‘critical phase’ of negotiations, the Chancellor set out his vision of a ‘new relationship’ with the European Union – though he was keen to emphasise the need to prepare for ‘every possible Brexit outcome’, announcing that £3bn had been set aside for Brexit preparations. While asserting that the economy ‘continues to confound those who talk it down’, the Chancellor revealed that the Office for Budget Responsibility has revised down UK economic growth for the next five years, with the economy expected to grow by 1.5% in 2017. Debt is also expected to reach a peak this year, reducing gradually thereafter as a share of GDP, while borrowing forecasts have also been revised downwards. Technology and housing proved to be a key focus of the speech, with the Chancellor announcing a package of support for electric vehicles, including £400m for new charging points, and a £44bn investment fund to support the government’s target of building an average of 300,000 new homes every year, over the next five years. The government will also make changes to the planning system to ‘encourage better use of land in cities and towns’. There was also some good news for first-time buyers, as the Chancellor revealed that any seeking to buy a property worth up to £300,000 will be exempt from paying Stamp Duty Land Tax with immediate effect. Meanwhile, the income tax personal allowance will increase to £11,850 from April 2018, with the higher rate threshold rising to £34,500. Although making a feature of his resistance to reducing the VAT registration threshold, the Chancellor did address the issue of business rates, announcing that firms being affected by the so-called ‘staircase tax’ could apply to have their bills recalculated and backdated, and that future revaluations will take place every three years. Finally, entering at least partially into the festive spirit, the Chancellor announced that duty on most alcoholic drinks will be frozen, although a new band of duty will be introduced in 2019 for certain higher strength ciders. **Budget Highlights** **Stamp Duty Land Tax abolished for most first-time buyers** **Personal allowance increasing to £11,850** **Business rates to rise by CPI inflation from April 2018** **VAT registration threshold frozen for two years** **RDEC tax credit increasing to 12% from January 2018** **National Living Wage to rise to £7.83** **Increase in VED for the most polluting diesel cars** Business tax and investment incentives **Corporation tax** Corporation tax rates are as follows: | **Financial year from** | **1 April 2017** | **1 April 2018** | **1 April 2019** | |---|---|---|---| | Corporation tax rate | 19% | 19% | 19% | As previously announced, the corporation tax rate is set to reduce to 17% from 1 April 2020. **Indexation allowance** For disposals of capital assets on or after 1 January 2018, the indexation allowance that is applied in order to determine the amount of the chargeable gain will be calculated up to December 2017, irrespective of the date of disposal of the asset. **Research & Development Expenditure Credit (RDEC)** The rate of RDEC is to increase from 11% to 12%. This will have effect for expenditure incurred on or after 1 January 2018. **Knowledge-intensive companies (KICs)** The annual limit for individuals investing in KICs under the Enterprise Investment Scheme (EIS) will be increased to £2m, provided that anything above £1m is invested in KICs. In addition, the annual EIS and Venture Capital Trust (VCT) limit on the amount of tax-advantaged investments a KIC may receive will be increased to £10m. The permitted maximum age rules will also be amended to allow a KIC to use the date from which its annual turnover exceeded £200,000, instead of the date of its first commercial sale, when determining the date from which the end of the initial investing period is calculated. For EIS the changes will apply to shares issued on or after 6 April 2018 and for VCTs the changes will apply to new qualifying investments made on or after 6 April 2018. **Non-UK resident companies** Legislation will be introduced so that non-UK resident companies that carry on a UK property business or have other UK property income will be charged to corporation tax, rather than being charged to income tax as at present. A non-UK resident company that has chargeable gains on the disposal of UK residential property will also be charged to corporation tax, instead of capital gains tax as at present. The change will have effect on and after 6 April 2020. **Capital allowances** The 100% first year allowance for businesses purchasing zero-emission goods vehicles or gas refuelling equipment is to be extended to 31 March 2021 for corporation tax and to 5 April 2021 for income tax. **First Year Tax Credits (FYTC)** The FYTC scheme will be extended until 31 March 2023 and the rate of eligible claims will be set at two-thirds of the corporation tax rate. This will come into effect on 1 April 2018. **Depreciatory transactions** Legislation will be introduced to remove the time limit of six years within which companies must adjust for any depreciatory transactions when claiming a capital loss on disposal of shares in a group company. This will have effect for disposals of shares in or securities of a company made on or after 22 November 2017. **Royalties withholding tax** The government will publish a consultation on 1 December 2017 on the design of rules expanding the circumstances in which a royalty payment to persons not resident in the UK has a liability to income tax. The changes will have effect from April 2019. **Subsistence** Legislation is to be introduced so that employers will no longer be required to check receipts when making payments to employees for subsistence using benchmark scale rates. This applies to standard meal allowances paid in respect of qualifying travel and the overseas scale rates. Employers will only be asked to ensure that employees are undertaking qualifying travel. This will have effect from April 2019. Abolition of receipt checking does not apply to amounts agreed under bespoke scale rates or industry wide rates. **Employer-provided electricity for an electric car** The government will legislate to exempt employer-provided electricity from being taxed as a benefit in kind from April 2018. This will apply to electricity provided in workplace charging points for electric or hybrid cars owned by employees. **Business rates** Business rates will switch from being increased by RPI to being increased by CPI from April 2018, two years earlier than originally planned. Business rates revaluations will take place every three years, rather than every five years, starting after the next revaluation, currently due in 2022. The government will also legislate retrospectively to address the so-called ‘staircase tax’. Affected businesses will be able to ask the Valuation Office Agency to recalculate valuations so that bills are based on previous practice, backdated to April 2010. The £1,000 business rate discount for public houses with a rateable value of up to £100,000, subject to state aid limits for businesses with multiple properties, will continue for one year from 1 April 2018. National insurance contributions (NICs) | **2018/19** | **Employee (primary)** | **Employer (secondary)** | |---|---|---| | Class 1 | | | | Payable on weekly earnings of: | | | | Below £116 (lower earnings limit) | Nil | – | | £116 – £162 (primary threshold) | \*0% | – | | Up to £162 (secondary threshold) | – | Nil | | Above £162 | – | 13.8% | | £162.01 – £892 (upper earnings limit) | \*\*12% | – | | £162.01 – £892 (under 21s and apprentices under 25) | – | 0% | | Above £892 | \*\*2% | – | \*No NICs are actually payable but notional Class 1 NIC is deemed to have been paid; this protects contributory benefit entitlement. \*\*Over State Pension age, the employee contribution is generally nil. | **Employment Allowance** | | up to £3,000 (per year) | |---|---|---| | **Class 1A** | On relevant benefits | 13.8% | | **Class 2** | Self-employed | £2.95 per week | | | Small profits threshold | £6,205 per annum | | **Class 3** | Voluntary | £14.65 per week | | **Class 4** | Self-employed on annual profits | | | | £8,424 – £46,350 | \*9% | | | Excess over £46,350 | \*2% | \*Exemption applies if State Pension age is reached by 6 April 2018. In a change to the date originally announced, Class 2 NICs are set to be abolished from April 2019. As previously announced, the government will no longer proceed with an increase to the main rate of Class 4 NICs from 9% to 10% in April 2018, and to 11% in April 2019. National Minimum Wage and National Living Wage The government has aligned the National Minimum Wage and National Living Wage cycles so that any increases in rates now occur in April each year. The rates applying from 1 April 2018 are outlined below. | | **Apprentices\*** | **16 and 17** | **18 – 20** | **21 – 24** | **25 and over** | |---|---|---|---|---|---| | National Minimum Wage | £3.70 | £4.20 | £5.90 | £7.38 | – | | National Living Wage | – | – | – | – | £7.83 | \*Under 19, or 19 or over and in the first year of their apprenticeship. Tax and travel **Car and fuel benefits** The taxable petrol and diesel car benefit is based on the car’s CO2 emissions. It is calculated using the car’s UK list price and applying the ‘appropriate percentage’, as shown in the table below. In the Autumn Budget the Chancellor announced that the diesel supplement will be increased from 3% to 4% from 6 April 2018, but removed altogether for diesel cars which are certified to the Real Driving Emissions 2 (RDE2) standard. The car fuel benefit is calculated by applying the same percentages to the fuel benefit charge multiplier, which for 2018/19 is £23,400. | CO2 emissions | Appropriate percentage | |---|---| | (g/km) | Petrol % | Diesel % | | 0 – 50 | 13 | 17 | | 51 – 75 | 16 | 20 | | 76 – 94 | 19 | 23 | | 95 – 99 | 20 | 24 | | 100 – 104 | 21 | 25 | | 105 – 109 | 22 | 26 | | 110 – 114 | 23 | 27 | | 115 – 119 | 24 | 28 | | 120 – 124 | 25 | 29 | | 125 – 129 | 26 | 30 | | 130 – 134 | 27 | 31 | | 135 – 139 | 28 | 32 | | 140 – 144 | 29 | 33 | | 145 – 149 | 30 | 34 | | 150 – 154 | 31 | 35 | | 155 – 159 | 32 | 36 | | 160 – 164 | 33 | 37 | | 165 – 169 | 34 | | 170 – 174 | 35 | | 175 – 179 | 36 | | 180 and above | 37 | **VAT on fuel for private use in cars** Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation charge. **Company vans** The taxable benefit for the unrestricted private use of vans is £3,350 for 2018/19. There is a further £633 taxable benefit if the employer provides fuel for private travel. | **Van and fuel charge** | **Van £** | **Fuel £** | **Total £** | |---|---|---|---| | Tax (20% taxpayer) | 670.00 | 126.60 | 796.60 | | Tax (40% taxpayer) | 1,340.00 | 253.20 | 1,593.20 | | Tax (45% taxpayer) | 1,507.50 | 284.85 | 1,792.35 | | Employer’s Class 1A NICs | 462.30 | 87.35 | 549.65 | The benefit charge for zero emission vans for 2018/19 is 20% of the standard benefit charge. There is no fuel benefit for such vans. **Mileage rates** Changes to the HMRC business mileage rates are announced from time to time. The fuel only advisory rates below relate to company cars only and apply from 1 September 2017. | **Vehicle** | **First 10,000 miles** | **Thereafter** | **Car – fuel only advisory rates Engine capacity** | **Petrol** | **Diesel** | **LPG** | |---|---|---|---|---|---|---| | Car/van | 45p | 25p | 1400cc or less | 11p | 9p | 7p | | Motorcycle | 24p | 24p | 1401cc to 1600cc | 13p | 9p | 8p | | Bicycle | 20p | 20p | 1601cc to 2000cc | 13p | 11p | 8p | | | | | Over 2000cc | 21p | 12p | 13p | **Plug-in grants** Motorists (private or business) purchasing new qualifying ultra-low emission cars can receive a grant of 35% towards the cost of the vehicle, up to a maximum of either £2,500 or £4,500 depending on the model. The scheme also covers new qualifying ultra-low emission vans, where the available grant will be 20% towards the cost of the vehicle, up to a maximum of £8,000. Vehicles with CO2 emissions of 75 g/km or less, including electric, plug-in hybrid and hydrogen-fuelled cars, are potentially eligible for the subsidy. There are strict criteria to be met before specific vehicles can be confirmed as eligible under the rules of the scheme. **Vehicle Excise Duty (VED) rates** **VED bands and rates from 1 April 2018 for cars first registered on or after 1 April 2017** For the first year this is based on CO2 emissions as set out in the table below. However, in the Autumn Budget it was announced that new diesel vehicles registered after **1 April 2018** that do not meet the RDE2 standard will be charged a supplement on their First Year Rate to the effect of moving up by one VED band. After the first year, all vehicles with zero emissions will be exempt from the standard rate of vehicle tax, and all other petrol or diesel vehicles will pay a standard rate of £140 a year. An additional rate will be added to the vehicle tax for all new vehicles with a list price of over £40,000 (including zero emission vehicles). This additional rate of £310 will be payable each year for five years from the end of the first vehicle licence. After the five year period the standard rate will apply. Alternative fuel vehicles continue to receive a £10 reduction on the standard and first year rates. | CO2 emissions (g/km) | First year rate | |---|---| | 0 | £0 | | 1 – 50 | £10 | | 51 – 75 | £25 | | 76 – 90 | £105 | | 91 – 100 | £125 | | 101 – 110 | £145 | | 111 – 130 | £165 | | 131 – 150 | £205 | | 151 – 170 | £515 | | 171 – 190 | £830 | | 191 – 225 | £1,240 | | 226 – 255 | £1,760 | | Over 255 | £2,070 | **Standard rates which apply from 1 April 2018 for cars registered from 1 March 2001 to 31 March 2017** | VED Band | CO2 emissions (g/km) | Standard rate\* | |---|---|---| | A | Up to 100 | £0 | | B | 101-110 | £20 | | C | 111-120 | £30 | | D | 121-130 | £120 | | E | 131-140 | £140 | | F | 141-150 | £155 | | G | 151-165 | £195 | | H | 166-175 | £230 | | I | 176-185 | £250 | | J | 186-200 | £290 | | K\*\* | 201-225 | £315 | | L | 226-255 | £540 | | M | Over 255 | £555 | \*Standard rate is reduced by £10 for alternative fuel vehicles with CO2 emissions above 100 g/km. \*\*Includes cars emitting over 225 g/km that were registered before 23 March 2006. Income tax and personal savings **Income tax** | | | **2018/19** | **2017/18** | |---|---|---|---| | **Basic rate band – income up to** | | †£34,500 | †£33,500 | | Starting rate for savings income | | \*0% | \*0% | | Basic rate | | 20% | 20% | | Dividend ordinary rate | | \*\*7.5% | \*\*7.5% | | **Higher rate – income between** | | †£34,501 – £150,000 | †£33,501 – £150,000 | | Higher rate | | 40% | 40% | | Dividend upper rate | | \*\*32.5% | \*\*32.5% | | **Additional rate – income over** | | £150,000 | £150,000 | | Additional rate | | 45% | 45% | | Dividend additional rate | | \*\*38.1% | \*\*38.1% | | **Starting rate limit (savings income)** | | \*£5,000 | \*£5,000 | †For Scottish taxpayers only the limit for 2017/18 is £31,500. The Scottish government is set to introduce further changes to the income tax rates and bands for Scottish taxpayers for 2018/19. \*If an individual’s taxable non-savings income exceeds starting rate limit, then starting rate limit for savings will not be available for savings income. £1,000 of savings income for basic rate taxpayers (£500 higher rate) may be tax-free. \*\*The tax-free dividend allowance is set to reduce from £5,000 to £2,000 from 6 April 2018. **Personal allowances | | **2018/19** | **2017/18** | |---|---|---| | **Personal Allowance (PA)****Married couple’s allowance (MCA)** (relief given at 10%) Either partner born before 6 April 1935 **Transferable Tax Allowance (‘Marriage Allowance’)** For certain married couples (relief given at 20%) | £11,850 \*£8,695 £1,185 | £11,500 \*£8,445 £1,150 | \*Allowances are reduced by £1 for every £2 that adjusted net income exceeds £28,900 (2017/18 £28,000) to a minimum MCA of £3,360 (2017/18 £3,260). Where adjusted net income exceeds £100,000 (2017/18 £100,000), PA is reduced in the same way until it is nil regardless of the individual’s date of birth. **Marriage Allowance: allowing claims on behalf of deceased directors** The government will legislate to allow Marriage Allowance claims on behalf of deceased spouses and civil directors, and for the claim to be backdated for up to four years where the entitlement conditions are met. The changes will have effect on and after 29 November 2017. **Investment tax reliefs** | | **2018/19** | **2017/18** | |---|---|---| | Venture Capital Trust up to | £200,000 | £200,000 | | Enterprise Investment Scheme up to\* | £1,000,000 | £1,000,000 | | Seed Enterprise Investment Scheme up to | £100,000 | £100,000 | | Social Investment Tax Relief up to | £1,000,000 | £1,000,000 | \*For 2018/19 the annual limit is increased to £2m, provided that anything above £1m is invested in knowledge-intensive companies. **Individual Savings Accounts (ISAs)** Individuals can invest in any combination of cash or stocks and shares up to the overall annual ISA subscription limit. However, a saver may only pay into a maximum of one Cash ISA, one Stocks and Shares ISA, one Innovative Finance ISA and one Lifetime ISA. The Lifetime ISA, which came into effect on 6 April 2017, is available to adults aged between 18 and 40 to save towards retirement or for a first home in the UK worth up to £450,000. Those eligible can deposit up to £4,000 each tax year and will receive a 25% bonus from the government on savings put into the account before their 50th birthday. Various rules and restrictions apply. The ISA subscription limit for 2018/19 will remain unchanged at £20,000, of which £4,000 can be saved into a Lifetime ISA. The annual subscription limit for Junior ISAs and Child Trust Funds for the tax year 2018/19 will be uprated in line with CPI from £4,128 to £4,260. **Pensions Lifetime Allowance (LTA)** The LTA represents the maximum amount that an individual can save into their pension pot and still benefit from tax relief at their marginal rate. The LTA will increase in line with CPI, rising to £1,030,000 for the tax year 2018/19. Capital taxes **Inheritance tax** Inheritance tax is currently charged at 40% on the proportion of an individual’s estate exceeding the ‘nil-rate band’ of £325,000. Married couples and registered civil directors can already pass any unused nil-rate band to one another on death. A new residence nil-rate band (RNRB) now applies in addition to the nil-rate band, allowing a ‘family home’ to be passed wholly or partially tax-free on death to direct descendants such as a child or grandchild. A step-child, adopted child or fostered child is also regarded as a direct descendant. The RNRB rates are set as follows: | **2017/18** | £100,000 | |---|---| | **2018/19** | £125,000 | | **2019/20** | £150,000 | | **2020/21** | £175,000 | The RNRB can only be used in respect of one residential property. The property does not have to be the main family home, although it must, at some point, have been a residence of the deceased. There is a tapered withdrawal of the RNRB for estates valued at more than £2m, at a withdrawal rate of £1 for every £2 over this threshold. **Capital gains tax (CGT)** CGT is payable on the profit made when you sell or otherwise dispose of an asset. The rates for 2018/19 are: | **On chargeable gains** | **2018/19** | |---|---| | Total taxable income and gains | | | Up to higher rate threshold | 10% | | From higher rate threshold | 20% | | Trust rate | 20% | Higher rates (18%/28%) may apply to the disposal of certain residential property and carried interest. Annual exempt amount for 2018/19 – individuals £11,700 and most trustees £5,850. **CGT payment window** The introduction of the 30-day payment window for gains on residential property disposals will be deferred until April 2020. **Taxation of carried interest** The government will amend legislation to ensure that asset managers receiving carried interest pay CGT on their full economic gain. The changes will remove the special treatment afforded to carried interest that arises in connection with disposals of assets before certain dates in 2015. The changes will have effect on and after 22 November 2017. **Entrepreneurs’ relief** The government will consult in spring 2018 on how access to the relief might be given to entrepreneurs whose holding in their company is reduced below the normal 5% qualifying level as a result of raising funds for commercial purposes by means of issues of new shares. **Taxing non-residents’ gains on immovable property** The government has published a consultation on taxing non-residents’ gains on immovable property. This measure will broaden the UK’s tax base to include disposals of UK commercial property by non-residents, both directly and indirectly, and will bring all companies into charge on disposals of residential property, and all persons into charge on indirect disposals of residential property. The changes will have effect on and after 1 April 2019 for companies, and on and after 6 April 2019 for those in charge to CGT. An anti-forestalling measure to support this reform will have effect on and after 22 November 2017. **Offshore trusts** New anti-avoidance rules will be introduced relating to the taxation of income and gains accruing to offshore trusts. This measure ensures that payments from an offshore trust intended for a UK resident individual do not escape tax when they are made via an overseas beneficiary or a remittance basis user. Following consultation, minor changes have been made to the legislation, including to ensure that the onward gift rules can apply if the close family member rule applies, to clarify the position in the year of the settlor’s death and in relation to onward gifts to multiple recipients. The changes will have effect on and after 6 April 2018. Making Tax Digital The government is phasing in its landmark Making Tax Digital (MTD) initiative, which will see the introduction of a fully digital tax system, with businesses and individuals being required to register, file, pay and update their information via a secure online tax account. The new system was originally intended to be implemented between 2018 and 2020. However, following concerns raised by business and industry experts, the government put forward a revised timescale for its introduction. Under the new timetable, from 1 April 2019 businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. Keeping digital records and making quarterly updates will not be mandatory for taxes other than VAT before April 2020, although businesses below the VAT threshold which have voluntarily registered for VAT can opt to join the scheme. The government plans to make the necessary regulations available no later than April 2018. HMRC will be piloting MTD for VAT for the rest of 2017, with wider live piloting planned from Spring 2018. Value Added Tax (VAT) | The rates for 2018/19 are as follows: **From** | **1 April 2018** | |---|---| | Standard rate | 20% | | VAT fraction | 1/6 | | Reduced rate | 5% | | **Turnover limits** | | Registration – last 12 months or next 30 days over | £85,000 | | Deregistration – next 12 months under | £83,000 | | Annual and Cash Accounting Schemes | £1,350,000 | | Flat Rate Scheme | £150,000 | The VAT registration and deregistration thresholds will not be uprated for a period of two years. The two year period ends on 31 March 2020. **Online VAT fraud** The government will legislate to extend HMRC’s powers to hold online marketplaces jointly and severally liable for the unpaid VAT of overseas traders on their platforms to include all (including UK) traders. Online marketplaces will be required to ensure that VAT numbers displayed for businesses operating on their website are valid. They will also be required to display a valid VAT number when they are provided with one by a business operating on their platform. Duties **Alcohol and tobacco duties** All alcohol duty rates will be frozen. The government intends to introduce a new duty band in 2019 for still cider of a strength of at least 6.9% but not exceeding 7.5% alcohol by volume. The duty rate on all tobacco products will continue to increase by 2% above RPI inflation each year until the end of the Parliament. Hand-rolling tobacco will rise by an additional 1% to 3% above RPI inflation this year. The new tobacco duty rates have effect from 6pm on 22 November 2017. **Air Passenger Duty (APD)** The short-haul rates of APD for the tax year 2019/20 will remain at their present levels. The long-haul reduced rate for the tax year 2019/20 will be frozen at the 2018/19 level; the standard rate will increase by £16; and the higher rate will increase by £47. From April 2018 the Scottish government will replace APD with Air Departure Tax (ADT). **Fuel duty** Fuel duty rates will remain frozen for the 2018/19 tax year. **Stamp Duty Land Tax (SDLT)** From 22 November 2017 first-time buyers paying £300,000 or less for a residential property will pay no SDLT. First-time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price in excess of £300,000. A first-time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the UK or anywhere else in the world, and who intend to occupy the property as their main residence. First-time buyers purchasing property for more than £500,000 will not be entitled to any relief and will pay SDLT at the normal rates. This measure does not apply in Scotland. It will apply in Wales until 1 April 2018, when SDLT will be devolved to Wales. **Single-use plastics waste** The government will launch a call for evidence in early 2018 on how the tax system or charges could help to reduce the amount of single-use plastics waste. Other measures announced **Help to Buy Equity Loan** It was confirmed in the Budget that a further £10bn will be allocated to the Help to Buy Equity Loan scheme, which is designed to help people to buy a home with a 5% deposit. **Next generation vehicles** To support the transition to zero emission vehicles, the government will invest £200m, to be matched by private investment, into a new £400m Charging Investment Infrastructure Fund. £100m will be provided to guarantee continuation of the Plug-In Car Grant to 2020 to help consumers with the cost of purchasing a new battery electric vehicle. The government has stated that it ‘wants to see fully self-driving cars, without a human operator, on UK roads by 2021’. The National Infrastructure Commission will launch a new innovation prize to determine how future roadbuilding should adapt to support self-driving cars. **Transport funding in England** £1.7bn will be allocated to improving transport in English cities. Half will be given to Combined Authorities with Mayors, and the rest allocated by a competition. An extra £337m will go towards a fleet of new trains on the Tyne & Wear Metro. An extra £6m will go towards the Midlands Connect motorway and rail projects. Transport links along the Cambridge – Milton Keynes – Oxford corridor will also be improved. **Education and skills** Schools will get £600 for every extra pupil who takes A-Level or Core Maths and £350,000 of extra funding a year will be given to every specialist maths school that is set up. £34m will be allocated to teaching construction skills. £30m will go towards digital courses using artificial intelligence. A National Retraining Scheme will be launched with the aim of helping people to acquire new skills. It will be overseen by the government, the Trades Union Congress and the Confederation of British Industry. They will decide on other areas of the economy where new skills and training courses are needed. What they said… ‘I report today on an economy that continues to grow, continues to create more jobs than ever before and continues to confound those who seek to talk it down.’ **Philip Hammond, Chancellor of the Exchequer** ‘We have had the rhetoric of a long-term economic plan that never meets its targets when what all too many are experiencing is long-term economic pain – and the hardest hit are disabled people, single parents and women.’ **Jeremy Corbyn, Labour Party leader** ‘Britain has gone from top of the growth league to deep into the relegation zone, with each person set to be £687 worse off per year.’ **Vince Cable, Liberal Democrats leader** A political background to the Budget Philip Hammond began his Budget speech in March by noting that the previous Chancellor to deliver the ‘last Spring Budget’ was Norman Lamont, who was sacked ten weeks after doing so. ‘Wish me luck!’ joked Mr Hammond, but in the days and weeks that followed he may have wondered if he had needlessly tempted fate. He was forced into an immediate U-turn on the Budget’s key announcement – a rise in national insurance contributions for some self-employed workers – after backbench Tory MPs complained that it contradicted their manifesto commitments. Then came Theresa May’s snap General Election in June, in which the Conservatives unexpectedly lost their overall majority and were forced into a supply-and-confidence agreement with the Democratic Unionist Party. More recently, Mr Hammond created unwelcome headlines when he referred in an interview to the EU’s Brexit negotiators as ‘the enemy’ – a remark he subsequently described as ‘a poor choice of words’. So the lead-up to Mr Hammond’s first Autumn Budget has been far from easy, and his announcements will be intensely scrutinised. Despite all this, there has been some encouraging economic news for the Chancellor. Unemployment is at a 42-year low and productivity increased by 0.9% in the latest three months – the strongest growth rate for six years. But Mr Hammond was always unlikely to want to tempt fate again by being overconfident. As he said recently to the BBC: ‘I always operate on the principle – I think it is a sound and cautious principle – that everyone is sackable.’ 2018/19 Tax Calendar **April 2018** 5 Last day of 2017/18 tax year. Deadline for 2017/18 ISA investments and pension contributions. Last day to make disposals using the 2017/18 CGT exemption. 14 Due date for income tax for the CT61 period to 31 March 2018. 19 Automatic interest is charged where PAYE tax, Student loan deductions, Class 1 NICs or CIS deductions for 2017/18 are not paid by today. Penalties may also apply if any payments have been made late throughout the tax year. PAYE quarterly payments are due for small employers for the pay periods 6 January 2018 to 5 April 2018. PAYE, Student loan and CIS deductions are due for the month to 5 April 2018. Deadline for employers’ final PAYE return to be submitted online for 2017/18. **May 2018** 3 Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 April 2018. 19 PAYE, Student loan and CIS deductions are due for the month to 5 May 2018. 31 Deadline for forms P60 for 2017/18 to be issued to employees. **June 2018** 1 New Advisory Fuel Rates (AFR) for company car users apply from today. 19 PAYE, Student loan and CIS deductions are due for the month to 5 June 2018. 30 End of CT61 quarterly period. **July 2018** 5 Deadline for reaching a PAYE Settlement Agreement for 2017/18. 6 Deadline for forms P11D and P11D(b) for 2017/18 to be submitted to HMRC and copies to be issued to employees concerned. Deadline for employers to report share incentives for 2017/18. 14 Due date for income tax for the CT61 period to 30 June 2018. 19 Class 1A NICs due for 2017/18. PAYE, Student loan and CIS deductions due for the month to 5 July 2018. PAYE quarterly payments are due for small employers for the pay periods 6 April 2018 to 5 July 2018. 31 Second payment on account 2017/18 due. **August 2018** 2 Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 July 2018. 19 PAYE, Student loan and CIS deductions are due for the month to 5 August 2018. **September 2018** 1 New Advisory Fuel Rates (AFR) for company car users apply from today. 19 PAYE, Student loan and CIS deductions are due for the month to 5 September 2018. 30 End of CT61 quarterly period. **October 2018** 1 Due date for payment of Corporation Tax for period ended 31 December 2017. 5 Deadline for notifying HMRC of new sources of taxable income or gains or liability to the High Income Child Benefit Charge for 2017/18 if no tax return has been issued. 14 Due date for income tax for the CT61 quarter to 30 September 2018. 19 Tax and NICs due under a 2017/18 PAYE Settlement Agreement. PAYE, Student loan and CIS deductions are due for the month to 5 October 2018. PAYE quarterly payments are due for small employers for the pay periods 6 July 2018 to 5 October 2018. 31 Deadline for submitting ‘paper’ 2017/18 self assessment returns. **November 2018** 2 Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 October 2018. 19 PAYE, Student loan and CIS deductions are due for the month to 5 November 2018. **December 2018** 1 New Advisory Fuel Rates (AFR) for company car users apply from today. 19 PAYE, Student loan and CIS deductions are due for the month to 5 December 2018. 30 Online filing deadline for submitting 2017/18 self assessment return if you require HMRC to collect any underpaid tax by making an adjustment to your 2019/20 tax code. 31 End of CT61 quarterly period. Filing date for Company Tax Return Form CT600 for period ended 31 December 2017. **January 2019** 1 Due date for payment of corporation tax for period ended 31 March 2018. 14 Due date for income tax for the CT61 quarter to 31 December 2018. 19 PAYE, Student loan and CIS deductions are due for the month to 5 January 2019. PAYE quarterly payments are due for small employers for the pay periods 6 October 2018 to 5 January 2019. 31 Deadline for submitting your 2017/18 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2017/18 liability together with the first payment on account for 2018/19 are also due. Capital gains tax payment for 2017/18. Balancing payment – 2017/18 income tax and Class 4 NICs. Outstanding Class 2 NICs also due. **February 2019** 2 Deadline for submitting P46(car) for employees whose car/fuel benefits changed during the quarter to 5 January 2019. 19 PAYE, Student loan and CIS deductions are due for the month to 5 February 2019. **March 2019** 1 New Advisory Fuel Rates (AFR) for company car users apply from today. 3 5% late payment penalty on any 2017/18 outstanding tax which was due on 31 January 2019 and still remains unpaid. 19 PAYE, Student loan and CIS deductions are due for the month to 5 March 2019. 31 End of corporation tax financial year. End of CT61 quarterly period. Filing date for Company Tax Return Form CT600 for period ended 31 March 2018. Last minute planning for tax year 2018/19 – please contact us for advice. This Budget Report was prepared immediately after the Chancellor’s Budget Statement based on official press releases and supporting documentation. The Budget proposals are subject to amendment before the Finance Act receives Royal Assent. This Report is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. **Categories:** News --- ### [Demystifying Corporation Tax](https://sg-accounting.co.uk/blog/demystifying-corporation-tax/) **Published:** January 16, 2018 **Author:** Kerry Newman **Content:** As a contractor working through your own limited company, you are required to pay a range of taxes. This article is designed to help reduce the confusion that can surround Corporation Tax. We explain who has to pay it, how it is calculated and when it is due. ![Working together with your accountant](https://sg-accounting.co.uk/wp-content/uploads/2017/12/helloquence-61189.jpg "Accountants | SG Accounting") ## **Corporation Tax – the basics** All trading limited companies have to pay Corporation Tax. It is applied to any profit that the company makes during the financial year. When you register your company with Companies House, HMRC will automatically be informed and they will forward you form CT41G – Corporation Tax registration form and a Unique Taxpayer Reference (which you need in order to use HMRC online services). Corporation Tax is currently applied at the rate of 19%. It was reduced from 20% in April 2017. It is expected to reduce to 17% by 2020. Just to confuse everyone, the Corporation Tax year is different to the personal tax year (6th April to 5th April). **Instead, the Corporation Tax year runs from 1st April to 31st March.** Something else to remember. The Corporation Tax year will also be different to your company’s accounting period. ![Calculating the Numbers](https://sg-accounting.co.uk/wp-content/uploads/2018/01/calculating-bills_925x.jpg "Calculating | SG Accounting") ## **How Corporation Tax is calculated** To calculate the profit upon which you must pay Corporation Tax, you or your accountant will need to add up all your business income, bank interest, capital and other gains. From this, legitimate expenses and reliefs will be deducted. Corporation Tax at 19% will then be applied to the remaining amount. ## **Filing and payment deadlines** Corporation Tax return (CT 600) must be filed online within 12 months of your company’s accounting period. However, your company must pay any tax it owes to HMRC within nine months and one day following the end of its accounting period. For businesses with profits that exceed £1.5 million, payment must be made by instalments. Alternatively, if your company is trading but has not made a profit, you must inform HMRC that there is ‘nothing to pay’. ![Paying your Taxes to HMRC](https://sg-accounting.co.uk/wp-content/uploads/2015/09/what-is-ir35.jpg "What is IR35 | SG Accounting") ## **Paying Corporation Tax** You are able to pay any taxes owed online. There are different options available depending on the timeframe you have available to pay: Same day or next day - Online or telephone banking - CHAPS 3 working days - BACS - Direct debit - Online by credit or debit card - At bank or building society 5 working days - Direct debit ***Source****: HMRC* ## **Penalties** If your limited company is liable for Corporation Tax and you don’t meet the requirements set out, you may face paying a penalty. If you’ve made a mistake you must correct immediately. In some instances, HMRC may not penalise you. However, this depends on the circumstances. A full explanation of the penalties relating to Corporation Tax can be found on the [HMRC](https://www.gov.uk/guidance/corporation-tax-penalties) website. **You may be new to contracting or have been contracting for a while and are finding Corporation Tax confusing, our experienced team would be delighted to provide further guidance. You can contact us on 01962 867550 or via our** [**website**](https://sg-accounting.co.uk/contact/)**.** **Categories:** Tax **Tags:** Switching - Service --- ### [Recent tax changes for IT Contractors](https://sg-accounting.co.uk/blog/recent-tax-changes-contractors/) **Published:** January 30, 2018 **Author:** Kerry Newman **Content:** The IT contracting sector is booming at the moment, particularly in the area of Cybersecurity and GDPR. If you are looking to enter into the IT contractor market for the first time or are looking to re-enter it following a period of leave, we discuss the tax changes that are currently affecting IT contractors. ## **IR35** IR35, a small word but one that has a big impact. Originally introduced in April 2000, it is used by HMRC to combat ‘disguised employment’. In April 2017, the way the IR35 status of a public-sector contractor is determined changed. The end user (the client) is now responsible for determining this status, not the contractor themselves. The Chancellor, Phillip Hammond announced that a consultation paper on IR35 reform will be published early this year. With changes expected to take place sometime in 2019. **Tip**: To prepare for these changes, we advise that all new contracts are subject to an IR35 review. This review will highlight any areas of ambiguity and can give advice on how to mitigate the risk of IR35. ## **VAT Flat Rate Scheme** The Flat Rate Scheme was introduced to simplify the VAT accounting system for small businesses. Under this scheme, the rate at which VAT is calculated is determined by the trade sector the falls within. For an IT Contractor this is 14.5%. However, HMRC took the view that this scheme was being ‘taken advantage’ of. To combat this, changes were introduced in April 2017. This change meant all limited cost traders must now calculate VAT at 16.5%. The first step is deciding if you fall into the category of what HMRC call ‘limited cost traders’. HMRC, class a limited cost trader as: - a business whose VAT inclusive expenditure on goods less is than 2% of its turnover (or less than £1000) - any service business (i.e. not selling goods) This change means that many small businesses, including contractor, consultants and freelancers, will now to have pay more VAT than they did previously. This, puts forward the questions, ‘Is it even worth being part of the Flat Rate Scheme anymore?’ If you are questioning whether it is worthwhile to join the scheme. Or, are already on the scheme and are thinking of leaving, please seek professional guidance before making any decision. ## **Dividend tax allowance** Changes to how dividends are taxed were introduced in April 2016. As part of this change, a £5,000 dividend ‘tax allowance’ was introduced. This means that the first £5,000 of dividends made in a tax year are tax free. This is ‘tax allowance’ is being reduced to £2,000 from 6 April 2018. ## **Changes to finance cost deductions for property income** If you are a contractor who is investing in the future through buy-to let-properties, you may find that the yields you receive are reducing. Landlords are no longer able to deduct the full cost of their mortgage interest from the rental income they receive when calculating the profit to pay tax on. Instead, tax is now calculated on gross profit, rather than after the mortgage interest has been deducted. With a % of the mortgage interest being deducted after this. This change is being gradually rolled out and will be fully implemented by 2020. **Categories:** News, Tax **Tags:** Switching - Service --- ### [IR35 Advice for Contractors](https://sg-accounting.co.uk/blog/ir35-advice-for-contractors/) **Published:** February 6, 2018 **Author:** Kerry Newman **Content:** If you are already a contractor or are planning on becoming one soon, as well as understanding the UK tax system, you must also acquaint yourself with IR35, or the ‘Intermediaries’ Legislation’, or ‘off-payroll working’ as it is sometimes referred to. It affects every contractor working through a limited company. The consequences of falling foul of IR35 can be immense, so its vital that you understand how it works. ## **What is IR35** The Intermediaries Legislation was introduced in April 2000 in response to what HMRC deem as ‘disguised employment’. By this we mean, an employee who leaves their job on a Friday, to return on Monday doing the same role, but in the capacity as a contractor. As a contractor, he or she can take advantage of the tax advantages of being self-employed i.e. taking dividends through their limited company and paying less National Insurance Contributions. HMRC’s viewpoint is ‘*if it looks like an employee, acts like an employee and works like an employee – it’s an employee’*. ![Businessman sitting opposite, determining IR35](https://sg-accounting.co.uk/wp-content/uploads/2018/02/14929512628_138679d966_b.jpg "14929512628_138679d966_b | SG Accounting") ## **How IR35 status is determined** Determining if you fall ‘inside’ or ‘outside’ of IR35, is dependent on the specifics of your contract. It is therefore imperative that you check the specifics of every new contract. Determining the IR35 status of a contract comes down to employment law. In order to be seen as working ‘outside of IR35’, you must be able to demonstrate that you are ‘in business of your own account’ i.e. you are not governed by employment factors. Even though IR35 is incredibly complex, there are three tests that form the basis of all IR35 decisions. These are: **1. Mutuality of Obligation** This looks at whether you are free to work away from the contract or if you have an obligation to stay. **2. Personal service** This tries to determine if you personally must complete the work (as an employee must do). **3. Control** This examines if you as an independent expert consultant are free to use your professional discretion to decide how the assignment should be completed, or if the client exerts employer style-control over your day to day activities. If you pass one of these tests there may be a good chance you will be deemed as working outside of IR35. However, it is vital that you get this checked by an experienced professional. ## **The impact of IR35 on income** If you are deemed as working inside IR35, you will pay more tax. This is because you are classed as an employee and you must pay the full amount of tax and NIC’s from all income payments you receive from the business. ## **IR35 in the public sector** On 6th April 2017, the liability for establishing the IR35 status of public sector contractors shifted from the contractor to the client or ‘engager’. An engager can be a government department, recruitment agency or private sector consultant. This means the client or engager is responsible for determining the employment status of the contractor and paying the applicable taxes. HMRC have released the Check Employment Status for Tax tool to assist public sector bodies to determine the IR35 status of off-payroll workers. There has been a mixed response to the tool, with some contractors taking the view they have been wrongly classed as being inside IR35. ## **If in doubt, ask** We strongly recommend that before you sign any new contract, it undergoes an IR35 review. We offer this service at no extra cost as part of our [monthly accounting packages](/prices/). To find out how we can support you on your contracting journey, speak to one of our directors on 01962 867550. **Categories:** IR35 **Tags:** IR35 - Guide, Switching - Service --- ### [Ask an Expert: What You Need to Know About Expenses](https://sg-accounting.co.uk/blog/ask-an-expert-expenses/) **Published:** March 7, 2018 **Author:** Kerry Newman **Content:** When we start working with a contractor, one of the first questions we get asked, is, “*As a contractor working through my own limited company, can I claim for business expenses?*” followed by, “*What expenses can I claim for?*” You’ll be pleased to know that you can claim for a number of expenses that you incur during the course of running your own limited company. This article covers in detail what an ‘allowable expense’ is and what you can claim for. ![Getting to know your accountant](https://sg-accounting.co.uk/wp-content/uploads/2018/02/free-tax-planning-copy.jpg "Accountant Talking | SG Accounting") ## **What is an allowable expense?** Before you get carried away and go on a shopping spree, you need to understand what HMRC deems to be an ‘allowable expense’. An allowable expense is something that has been incurred ‘wholly, exclusively and necessarily’ for use by the business. The costs must be incurred during the process of running your business or during the act of trying to grow the business. If the item or service has a dual purpose (i.e. it is used for business and personal use) it doesn’t come under the definition of an allowable expense. ## **What you can claim for** Here is a summary of some of the main business expenses you may be able to claim for: - Salaries - Pension contributions (made via an approved scheme) - Employers National Insurance Contributions that are paid on employees’ salaries - Training courses (if it is related to your profession) - Stationary (business cards, letterheads) - Postage costs - Printing costs - Business insurance (e.g. professional indemnity, public liability insurance) - Costs and fees incurred from using the services of an accountant - Mobile phonecosts (as long as the contract is in the business’ name) - The cost of business calls that have been made on a personal phone - Subsistence costs (e.g. meals, laundry etc.) that have been incurred whilst away from the normal place of work - Travel costs (if using your own car, you claim 45p per mile for the first 10,000 miles and 25p per mile after that) - Accommodation costs when away from your normal place of work - Parking costs - Home office costs (HMRC allows a flat rate of £4 per week without receipts, or, you can work out a proportion of household bills) - IT equipment (hardware and software) - Costs you’ve incurred through advertising and marketing your business - Authorised bank charge (e.g. standing charges for each quarter) - An eye test (for employees who use a computer) ## **How expenses work** The rules relating to business expenses are complex. Make sure you look out for updates from ourselves informing you of any changes. Allowable expenses can be paid through the company before the deduction of Corporation Tax. **Example:** | Income | £10,000 | |---|---| | Expense | £3,000 | | Profit (before tax) | £7,000 | | Corporation Tax (currently 19%) | £1,330 | | Profit (after tax) | £5,670 | All expenses must be supported by a valid receipt or bank statement that details the transaction. ## **Duality of purpose rule** If you have a client who is based in a nice sunny climate and the next time you visit them you decide to add-on a couple of days for personal leisure time, you will see yourself falling foul of HMRC’s duality of purpose rule. This means that you won’t be able to claim tax relief on any portion of the trip that has a personal element. ## Need some advice? ***If you need further clarification on what you can claim as a business expense, get in touch with us on 01962 867550 or send us a message*** [***here***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Expenses, Tax **Tags:** Switching - Service --- ### [Life as an IT Contractor](https://sg-accounting.co.uk/blog/life-as-an-it-contractor/) **Published:** March 15, 2018 **Author:** Kerry Newman **Content:** ## **Are you dissatisfied with your current role?** Do you find yourself sitting and looking at your screen dreaming of what it would be like to ‘go it alone’ and become a contractor? If this sounds like you – dream no more! This week’s article gives you a snapshot of what life is like as an IT contractor. First off, we look at if now is the right time to become a contractor. ![Man stretching, getting ready for a new day as his own boss](https://sg-accounting.co.uk/wp-content/uploads/2018/03/pexels-photo-440581.jpg "Man Stretching Arms during Break Time at Office | SG Accounting") ## **Are the market conditions right?** The Autumn Budget in November made sad reading. Economic growth was slow, and borrowing was up. However, news from the Spring Statement shows that things have improved. Productivity has increased, economic growth has been revised and borrowing is down. Brexit continues to cast a cloud over us and organisations continue to put a hold on hiring plans. Which means they are turning to temporary talent to fill gaps. If you are planning on making the leap to contracting now could be the time to do it. ![Tim talks on the phone about his contractor life over a coffee](https://sg-accounting.co.uk/wp-content/uploads/2018/03/pexels-photo-541526.jpg "Talking on the phone | SG Accounting") ## **Straight from a contractor’s mouth** Tim, who has been an IT contractor for three years, states: “I enjoy the freedom and flexibility of contracting. It gives me the opportunity to continually learn new skills. Working for a company on an employed basis, I found that after a couple of years I was yearning to move on as I was bored doing the same thing day in day out. Contracting offers a lot of variety, and I’ve found I haven’t been bored once.” ## **Tips to make it as an IT contractor** We asked a number of contractors we work with, what it takes to be a successful IT contractor. This is what they told us: - Don’t be afraid to admit if you don’t know something. It’s not a failure. Say, “I don’t know, but, I’ll find out and get back to you.” - Don’t be scared to make mistakes. Learning from these mistakes, will make you a better contractor. - Remember, you are your own boss. You are responsible for keeping yourself on track and for making the final decision. - You’ll be surrounded by other talented contractors. Take note of what they are doing and learn from them. - Not only will you be working but you’ll also be running your own business. You will be busy and it’s easy to miss things. At the start of your contracting career find a good accountant who is experienced in working with contractors. ![Embrace new beginnings as a new contractor](https://sg-accounting.co.uk/wp-content/uploads/2018/03/pexels-photo-915216.jpg "Embrace New Beginnings | SG Accounting") ## **What to consider when becoming an IT contractor** As it’s been mentioned, contracting gives a great deal of flexibility. However, the downside of contracting is there will be times when you will find yourself between contracts. It is advisable to put money aside to cover these gaps. Contractors can on average earn up to 50% more than their employed counterparts. You work hard for this money, so you need to ensure that you operate in the most tax efficient manner. As a contractor, you have two options available. You can choose to work through an umbrella company or via your own limited company. A qualified contractor accountant, like ourselves, will be best placed to advise on which route is best for you. ## Want to start contracting? ***If you are thinking of stepping into the contracting world, gives us a call on 01962 867550 and we’d be delighted to talk you through the process.*** **Categories:** New to contracting, Running your business --- ### [Pensions and Tax Advice for Contractors](https://sg-accounting.co.uk/blog/pensions-tax-advice-contractors/) **Published:** March 21, 2018 **Author:** Kerry Newman **Content:** If you choose, you can retire at 55. Sounds very tempting, doesn’t it? What would you do with your retirement? Spend it travelling? Maybe you would like to learn a new skill? There are so many options. However, in order to do these things, you need money to finance them. Paying money into a pension scheme enables you to save money now and plan for your future, at the same time. ## **Save tax through a pension** As a contractor, you pay tax on your income. By putting some of this money into a pension, you pay less tax. You can either pay money into a pension personally from your own funds or through your company bank account. Paying it via your business account is the most tax efficient way in most cases. This is because, the money goes into the pension before tax has been applied, meaning you save on Income Tax and Corporation Tax. Example: N.B: *This example is based on a contractor working through a limited company, outside of IR35 and a higher rate tax payer.* For every £100 you earn, Corporation Tax (19%) is charged. This brings the amount down to £82. Most contractors will choose to withdraw this from their limited company by a combination of small salary and dividends. If you take the £82 as dividends, you will incur dividend tax at 32.5%, which makes it £55.35. However, if you choose to pay into a pension you can contribute the £100 and it should continue to grow inside the pension scheme. No corporation tax or income tax is paid. ## **Key facts to consider with pensions** ## ![Saving up for your pension scheme](https://sg-accounting.co.uk/wp-content/uploads/2018/02/business-money-pink-coins.jpg "business-money-pink-coins | SG Accounting") In April 2015, the UK government introduced significant changes to pensions. These changes gave increased flexibility to individuals on when they can draw their pension pots and how they use them. We’ve outlined the changes that impact on contractors: - You can invest up to £40,000 per year into a pension through your limited company without incurring any additional tax implications. This is available up to your lifetime allowance of £1 million. - A tax free lump sum (also known as a Pension Commencement Lump Sum) can be taken from your pension. This is usually limited to 25%. The remaining 75% can be taken as a lump sum or as a regular income, subject to income tax. - From the age of 55, you can withdraw income from your pension as a lump sum or as a regular income without any restrictions. Please bear in mind though, these withdraws may be subject to income tax. - If you pass away before the age of 75, any funds left in your pension can be paid out tax free to your beneficiaries as a lump sum or as a drawdown pension. - If you are not comfortable with your funds being invested in stocks, you can choose to keep your funds in cash. ## **Choosing a pension provider** ![MacBook Air on a desk with a browser open on Google about to search for something](https://sg-accounting.co.uk/wp-content/uploads/2018/03/pexels-photo-67112.jpg "Computer | SG Accounting") Let’s be honest, contractors are a unique breed. The one thing that sets you apart from your employed colleagues, is that you don’t have a steady working agenda. There will be times where your contracts will be back to back, and there will be times when you find yourself having a break between contracts. When choosing a pension provider, it is important that you look for one that can accommodate for such circumstances. Ask upfront if they offer the options of being able to increase or decrease contributions alongside being able to stop, start contributions without incurring penalties. ## Want to take the next step? ***If you are interested in setting up a pension scheme or are considering changing your pension provider, we recommend that you seek professional advice from a financial advisor. We are happy to recommend one if you are looking for someone who is experienced in working with contractors.*** **Categories:** Finance, Tax **Tags:** Switching - Service --- ### [Latest legislation 2018: How will it impact you?](https://sg-accounting.co.uk/blog/latest-legislation-2018-impact/) **Published:** March 27, 2018 **Author:** Kerry Newman **Content:** The world of contracting is ever changing. This week’s article discusses some of the changes to legislation that are occurring that contractors or owners of limited companies need to be aware of. ## **Drop in dividend tax allowance** ![A statement of dividends with the corner of a banknote overlaid](https://sg-accounting.co.uk/wp-content/uploads/2018/03/Stocks_dividend_buy.jpg "Stocks_dividend_buy | SG Accounting") A large proportion of contractors decide to take a small salary and the remainder via dividends as this is the most tax efficient manner, as dividends aren’t subject to National Insurance Contributions. The way that dividends are taxed changed on 6th April 2016. This change effectively saw a £5000 dividend tax allowance been introduced. On 6th April 2018, another change will take place. **The dividend tax allowance will drop from £5,000 to £2,000**. If you are a basic rate tax payer, that means **you could be £225 worse off**. A higher rate tax payer will be up to £975 worse off and an additional rate tax payer will be £1,143 worse off per year. What you can do: The first thing you should do is sit down and review your tax planning with your accountant. If there are additional shareholders, they should be doing the same thing. ## **April brings new beginnings** ![Businessman's hand holding a pen above a new month of his calendar](https://sg-accounting.co.uk/wp-content/uploads/2018/03/calendar-close-up-dates-862731.jpg "calendar | SG Accounting") 6th April sees the start of the new tax year, and with it new allowances and entitlements. We’ve put together a list of what you ought to be aware of: - **Personal allowance** – increases from £11,500 to £11,850 - **Lifetime allowance** – for the tax year 2017/18 this was set at £1 million. This has been raised in line with inflation, giving you an extra £30,000 in pension benefits without incurring tax penalties. - **State pension** – is increasing 3% in line with inflation. This represents an extra £191 for those who started drawing their pension before 6th April 2015, or £250 for others. - **Council tax** – if you’re a contractor who owns a rental property, if that property is left empty you could see your council tax bill double. Local councils now have the power to increase council tax premiums by 100% for properties that remain unoccupied for two years or more. - **Buy to let tax relief** – landlords will only be able to deduct 50% of their mortgage interest payments against rental income. ## Need some advice? ***If you are concerned by the drop in the dividend allowance or are looking for clarification on any of the other points mentioned, give us a call on 01962 867550, and we’d be delighted to discuss them with you in further detail.*** **Categories:** News, Tax **Tags:** Switching - Service --- ### [Switching Contractor Accountants](https://sg-accounting.co.uk/blog/switching-contractor-accountants/) **Published:** April 3, 2018 **Author:** Kerry Newman **Content:** Every successful relationship is built on trust. This is particularly important when forming professional relationships, like with an accountant. However, there may be times, for one reason or another, when that trust is no longer there, and you feel the need to find a new accountant. This can be daunting, you may be concerned how the switch over will be handled, will all the relevant paperwork be sent across, or will information get mislaid. These are all valid concerns. Over our 20 years, we’ve welcomed onboard lots of contractors. We’ve put together our top advice that will help you switch accountant with ease. ## When is the best time to switch? ## ![Three coloured alarm clocks in a staggered row that read 11 o'clock](https://sg-accounting.co.uk/wp-content/uploads/2018/04/the-eleventh-hour-3107229_1280.jpg "clocks | SG Accounting") It is suggested that the best time to switch is at the end of your financial tax year. For several reasons, this may not always be possible. If you are looking to switch accountants, it is best to choose a time when there is little business activity between the both of you. So, deciding to switch accountants just before you have to submit your tax return, may not be the best time to choose. ## **Make sure everything is ticked off the ‘to-do’ list** Before switching, check your agreement with your current accountant to see what responsibilities you must comply with in relation to ending your agreement. It could be that you have to provide your current accountant with a certain amount of notice before you can switch. ## **Pay your dues** The main thing that is responsible for holding up the switching process, is unpaid fees. It could be that you do not agree with a fee your current accountant has levied. If this is the case, it is always advisable to try and resolve the issue amicably with your accountant. If this is not possible, you can investigate going down the arbitration route through ICAEW or other professional body. Or, if you wish you can lodge a formal complaint against your accountant with their professional body. ## **How a switch works** ## ![A green road sign that reads "Time for change" with a large clock in the background](https://sg-accounting.co.uk/wp-content/uploads/2018/04/change-3256330_1920.jpg "change | SG Accounting") When you’ve chosen a new accountant, this accountant will write to your current accountant informing them of their ‘assumption of responsibility’ for your business, asking for all relevant paperwork and also requesting professional clearance. This basically means that your new accountant is seeking confirmation that there is no reason why you can’t be taken on as a client. Your current accountant should provide all these details in a reasonable timeframe. Accountants that are chartered and certified, are provided with guidelines on this timeframe by their governing body. There may be a small fee involved with switching accountants to cover any administrative tasks. Once any outstanding fees have been paid and your new accountants have received all relevant paperwork, the transfer is complete. ## **Simply the best…** If you’re new to contracting and are looking for an accountant or have been contracting for a while and are looking to switch accountants, we’ve got over 20 years’ experience helping contractors with their accountancy and taxation needs. Our team’s knowledge and experience mean’s that switching to us is hassle free and seamless. **To discuss how we can help you, give us a call on 01962 867550 and one of our highly skilled accountants will be happy to discuss the various options that are available.** **Categories:** Running your business, Tax **Tags:** Switching - Service --- ### [5 top tips to organise your company costs and expenses](https://sg-accounting.co.uk/blog/5-top-tips-organise-company-costs-expenses/) **Published:** April 10, 2018 **Author:** Kerry Newman **Content:** **Working as a contractor may be new to you, or it may be something that you have been doing for a while**. Whatever stage of the contractor life-cycle you’re in, there are some things that are good to be reminded of everyone now and again. We think one of these is keeping your limited company expenses and costs organised. To help you keep everything ‘ship-shape’, here are our 5 top tips for organising your costs and expenses. ## **1. Know your responsibility as a limited company director** ![Body of a woman on a white background holding a mug with'I'm the Boss' printed on the side](https://sg-accounting.co.uk/wp-content/uploads/2018/04/brooke-lark-194253-unsplash.jpg "boss-cup | SG Accounting") If you are new to contracting, you will have to get used to a new way of working. As a contractor working through your own limited company, you will be working, and you will also have the added responsibility of making sure the company is run correctly. As a limited company is a separate legal entity, it needs to have its own business bank account. Whilst, there is no law that directly states this is necessary. HMRC and accountants strongly recommend that you set up a bank account for your limited company as it keeps your personal and business expenses separate and it will make it easier for you to calculate your tax liability. ## **2. Open a business account** ![Two hands in a handshake, agreeing on a deal in a bank](https://sg-accounting.co.uk/wp-content/uploads/2018/04/cytonn-photography-604681-unsplash.jpg "Handshakes | SG Accounting") How do you open a business bank account? There are a few ways you can do this. Opening a business bank account can sometimes be done online. Sometimes it will be necessary to visit the nearest branch of your chosen bank and present them with your incorporation documentation and some personal identification. It is also a good idea to open a separate deposit account which can be used to put aside money for VAT and Corporation Tax. At SG, we can help you set up a business bank account fast and without having to go into a branch. ## **3. Keep your bank accounts separate** ![A close-up of three separate bank cards under the fold of a wallet](https://sg-accounting.co.uk/wp-content/uploads/2018/04/credit-card-851506_1920.jpg "close-up of three separate bank cards under the fold of a wallet | SG Accounting") To prevent your business and personal expenses becoming mixed up – and to keep HMRC and your accountant happy! – it is best practice to keep your business and personal expenses and costs separate. The simplest way to do this is to put all your business expenses through the business account and all your personal expenses through your personal account. We understand that there may be times when it is necessary to put a business expense through your personal bank account. You can reclaim this cost in a similar way as you would when claiming an expense from an employer. ## **4. Learn how to make an expense claim** ![A hand holding a pen and writing down their expenses in a notebook on a desk](https://sg-accounting.co.uk/wp-content/uploads/2018/04/desk-hand.jpg "desk hand | SG Accounting") Making an expense claim against your limited company is relatively simple. To make an expense claim you must note the details of the claim on a piece of paper and attach to this the receipt for the expense. Then, you transfer the total from your business account to your personal account. The expense claim must be stored in your company records. ## **5. Cloud accounting and expenses** ![An illustration of cloud computing, with different mobile devices surrounding the cloud](https://sg-accounting.co.uk/wp-content/uploads/2018/04/cloud-computing-2153286_1280.png "cloud-computing-2153286_1280 | SG Accounting") Cloud accounting has made keeping track of costs and expenses and receipts that much easier. Most cloud accounting software packages are supplied with a smartphone app that enables you to upload details of your expenses and images of receipts straight to the cloud. This reduces the risk of your receipts becoming lost or damaged. If you prefer to keep physical copies of your receipts we recommend that you: - Store them by date - Store them by type - Keep them stored in a secure place - Store them carefully so they don’t become ripped or damaged. **Top tip:** Our most important tip is that you claim for all business expenses you incur, even the smallest. It may seem like a waste of time claiming for something that costs a couple of points, but if you did this with everything you could soon find yourself out of pocket for a considerable amount of money. ## What can I claim as a business expense? ***For details on what is classed as an allowable business expense please read our article ‘***[***Ask an Expert: What you need to know about expenses***](https://sg-accounting.co.uk/blog/ask-an-expert-expenses/)***.’*** **Categories:** Expenses, Running your business **Tags:** Switching - Service --- ### [What does an accountant do?](https://sg-accounting.co.uk/blog/what-does-an-accountant-do/) **Published:** April 24, 2018 **Author:** Kerry Newman **Content:** A lot of contractors we’ve talked to over the last 20 years have told us one of the things that has made their lives easier has been finding an experienced contractor accountant. We’ve even been described as a contractors’ ‘best friend’. Maybe that’s a little OTT, but we do like to see ourselves as more than someone who processes numbers. We are a valuable source of business advice and guidance. If you’re new to contracting and are looking for an accountant, before choosing one, it’s a good idea to understand what an accountant does and how their services can benefit you as a contractor. Accountants are responsible for handling the financial tasks of a running business, such as: ## **Bookkeeping** ![A person's hands on a calculator doing bookkeeping – a MacBook Air displays the worksheet in the background.](https://sg-accounting.co.uk/wp-content/uploads/2018/04/bookkeeping.jpg "bookkeeping | SG Accounting") Bookkeeping forms a major part of accounting. Bookkeeping focuses on keeping an accurate and complete record of financial transactions. Transactions commonly covered include; invoicing clients for goods or services provided, recording receipts from customers, recording invoices from suppliers and paying suppliers and providing financial reports for the business. These transactions can be handled through paper records, excel spreadsheets, desktop software or more and more frequently cloud accounting software like FreeAgent or Xero. ## **Tax returns** ![Calculating the Numbers](https://sg-accounting.co.uk/wp-content/uploads/2018/01/calculating-bills_925x.jpg "Calculating | SG Accounting") An accountant can complete a tax return (Corporation Tax returns and Self Assessment Tax Returns) on your behalf and calculate any tax liability you may owe. ## **Payroll** ![Money Calculation](https://sg-accounting.co.uk/wp-content/uploads/2018/01/numbers-money-calculating-calculation.jpg "numbers-money-calculating-calculation | SG Accounting") If your business has employees, an accountant will ensure that taxes owed in terms of a salary (PAYE) are made in accordance with legislation. Meaning, you avoid any possible fines for mishandling. ## VAT Returns If your company turnover is more than the VAT threshold (£85,000 for 2018/19) you may be required to become VAT registered and complete and submit VAT returns every quarter. Even if you will not exceed the threshold it may make business sense to be VAT registered voluntarily. An accountant will make sure your returns are handled accurately and are submitted on time. ### **What else does an accountant do?** Some contractor accountants, like ourselves, also assist in: ## **Forming a limited company** ![handshake in office environment](https://sg-accounting.co.uk/wp-content/uploads/2018/04/cytonn-photography-604681-unsplash.jpg "Handshakes | SG Accounting") When you join the SG Accounting family, your limited company will be incorporated by our expert team, at no extra charge. We’ll take care of: - Registering your company for VAT and PAYE - Completing the registration process with Companies House - Setting up a bank account for your business In our initial face to face tax planning meeting, we’ll discuss the best share structure for your business, ensuring you operate in the most tax efficient manner. ## **IR35 contract reviews** If you are not familiar with IR35, our article ‘[IR35 advice for contractors](https://sg-accounting.co.uk/blog/ir35-advice-for-contractors/)’ should answer any questions you may have. Even, if you have been contracting for a while we suggest that you take a read of the article to reacquaint yourself with the regulation. All our packages include IR35 contract reviews. We will review your contract and working practices for IR35 compliance. If we feel that your contract places you inside IR35 we can offer advice on your next steps. ### **Need a hand?** ***We have over 20 years’ experience supporting contractors and making life that little bit easier. Whether you are new to contracting or have been doing it for some time, our highly experienced team are on hand to assist you with every contracting milestone. To discuss our range of packages, give us a call on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance, New to contracting **Tags:** New - Guide, New - Service --- ### [Understanding your contract – what to look out for](https://sg-accounting.co.uk/blog/understanding-your-contract/) **Published:** May 15, 2018 **Author:** Kerry Newman **Content:** So, you’ve decided that you want to become a contractor. Your next step will be to decide how you are going to operate as a contractor. Two of the options available is through a limited company or via an umbrella company. Working through your own limited company continues to be the most tax efficient route for most. It’s also important to mention that most contracts are offered through recruitment agencies. Most agencies prefer contractors to work through a limited company, so this is another reason to consider setting one up. After you’ve accepted an offer, agreed on a rate and a start date, you’ll need to sign an independent contractor agreement. This article looks at what limited company contractors should be aware of regarding contractor agreements. ## **Understand who the contract is between** ![A handshake agreement between a contractor and client](https://sg-accounting.co.uk/wp-content/uploads/2018/05/handshake-agreement.jpg "handshake agreement | SG Accounting") If you are working with the client directly, the contract is between your invoicing company (your limited company) and the client. If you are working with an organisation via a recruitment agency, the contract will be between your invoicing company and the recruitment agency. ## **What is the IR35 standing of the contract?** The most important consideration for you as a contractor at this stage is whether the contract will place you inside or outside of IR35. If you are not aware of IR35, our article ‘[IR35 advice for contractors](https://sg-accounting.co.uk/blog/ir35-advice-for-contractors/)’ covers the specifics of this legislation in detail. For the contract to be deemed to be outside of IR35, the terms used must show that the engagement does not constitute employment. Key points to consider are: ### Nature of work and schedules The contract should accurately describe the nature of the work and describe it as a project or projects. ### Right of control The contract should show that you as a contractor are not under the direction, control or supervision of the client. As a contractor, you must be able to show that you have control over the method and manner of your work. ### Mutuality of Obligation The contract needs to avoid stating that there is an ongoing obligation to provide work. It is recommended that further work is set out under a separate contract. Additionally, the contract should not give the client or agency the opportunity to extend the contract without your consent. ### Substitution Plays an important role in determining if a contract is inside or outside of IR35. Substitution is the right for a contractor to supply a replacement contractor if they are unwilling or unable to carry out the service under the contract. ## **Top tip: Read every detail carefully** ![A contractor agreement sits on the desk underneath a pair of glasses next to a laptop](https://sg-accounting.co.uk/wp-content/uploads/2018/05/glasses-on-agreement.jpg "glasses on agreement | SG Accounting") As a self-employed contractor, it is vital that you reduce your commercial risk. Carefully reviewing every aspect of the contract will help you to reduce any risk. You need to pay special attention to the rights, obligations and restrictions outlined in the agreement. This includes checking how far these extend and how they will be enforced. If you any concerns regarding the contract, the first step is to contact the organisation who the contract is with i.e. the client or the recruitment agency. If further clarification is needed, you should contact a contract law expert. ***We offer a range of accountancy packages, some of which include unlimited IR35 reviews. Our packages are perfect for contractors at every stage of their contracting career. Give us a call on 01962 867550 and we’ll be delighted to talk through our range of fully inclusive accountancy packages.*** **Categories:** Finance, New to contracting, Running your business --- ### [Don't get caught out by IR35 in 2018](https://sg-accounting.co.uk/blog/dont-get-caught-out-by-ir35-2018/) **Published:** May 29, 2018 **Author:** Kerry Newman **Content:** Upon deciding to become an independent contractor, one of the first things you should acquaint yourself with is the Intermediaries Legislation or IR35 as it is commonly referred to. IR35 is a complex piece of legislation. To help you from getting caught out by IR35 in 2018, we’ll briefly discuss what the Intermediaries Legislation entails, the changes that are taking place and why it’s important for you to stay on top of your IR35 knowledge. ## **What is the Intermediaries Legislation and why is it needed?** ![Advisor helping out a client while sat in a booth in front of a laptop](https://sg-accounting.co.uk/wp-content/uploads/2018/05/advisor.jpg "advisor | SG Accounting") The Intermediaries Legislation was introduced in 2000 to effectively cut down on the number of companies that were paying workers ‘off-payroll’ or as contractors, when in effect they were employees. Disguised employment as it is referred to costs HMRC millions in lost revenue each year, so they are extremely keen to crack down on it. ### **Public sector contracts** The Chancellor announced in the 2016 Autumn Statement that from 6th April 2017, the responsibility for determining the IR35 status would shift from the contractor to the agency, their client or a third party who has engaged them. If the contractor is classed as being inside IR35 they will be taxed at source, similar to how employees are taxed. As this responsibility now lies with the agency or the client themselves, they are implementing more rigorous checks to ensure they are compliant with the legislation. ### **Private sector contractors** News has been circling for a while that similar changes that were rolled out to the public sector will be introduced to the private sector. HMRC announced on 18th May that they have opened the consultation process on how to tackle the non-compliance with the off-payroll working rules (IR35) in the private sector. The consultation is open to 11.45pm on 10 August 2018. To register your views, send an email to: <offpayrollworking.intheprivatesectorconsultation@hmrc.gsi.gov.uk> However, some in the industry feel that the government has already made its decision and that changes could be rolled out as early as April 2019. I feel this is unlikely given the consultation has been released later than they had initially indicated. What does this mean for private sector contractors if the changes go ahead? Well, if the changes do go ahead, agencies and clients will have the responsibility of determining the IR35 status of contractors. ## **Importance of being on top of IR35** ![front of legal courthouse](https://sg-accounting.co.uk/wp-content/uploads/2018/05/courthouse.jpg "courthouse | SG Accounting") In the last few weeks, HMRC have faced another crushing defeat in the IR35 case Jensal Software Ltd v Revenue & Customs. IT contractor, Ian Wells who provided services through his own limited company to the Department of Works and Pensions successfully argued in court that his was a contract for service (placing him outside of IR35). His successful appeal against HMRC’s ruling saved him from having to pay a tax bill more than £26,000. Mr. Wells put his win down to his ‘sound knowledge’ of the Intermediaries Legislation. CEST (Check Employment Status for Tax) is the tool that agencies and end clients use to check the IR35 status of contracts. It has come to light that the tool has incorrectly calculated the IR35 status of some contractors. This news further emphasises our point that contractors, old and new, need to be fully aware of the Intermediaries Legislation and not just rely on technology to determine their status. Check out or guide to [‘IR35’](https://sg-accounting.co.uk/resources/guides/what-is-ir35/) for more information. ***Do you have questions about IR35? Or, are you concerned about the position of your contract? Give us a call on 01962 867550 and have a chat with our [team](https://sg-accounting.co.uk/contact/) who will be happy to answer any questions you have around IR35.*** **Categories:** IR35, News **Tags:** IR35 - Guide, Switching - Service --- ### [Fuel efficient cars for contractors](https://sg-accounting.co.uk/blog/fuel-efficient-cars-contractors/) **Published:** June 19, 2018 **Author:** Kerry Newman **Content:** As a contractor who operates through a limited company and who uses your own vehicle to travel to your clients’ office, you should be used to claiming for mileage expenses. With the fluctuating fuel costs, you may have noticed that your fuel bills have been steadily increasing. If you are looking to spend less on fuel each month and are conscious of the impact your journeys have on the environment, we’ve put together a list of some the most fuel-efficient cars for contractors: ## Peugeot 208 ![Blue Peugeot 208](https://sg-accounting.co.uk/wp-content/uploads/2018/06/peugeot-208.jpg "peugeot-208 | SG Accounting") The Peugeot 208 is essentially an updated version of the 207 model. However, Peugeot has managed to reduce its weight by more than 100kg’s which makes this car one of their most economical models. According to reviews, the 1.6 litre diesel model can run at 94.2mpg. This small sporty car is perfect if you do a lot of town driving and its size makes it easy to fit into small parking spaces. ## Renault Clio ![Red Renault Clio](https://sg-accounting.co.uk/wp-content/uploads/2018/06/renault-clio.jpg "renault-clio | SG Accounting") First launched in 1990, the Renault Clio has been a stable on our roads for over 25 years. Classed as a supermini car, the newest model is described as a stylish and small practical car. The Renault Clio’s official fuel economy figure is 88.3mpg, and it also has an impressive 83g/km of CO2. For a small car it has a decent boot space, great for those contractors who need a bigger space for their specialised equipment. ## SEAT Toledo![White Seat Toledo parked in front of a UK house](https://sg-accounting.co.uk/wp-content/uploads/2018/06/seat-toledo.jpg "seat-toledo | SG Accounting") The SEAT Toledo is one of the biggest cars on our list (its boot space is around 500 litres), yet it still is one of the cheapest to run and the 1.4 litre diesel model gives an impressive fuel economy figure of 83.1mpg A new model will cost you from £17,000 – £20,000 depending on the engine size. You can pick up a two-year model for around £12,000. ## Fiat 500 ![Brand new Fiat 500 parked in front of trees](https://sg-accounting.co.uk/wp-content/uploads/2018/06/fiat-500.jpg "fiat-500 | SG Accounting") The Fiat 500 is the smallest car on our list, measuring only 3.5 metres in length. This puts it in the category of city-car, meaning it is perfect for nipping around busy roads. However, this means it is very limited on internal space, with the boot space only offering 182 litres. If you want a small stylish car for short journeys, the Fiat 500 is perfect. Plus, it’s extremely cost effective to run, offering 83.1mpg. ## Ready to embrace the future of driving? If you’re considering going fuel-free altogether, here are some of the top-rated electric cars: Nissan Leaf, Volkswagen e-Golf and the Tesla Model S. Another benefit of purchasing a plug-in vehicle is that they benefit from government grants and incentive schemes, which helps to reduce the cost of owning an electric vehicle. ## Recap of how to work out mileage expenses HMRC have a simplified scheme for claiming mileage expenses for journeys made by car, van or motorcycle. Up to 10,000 miles travelled in a tax year, the rate of 45p per mile can be applied, distances after this are calculated at a rate of 25p per mile. ***For further information on allowable business expenses and how to claim for expenses, give us a call on 01962 867550 or send us a [message](https://sg-accounting.co.uk/contact/) via our website.*** **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [The difference between an Umbrella and a Limited Company](https://sg-accounting.co.uk/blog/umbrella-limited-company-differences/) **Published:** July 4, 2018 **Author:** Kerry Newman **Content:** If you are thinking of becoming a contractor but are unsure how to go about it, this article discusses the different ways to operate and gives pointers to help you decide which route is best suited to you. ### What are the options available to contractors? As a contractor, you can choose to work through a PAYE umbrella company or via your own limited company. ## Umbrella company ![Contractor's hand holding a pen and signing a contract](https://sg-accounting.co.uk/wp-content/uploads/2018/05/contractor-signing-contract.jpg "contractor signing contract | SG Accounting") If you choose to work through an umbrella company, the company should provide you with a contract of employment. This contract gives you the same rights as someone who is employed. This means you will be entitled to receive sick, holiday, maternity or paternity pay. As the umbrella company is acting as your employer they are responsible for processing your salary. They will ask you to submit a timesheet and from this, they will calculate your salary minus the correct amount of NIC and tax. ## Limited company ![A person's hands on a calculator doing bookkeeping – a MacBook Air displays the worksheet in the background.](https://sg-accounting.co.uk/wp-content/uploads/2018/04/bookkeeping-615384_1920.jpg "Bookkeeping | SG Accounting") The draw of a limited company for contractors is that their take-home pay will be higher than if they worked through an umbrella company. Limited company contractors have access to a wider range of tax allowances and reliefs, which in the majority of instances makes this the most tax efficient way to operate. However, being a director of a limited company will add an extra layer of responsibility. You will be tasked with making sure the company is run in a fit and proper manner and that any paperwork and tax liabilities are submitted and paid on time. The table below explains what to think to about when looking at each option and lays out in greater detail the main advantages and disadvantages of an umbrella and limited company: | **A limited company is suitable for:** | **An umbrella company is suitable for:** | |---|---| | ► Contractors who intend on making contracting a long-term career choice ► Contractors who earn more than £25,000 p.a. ► Contractors who work outside of IR35 ► Contractors who want more control over their finances ► Contractors who want to be their own boss and build their own business ► Contractors who want to work in the most tax efficient manner | ► First time contractors who want the security that employment offers ► Contractors earning less than £25,000 p/a ► People who intend to contract for a short period ► Contractors who don’t want to take care of the admin that comes with running a limited company ► Contractors working inside IR35 | | **Limited company advantages** | **Umbrella company advantages** | | ► In most cases, it is the most tax efficient way to operate ► Presents a professional image ► You have complete control over the business ► Higher take-home pay ► Can claim for a greater number of expenses ► Choose how you want to get paid – usually a mixture of a small salary & dividends ► Can join the VAT Flat Rate Scheme | ► Contractor receives full employment rights and benefits: sick pay, holiday pay, paternity / maternity pay ► Tax and national insurance obligations are handled by the umbrella company ► No paperwork – contractor only needs to submit a timesheet | | **Limited company disadvantages** | **Umbrella company disadvantages** | | ► Extra paperwork and admin of running a company (working with an experienced contractor accountant can dramatically reduce this burden) ► If you are contracting privately through your own limited company, you could be at risk of being investigated under the IR35 legislation | ► Least tax efficient way to operate as you are taxed at source ► You’re reliant on the umbrella company to collect the money owed to you | ## Any questions about umbrella companies or limited companies? ***If you have any questions related to working via an umbrella company or about setting up a limited company our experienced team can help clarify things further. Get in touch via our [website](https://sg-accounting.co.uk/contact/) or call us on 01962 867550.*** **Categories:** New to contracting, Umbrella **Tags:** New - Guide, New - Service --- ### [What to consider when choosing a business bank account](https://sg-accounting.co.uk/blog/choosing-business-bank-account/) **Published:** July 10, 2018 **Author:** Kerry Newman **Content:** When forming a limited company, we strongly advise you to open a bank account that will be solely used for the business. Whilst, this isn’t a legal requirement, it will make managing the company’s money that much easier. It is worth taking the time to choose a bank that you feel you can use for the long term, as switching accounts can be a real headache. Here is what you need to consider when finding the best business bank account for your limited company. ## What options are available for business bank accounts? ![A selection of business credit cards in the back pocket of blue jeans](https://sg-accounting.co.uk/wp-content/uploads/2018/07/creditcards.jpg "creditcards | SG Accounting") Nearly all high street banks offer business banking. It’s a good idea to also look at lesser known banks to see what they can offer. Some that come recommended are Handlesbank, a Swedish bank who has around 128 branches in the UK and MetroBank who has around 50 branches in the UK. ### What to consider The easy option when looking to open a business bank account is to use the bank that handles that your personal banking. However, this could cost you money in the long run as they may apply high fees. It is better to do your research and ask: ## What are your fees? Most banks offer an assortment of enticements to get people to sign up. The most common being an initial period of free banking, lasting around one or two years. Whilst it’s easy to be drawn in by the offer of free banking, you need to understand what the fees are once this period is over. Banks levy charges in different ways. Some have a flat fee they charge each month, others levy charges for depositing money into the account by cheque. To keep costs down, we advise that you try to calculate how much money will be going into the account on a monthly basis and how it will be paid. If you have customers who continue to pay you by cheque, make it easy for them to pay by debit or credit card. Another question to ask the bank is if they pay interest on balances. Some banks do, and others don’t. Interest rates on deposit accounts are generally low. They do tend to be a little higher on savings accounts. Which is useful if you are planning on opening a separate account for your tax liabilities. ## Are you near me and when are you open? ![Woman is banking online with mobile phone. She use credit card and the smartphone.](https://sg-accounting.co.uk/wp-content/uploads/2018/07/mobile-banking.jpg "Mobile Banking | SG Accounting") If you’re comfortable with online banking, you’ll have little need to visit a branch. However, if you prefer to visit the branch or need services that are only available instore then you should consider how easy it is to get to a branch. The standard opening hours for banks in the UK is 9 am to 5 pm. If you need access outside of these times, check if they offer extended opening hours. ## How do I set up a business bank account? What you’ll need to open a business bank account will depend on the bank’s rules. Typically, you will be asked to present: - Name and addresses of the company directors - Photo ID, like a passport or driving licence - Proof of date of birth, nationality and residency status - Limited company details - Proof of address - Certificate of incorporation - Letter from your accountant - Letter from HMRC or certificate - Personal current account details We feel it’s important to point out that most banks require you to visit a branch to open a business bank account. Depending on what appointments are available you may have to wait some time to do this. So, the earlier you can do this the better. ***If you need further guidance on how to open a business bank account, give us a call on 01962 867550 and we can answer any questions you may have.*** **Categories:** Finance, New to contracting **Tags:** New - Guide, New - Service --- ### [Bookkeeping tips for contractors](https://sg-accounting.co.uk/blog/bookkeeping-tips-contractors/) **Published:** August 7, 2018 **Author:** Kerry Newman **Content:** Bookkeeping is the cornerstone of accounting. Get it wrong and not only could you be in trouble with HMRC, but you could misjudge the financial position of your limited company. In this article, we discuss the integral role that bookkeeping plays in a business and we lay out our top contractor bookkeeping tips. ## Pay attention to the numbers ![Calculator and calculations](https://sg-accounting.co.uk/wp-content/uploads/2018/08/calculator-385506_1280.jpg "calculator-385506_1280 | SG Accounting") Bookkeeping and accounting are frequently used interchangeably. In fact, bookkeeping forms part of the accounting process. Bookkeeping is the recording, storing and retrieving of financial transactions for a company. Information that it is typically recorded through the bookkeeping process includes: - Billing for goods or services to clients - Recording invoices from suppliers - Payment to suppliers - Recording receipts from clients - Processing employees’ wages - Recording depreciation entries One of the reasons for keeping organised and accurate records is that by understanding the company’s financial position you are better placed to plan and manage its cashflow. Bookkeeping can be time-consuming and at times it may be tempting to ‘put it off’ to another day. To help ease the pain of bookkeeping, these are our top tips: ## Understand what records you need to keep ![A long series of files, folders and records](https://sg-accounting.co.uk/wp-content/uploads/2018/08/files-records.jpg "files-records | SG Accounting") As a director of a limited company, HMRC requires you to keep Accounting Records, which amongst other things, includes details of money spent and received by the business. HMRC does not stipulate how these records must be kept. This is entirely up to you. You can choose to store them on an app, online or detail them using an Excel spreadsheet. Whatever method you use, it is good practice from the outset to keep them organised and to get into a habit of reviewing them regularly. ## Be aware of time frames for record keeping If HMRC feels they have a basis for investigating your limited company, they can ask you to produce records that go back six years. If you choose to keep paper records, that’s a lot of paperwork to store. To prevent your home office getting over run with piles of paperwork, switch over to digital records. By storing information in the cloud, there is less risk of things getting lost. As long as you remember to back up your files! ## Invest in tech to make life easier ![iPhone apps](https://sg-accounting.co.uk/wp-content/uploads/2018/08/apps.jpg "apps | SG Accounting") There is an app for everything these days, and there is no shortage of apps that can help simplify your bookkeeping and accounts. One of the biggest benefits of using an app to record and track your financial records is that you get access to real-time data anywhere at any time, as long as you have internet access. This is perfect for contractors who work have to travel a lot or who are frequently away from home. ## Find an accountant that works for you ![Professional accountant answering the phone at her desk](https://sg-accounting.co.uk/wp-content/uploads/2018/08/professional-woman-1.jpg "professional woman | SG Accounting") Let us demystify a myth about contracting. Contracting is not lonely, you’ll find that there are plenty of people who are willing to help and offer advice. But, when it comes to bookkeeping and accounting, we strongly recommend that you find an experienced contractor accountant, who you can work with. If you’ve fallen out of love with your current accountant and are looking to move, you might find our article ‘[Switching Contractor Accountants](https://sg-accounting.co.uk/blog/switching-contractor-accountants/)’ an interesting read. ***If you’re a contractor who is struggling to keep on top of your bookkeeping or if just don’t enjoy the process and are looking to pass it on someone who does. Look no further! Give us a call on 01962 867550 or send us a message through our [website](https://sg-accounting.co.uk/contact/), and together we can choose an accounting package that is best suited to you.*** **Categories:** Finance, New to contracting, Running your business --- ### [Flat Rate Scheme: What to do if you are on the wrong trade sector](https://sg-accounting.co.uk/blog/flat-rate-scheme-wrong-trade-sector/) **Published:** August 14, 2018 **Author:** Kerry Newman **Content:** The VAT Flat Rate Scheme was introduced to simplify the process of calculating VAT returns. The premise of the scheme is that you pay a fixed rate of VAT based on which trade sector your business falls into. However, choosing the correct trade sector is not always as straightforward as it sounds and could cost you money if you get it wrong. ## Overview of the Flat Rate Scheme (FRS) ![Bearded man concentrating at desk in front of a laptop](https://sg-accounting.co.uk/wp-content/uploads/2018/05/concentraton-at-desk.jpg "concentraton at desk | SG Accounting") The Flat Rate Scheme was introduced in 2002 as a way for small businesses to simplify their sales and purchase records. If you are VAT registered and your business has a taxable turnover less than £150,000 a year, you are entitled to join the scheme. In practice, it’s a simple scheme. You add VAT at the standard rate (20%) to your customer’s invoices but pay over to HMRC the amount of VAT calculated at the rate that is associated with your chosen trade sector. There are over 50 trade sectors listed on [HMRC’s website](https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay). ### Example: You bill your client £25,000. You charge VAT at 20% =£30,000 You work as a Structural Engineer, so your flat rate percentage is 14.5% Your flat rate payment is £30,000 x 14.5% = £4,350 ## Choosing your trade sector HMRC’s advice for businesses is to choose the trade sector that best matches the activities of your business. In some cases, this is quite simple but there are instances where the activities of the business are relevant to multiple sectors. If you are struggling to come to a decision you can ask HMRC for guidance but ultimately the decision falls with you. We strongly recommend that you get guidance from an experienced accountant, like ourselves, who is familiar with the Flat Rate Scheme before finalising on a trade sector. We’ve been working with limited companies for over 20 years and during this time we’ve come across businesses who have multiple income streams. What do you do then? In this instance, you must base your choice on your main source of income. ## Introducing limited cost traders To cut down on the perceived abuse of the Flat Rate Scheme, in 2017 The Chancellor introduced a new facet to the FRS scheme, a limited cost trader. In HMRC eyes a business is a limited cost trader if: - it spends less than 2% of its VAT-inclusive sales on goods in a quarter, or, - more than 2% of its VAT-inclusive sales but less than £250 in a quarter on goods A business that is classed as a limited cost trader will need to apply a 16.5% flat rate percentage to its VAT inclusive sales when calculating its VAT liability. ## **What to do if you get the trade sector wrong** ![Worried character with an image of a sad face](https://sg-accounting.co.uk/wp-content/uploads/2018/08/worried.jpg "worried | SG Accounting") If you do find that you have chosen the wrong trade sector you may end up paying too much or too little VAT. Paying too little could see you having to pay a large VAT bill later on. If you’ve paid too much VAT, you may be able to ask HMRC to make an adjustment (depending on the amount of overpayment) on your next return. If you feel you have chosen the wrong trade sector, as long as you can show it was reasonable at the time to choose that sector then HMRC can’t come back to you and disagree and demand any additional VAT that may be due. Once, the mistake has been highlighted, going forward you must use the correct percentage. ***Our experience has shown that the nature of work that contractors do can make it hard for them to choose the correct FRS trade sector. Before making your final decision, give our VAT team a call on 01962 867550 to make sure you are making the right choice.*** **Categories:** Tax **Tags:** Switching - Service --- ### [How to write the perfect invoice](https://sg-accounting.co.uk/blog/how-to-write-perfect-invoice/) **Published:** August 28, 2018 **Author:** Kerry Newman **Content:** If you decide to work as an independent contractor, one of the tasks you will need to familiarise yourself with is the preparation and issuing of invoices for the services you have provided. Ensuring the invoice contains all the necessary information will make it easier for your client or agency to action payment. ![Female sitting in front of a calculator and an invoice](https://sg-accounting.co.uk/wp-content/uploads/2018/08/invoice.jpg "invoice | SG Accounting") If you’ve never had to issue an invoice before or have forgotten how to do it, here is a checklist on what should be included on a contractor invoice. ## Top things to remember when writing an invoice: 1. **At the top of the document clearly show the word ‘Invoice’**. It may seem like an obvious thing to put, but the accounts department could be handling hundreds of invoices each week and without clearly showing it is an invoice it could be missed or ignored. 2. **A unique invoice number**. It is entirely up to you what you use. Most contractors choose to use a combination of letters and numbers. It is probably a good idea to avoid putting 001. This is very generic and if you do have to contact the accounts department for any reason, it will be easier for them to find your invoice if the invoice number is unique. 3. **Add the date that the invoice was issued**. 4. **Details of your limited company.** This includes the company’s name, company number, registered office address, where the company was registered, contact telephone and email address. 5. **Your company logo**. This can portray a more professional image, but it isn’t compulsory to include this. 6. **Details of the client/agency.** Their name, address and email address. 7. **VAT registration number** (if you are registered for VAT): Include this under your limited company address. 8. **A detailed description of the services you have provided**. 9. **Breakdown of the services in units**: If you work a set number of hours each week, this should be detailed as; 40 hours x £100 p/h. 10. **Detail the period when the services were provided**: e.g. IT Consultancy – 23rd July – 27th 11. **The total amount charged**. 12. **The total amount charged plus VAT** (if applicable) 13. **Payment details**: These details relate to your business bank account. You need to include the name the account is in, sort code and account number. An extra piece of information you could include on the invoice is your payment terms and fees you may apply for late payment. Your client may also instruct you to add their PO (Purchase Order) number on the invoice and without it they may not be able to pay your invoice. We recommend that you check with your client or agency at the start to see if they need a PO number added to the invoice. ## How to prepare an invoice What method you use to prepare an invoice is up to you. There are plenty of templates on the web that allow you to add your own details. ![Computer displaying an invoice created by FreeAgent](https://sg-accounting.co.uk/wp-content/uploads/2018/08/free-agent-invoice.png "free-agent-invoice | SG Accounting")FreeAgent is all-in-one accountancy software that can sort invoicing for you too. If you are looking for a more streamlined process, you could invest in an accounting software that enables you to prepare and send invoices electronically. Accounting software will cut down the time spent on preparing invoices as most allow you to create recurring invoices – great if you are working on a long-term contract with a client. ## Need a hand? We can help ***We offer a range of accounting packages to suit your needs. Contact us on 01962 867550 to arrange an initial face to face meeting and to find out more about the services we offer to contractors.*** **Categories:** New to contracting, Running your business --- ### [Best pension plans for contractors](https://sg-accounting.co.uk/blog/best-pension-plans-for-contractors/) **Published:** September 10, 2018 **Author:** Kerry Newman **Content:** The flexibility of being your own boss comes with a lot of benefits, but there are also some downsides to consider as well. One of which is, you do not receive a company pension. As specialist [contractor accountants](https://sg-accounting.co.uk/), we strongly advise all our clients to start paying into a pension scheme as soon as they can. As the later you leave it, the less money you will have to draw on when you come to retire. As income from self-employment can be erratic, paying large sums on a regular basis into a pension scheme, may not be a viable option for everyone. When looking at pension schemes and pension providers it is important to look for one that is flexible. Whatever you plan to do on your retirement, whether it be sitting on a beach in sunny Spain, or hiking up Snowdonia, here is what you need to know about contractor pensions. ## Types of pensions available to contractors Contractors only have access to private pension schemes. A private pension is where you make payments during your working life and make withdrawals from the scheme when you retire. ![Named file in filing draw reading pension](https://sg-accounting.co.uk/wp-content/uploads/2018/09/pension.jpg "Print | SG Accounting") There are two types of private pension schemes; Stakeholder and Self-invested Personal Pension (SIPP). ## Stakeholder pension A Stakeholder Pension is one of the most popular types of pensions for contractors as they offer flexibility around the amount of money that can be paid in. The money that you contribute to a stakeholder pension is usually invested in a range of stocks and shares, which is designed to grow your investment. Upon retirement (or once you reach 55) you can access the money. ## Self-invested Personal Pension (SIPP) SIPP’s offer greater flexibility in the management of funds. You can decide to change funds when you see fit in order to achieve better returns on your investment. This type of pension is better suited to someone who has a good level of understanding of investments. Or, if you prefer you can assign an Investment Manager to manage the funds for you. Obviously, there is a cost associated with this, so you pay higher charges with a SIPP than with a stakeholder pension. ## Consolidate your existing pensions If you come to contracting later on in your career, you may already have pension schemes in place from previous employers. Running several pension schemes can be costly, as you will be paying management fees and charges on each pension scheme. Plus, it is also difficult to keep track of how much you have invested in each scheme. ![growing finances through stacks of coins](https://sg-accounting.co.uk/wp-content/uploads/2018/09/contractorpensions1.jpg "Print | SG Accounting") If you are in this situation, we recommend that you seek professional advice from a financial advisor who deals with contractors. The advisor will be able to review your current position and tell you if you will be better off consolidating your existing schemes into fewer schemes. Not only will this cut the management fees associated with your pensions, it will be easier for you to manage when you do come to retire. **Before making any changes to your pension, you should seek guidance from a financial advisor who is experienced in the contractor sector. If you are looking to engage with a financial advisor we will be happy to recommend someone, give us a call on 01962 867550.** **Categories:** Finance, New to contracting --- ### [5 reasons to love being an IT contractor](https://sg-accounting.co.uk/blog/5-reasons-love-being-it-contractor/) **Published:** September 18, 2018 **Author:** Kerry Newman **Content:** Being a permanent employee means a stable income, a sturdy career path and job security. Right? Well not always. The uncertain economic environment means companies are less keen on hiring permanent IT staff. Instead, they favour the flexibility that hiring temporary or contract staff can offer. The ‘tech’ sector is booming and now is a great time to become an IT contractor. If you’re thinking of moving away from permanent employment, here are our five reasons to love being an IT contractor: ## 1. Broaden your experience As a permanent employee, you are given the opportunity to hone your skills in a particular area. As your career progresses you may find that you continue to develop your skills within a particular industry. ![female contractor working](https://sg-accounting.co.uk/wp-content/uploads/2018/09/ITcontractorwoman.jpg "ITcontractorwoman | SG Accounting") As a contractor, it is easier to transfer your valuable skills to different industries. Each project has its own unique challenges and rewards. No one project is the same, and the likelihood of you getting bored, or feeling pigeon-holed is greatly reduced. ## 2. It’s no longer all about London One of the growing areas of IT is IoT (Internet of Things). It is so huge that experts predict that by 2020, nearly half of all new businesses will be run on IoT. Whilst London is still regarded as the UK’s ‘tech-hub’, there are growing opportunities happening in cities around the UK. Research conducted for the Tech Innovation Index has shown that following London the five areas with the best opportunities for tech jobs are: Edinburgh, Manchester, Glasgow, Brighton and Cambridge. ## 3. Money, money, money It’s well known that contractors get paid more than their employment colleagues. Whereas employees are entitled to holiday, sick, maternity and paternity pay and employer pension contributions, contractors aren’t entitled to any this. They have to fund these things themselves. The good news is that in the sectors where the demand for skilled IT contractors is high, this has also pushed up the day rates that contractors can ask for. Our article, [‘The 10 best paying jobs for contractors’](https://sg-accounting.co.uk/blog/10-best-paying-jobs-contractors/) shows that a Senior IT Manager can demand an average day rate of £570 and a contractor working in Enterprise Architecture can ask for £505 per day. ## 4. Choose how you want to live your life The average leave entitlement for a permanent employee is 25 days. This is not much when you consider you have to try and squeeze in a summer holiday, Christmas, birthdays and days off to complete personal tasks. ![IT Contractors get the most holiday so why not spend it on a dec chair in the sun?](https://sg-accounting.co.uk/wp-content/uploads/2018/09/deckchair.jpg "Print | SG Accounting") What if you wanted to take off two or three months to travel or to undertake a personal project? As a contractor, you don’t have to worry about an employer refusing your request for leave. You are the boss, and you decide when you work. ## 5. Do the work you want Working as an IT contractor does involve a certain level of adjustment. It is your responsibility to secure new contracts, which can involve building a personal brand and putting yourself out there to get your name known. It may not be something that comes naturally to you, but the benefits are worth it as it gives you the option to work on projects that interest you. As a contractor, interviews become a two-way process. You are assessing the company as much as they are assessing you. They are looking for evidence that you have the skills to do the work, and you may be looking for signs that they are an organisation who is open to new ideas and processes. ### Need a hand? If you are an IT contractor who is looking for a proactive accountant with a personal touch, get in touch with us on 01962 867550, or send us a message through our website. **Categories:** New to contracting --- ### [Do I need an accountant as a contractor working through my limited company?](https://sg-accounting.co.uk/blog/accountants-for-contractors-working-through-limited-company/) **Published:** October 9, 2018 **Author:** Kerry Newman **Content:** As an independent contractor working through your own limited company, your days are mostly spent working on your client’s projects. The last thing you want to do after a busy day is to sit down and look over your accounts and figure out what tax needs paying and when. One way to avoid this is by hiring an experienced contractor accountant to handle these matters on your behalf. Whilst there is no legal requirement for you to use an accountant for your limited company, we believe the following reasons explain the benefits of doing so: ## Free up your time ![Man looking at time on watch with computer in back ground.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/Manlookingattimeonwatch.jpg "Manlookingattimeonwatch | SG Accounting") Do you have much spare time? Probably not! Most of us don’t these days. Which means you may not have the time to get fully up to speed with the multitude of tax allowances and reliefs that are available to limited companies. And, if you have spent time getting to grips with the UK’s complex tax system, you may find that changes are announced that makes the information you have diligently spent time learning, redundant. Hiring an accountant who understands how a limited company operates will save you time and possibly money in the long run. ## Remove the stress of dealing with HMRC It is possible that at some time HMRC may feel they need to get in touch with you. For example, they could have a query relating to your tax code, tax return or corporation tax. From experience, we know that contractors find dealing with HMRC worrisome, stressful and time-consuming. Plus, if you find that you have made a mistake on your tax return or have submitted information late, it can be costly as you can be issued with a penalty. As experienced contractor accountants, we can deal with most HMRC enquires on your behalf and also make sure that information is submitted correctly and on time. ## Validate who you are ![Women sitting on laptop sorting out her tax with the HMRC](https://sg-accounting.co.uk/wp-content/uploads/2018/10/womansittingonlaptop.jpg "womansittingonlaptop | SG Accounting") You know who you are, and if you choose us to become your accountant, we will know who you are as well. But, there may be times when you have to prove your identity to others, like a landlord, mortgage lender or pension provider for instance. So, when the time comes and you are ready to purchase a property or move into a rental property, your accountant should be willing to provide you with a suitable reference. ## Accountants have specialist knowledge As experienced contractor accountants, most of our time is spent working with numbers, but we do more than tallying up figures. We use our specialist knowledge and years of training to analyse your figures, so we can offer you expert advice on things like cashflow and how to minimise your tax liabilities. We can also offer guidance on how to make better use of expenses and advise you if you need to become VAT registered. ## Next Steps? ***If you feel you would benefit from our expertise, give us a call on 01962 867550, or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/) ***and one of our Directors will call you back.*** **Categories:** Finance, New to contracting, Tax --- ### [The Budget 2018: here’s what you need to know](https://sg-accounting.co.uk/blog/the-budget-2018-heres-what-you-need-to-know/) **Published:** November 5, 2018 **Author:** Kerry Newman **Content:** The Chancellor, Philip Hammond stood up at 3.30 pm on Monday 29th October to make his third budget speech and more importantly his last one before the UK leaves the EU. We’ve worked our way through his lengthy list of announcements and picked out the key points that as a contractor you need to be aware of. ## The Economy Following a time of slow growth, it finally looks like things are on the up for the UK’s economy. The forecast for 2019 has been upgraded from 1.3% to 1.6%. Subsequent forecasts have been raised to 1.4% (2020), 1.4% (2021), 1.5% (2022) and 1.6% (2023). The Chancellor also announced that wage growth is the highest it has been for ten years. ## Personal Tax ![Happy IT worker, personal tax rate has increased.](https://sg-accounting.co.uk/wp-content/uploads/2018/11/PersonalITWorker.jpg "PersonalITWorker | SG Accounting") Some welcome news from the Chancellor, the personal allowance from 6th April 2019 will increase from £11,850 to £12,500. This increase is happening one earlier than planned. Some other good news for contractors is that from 6th April 2019 the higher rate tax threshold will increase from £46,350 to £50,000. The basic rate will also increase, going up to £37,500 for 2019/20. It was also announced that from April 2019 the National Living Wage will increase by 4.9% from £7.83 to £8.21. ## VAT The level at which you must register and pay VAT will remain at £85,000. This threshold will remain unchanged for the next two years. VAT is an extremely complicated area of tax. If you are unsure if you need to register your limited company for VAT, give us a call on 01962 867550 for further clarification. ## Intermediaries legislation – IR35 We’ve saved the biggest impact to the end. The Chancellor has confirmed that the controversial IR35 changes that were introduced into the public sector in 2017, will be rolled out to the private sector from 6th April 2020. The upside is that this is one year later than many expected, giving contractors and clients extra time to prepare. ### Why is it needed? ![Question posing: Will all contractors be affected?](https://sg-accounting.co.uk/wp-content/uploads/2018/11/Howwillthiswork.jpg "Howwillthiswork | SG Accounting") HMRC believe that there is widespread abuse of non-compliance with IR35. If left untouched they estimate it will cost them around £1.2 billion per year by 2023 in lost revenue. ### Will all contractors be affected? The change will affect any contractor working through a Personnel Service Company (PSC) such as a limited company and who are engaged with medium to large businesses. We expect a more detailed definition of what constitutes a ‘medium to large business’ to be released sometime in the next few months. ### How will it work? Basically, the reform means the engager or client will become responsible for determining your IR35 status. If they decide that you are working inside IR35 you will be taxed at source (like an employee). ### What can you do? Firstly, don’t panic. The change doesn’t come into effect until April 2020. Up until then, you remain responsible for determining your IR35 status. But, there are things you can do in the meantime to prepare yourself for the change. Most importantly, engage with an experienced contractor accountant (like us) if you haven’t done so already. We’ll sit down with you and review your working practices and advise you on the best approach going forward. To speak to one of our directors, give us a call on 01962 867550. **Categories:** News --- ### [Pensions for contractors with limited companies](https://sg-accounting.co.uk/blog/pensions-for-contractors-with-limited-companies/) **Published:** November 5, 2018 **Author:** Kerry Newman **Content:** Retirement may be something you are longing for or something that you dread. Whichever one you are, the earlier you start planning for it the better. ![Business people holding a bank book.](https://sg-accounting.co.uk/wp-content/uploads/2018/11/bank-bankbook-banking-1020313.jpg "bank-bankbook-banking-1020313 | SG Accounting") The age at which we can receive a state pension is rising (66 years from 2020, with further increases planned) and on average the majority of us are living longer. Therefore, it’s important that you start saving now so you can enjoy your future years in comfort. Saving money into a pension can be easier if you are a contractor that operates via your own limited company, as you have access to some substantial tax advantages. ## **Contractor pensions** As a contractor working through a limited company, you can choose to pay into a pension scheme either one of two ways. Firstly, by making personal pension contributions, or, secondly, contributing into a pension scheme through your limited company (also known as employer contributions). Both options come with their own tax advantages. Let’s look at them in detail. ## Personal pension contributions If you make personal pension contributions, you receive tax relief on these at the rate at which you pay income tax. For example, as a basic rate tax-payer; you will only pay £80 for a £100 pension saving. This is not a bad saving. However, there are limits on the amount you can pay into a pension whilst continuing to receive tax relief on these payments. The current limit is 100% of your income, up to an annual limit of £40,000 (for tax year 2018/19). The current lifetime allowance for pension contributions is £1 million. If you have a large sum of money that you would like to invest into a pension you may be able to apply for the ‘carry forward rule’. This enables you to make use of unused allowances from the past three consecutive years as long as you were a member of a registered pension scheme. ## Personal pension contributions as a director of a limited company A note of caution if you plan on making personal pension contributions. As a contractor, you will probably have been told that the most tax efficient way to work is to take a small salary and the remainder through dividends. But as tax relief on personal contributions is calculated on your salary alone, your tax relief will be relatively low. You can overcome this, by either increasing your salary or by paying into a pension scheme straight from your limited company. ## Contributions through a limited company As a director of a limited company, you have the option of paying pre-taxed income straight into a pension scheme. The benefit of this is that pension contributions are classed as a ‘legitimate business expenses’ and thus it can be used to reduce your taxable profits. If you are unsure what a legitimate business is, you can find detailed clarification in our article ‘[What you need to know about expenses](https://sg-accounting.co.uk/blog/ask-an-expert-expenses/)’. Additionally, employers (as a director of a limited company you are both an employer and employee of the company) don’t pay National Insurance Contributions on pension contributions. So, this equates to a further saving of 13.8% for the tax year 2018/19. ***Before setting up or making changes to your pension scheme, you should seek professional advice. If you’re looking for advice on how to make contributions into a pension scheme through your limited company, give us a call on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance --- ### [Private sector IR35 reform – what it means for contractors](https://sg-accounting.co.uk/blog/private-sector-ir35-reform-what-it-means-for-contractors/) **Published:** November 27, 2018 **Author:** Kerry Newman **Content:** When the reform to the Intermediaries Legislation (also referred to as IR35) was introduced to the public sector in April 2017, many in the industry speculated it wouldn’t be long until it was extended to the private sector. Well, they were right. In his last Budget speech before Brexit, Chancellor, Philip Hammond announced that plans had been passed to introduce IR35 reforms to the private sector. We discuss what this means for contractors working through their own limited company for private sector clients. ## **The reason behind the reform** It has long been a belief of HMRC that there is what they call ‘widespread abuse’ of non-compliance of IR35. This has coined the term ‘disguised employment’. This is where an employer hires an individual on a self-employed basis (thus saving money through not having to pay Employers National Insurance Contributions or use a payroll software) when they should be using an employment contract. The individual also benefits as they can make significant tax savings by working through their own limited company. ![A calculator, pen and graph, to calculate the loan charge.](https://sg-accounting.co.uk/wp-content/uploads/2018/09/Calculator.jpg "Calculator | SG Accounting") HMRC hail reforms introduced to the public sector in April 2017 as a success. They have the opinion that it has reduced non-compliance as well as contributing an additional £410 million through income tax and NIC. If they chose to ignore non-compliance in the private sector, HMRC believe they could lose around £1.2 billion per year by 2023. By pushing ahead with the reform in the private sector, they believe that the 10% of people who abuse the system will no longer be able to do so. ## **Who the reform will affect** There are different numbers floating around, but it is estimated the reform will affect around two million contractors working through their own limited company and who are engaged with private sector clients. It will affect contractors working across multiple sectors, including IT, Engineering and Marketing for instance. ## **What it means for contractors** As with the public sector, the responsibility for determining the IR35 status of a contract will shift from the contractor themselves to the engager or end-client, but only if they are deemed as a medium or large business. As yet, there is no official definition of what constitutes a medium or large business. However, if it follows the definition set out by the Companies Act 2006, it could be a business that meets two of the following criteria: - A business with a net turnover more than £10.2 million - A business with a balance sheet total more than £5.1 million - A business that has more than 50 employees It’s important to point out the method for determining the IR35 status is not changing, so effectively if you are outside of IR35 now you should remain to be so after 6th April 2020. But, if come 6th April 2020 you are deemed as being inside IR35, you will be taxed at source, like if you were an employee. ## **What to do next?** ![It contractor thinking about IR35.](https://sg-accounting.co.uk/wp-content/uploads/2018/11/ITcontractorthinking.jpg "ITcontractorthinking | SG Accounting") If you think you will be one of the two million contractors who may be affected by the reform, you should seek professional advice from an experienced contractor accountant immediately. Even if you think you won’t be affected by the reform, we recommend that you have regular contract reviews to make sure you are on the right side of IR35. We offer this service as part of our monthly accounting packages. Give us a call on 01962 867550 to discuss which package will be most suitable for you. **Categories:** IR35, News **Tags:** IR35 - Guide, Switching - Service --- ### [Late payments: what are your rights?](https://sg-accounting.co.uk/blog/late-payments-what-are-your-rights/) **Published:** December 4, 2018 **Author:** Kerry Newman **Content:** Working in the service industry means that at some point you will encounter a client who fails to pay your invoice on time. Chasing clients for unpaid invoices can be stressful and it also wastes a lot of time. On top of this, it can also cause you to suffer cashflow problems. We look at how you can reduce late payments and discuss your rights under the ‘Late Payment of Commercial Debts (Interest) Act 1998. ## Who can be affected by late payments? As a contractor, we hope that you haven’t had to deal with late paying clients too often. Unfortunately, there are clients who seem to think it is OK to continuously pay contractors late. The chances of this happening to you are less if you work through a recruitment agency as you invoice the agency for payment, not the client directly. However, if most of your work comes from direct clients, unfortunately, you may find yourself at some point in time, chasing your client for payment. ![Calculator and hand with bills in background.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/alone-bills-calculator-1253591.jpg "alone-bills-calculator-1253591 | SG Accounting") ## Tips for reducing late payments By taking into consideration some, or all of the following tips, you will hopefully reduce the number of late payments you receive: 1\. Stipulate your payment terms upfront – if you’re working directly with a client you have the freedom to choose your own payment terms. For example, 7 or 14 days. If this is not stated on your invoice it may be assumed, it is 30 days 2\. Ask for an initial payment – if you’re providing a service for a fixed fee, consider asking for an upfront initial payment of between 25% to 50%. This can help you manage your cashflow and reduce your financial risk if the client is late in paying 3\. Offer an incentive – encourage your clients to pay promptly by offering a discount on the next invoice if they pay the current one within a specific timeframe 4\. Fill in the gaps – one of the biggest reasons for delayed payment is because some information is missing from the invoice. Our article, [‘How to write the perfect invoice’](https://sg-accounting.co.uk/blog/how-to-write-perfect-invoice/) outlines everything you need to include 5\. Invest in tech – if you are issuing your invoices manually maybe it’s time you upgraded to an accounting software, like FreeAgent or Xero, to help with the management of invoices. ![Man looking at time on watch with computer in back ground.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/Manlookingattimeonwatch.jpg "Manlookingattimeonwatch | SG Accounting") If a client continues to pay your invoices late, remain calm but be proactive. Chase them up with a politely worded email and with a call to their accounts department. We find this usually does the trick. ## Your rights with unpaid invoices If you have not set out in your contract, the specifics of interest that you will apply to late payments, you can choose to apply the ‘Late Payments of Commercial Debts (Interest) Act 1998’. This stipulates that if your invoice is not paid on time, you can claim interest, compensation and reasonable costs for collecting the debt. The Act states that interest can be applied at a rate of 8% above the Bank of England’s base rate. Compensation can be levied at a rate of £40 to £100 per invoice, depending on the invoice value. Further details on the Late Payments of Commercial Debts (Interest) Act 1998 can be found on the .gov website. ### As accredited FreeAgent experts we are best placed to show you how to get the most out of the FreeAgent accounting software. If you’re interested in hearing how the FreeAgent software can help with the management of invoices and payments amongst other things, give us a call on 01962 867550. **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [Making tax digital from April 2019](https://sg-accounting.co.uk/blog/making-tax-digital-from-april-2019/) **Published:** December 12, 2018 **Author:** Kerry Newman **Content:** With effect from 1st April 2019 HMRC requires that businesses for whom VAT returns are mandatory file their returns in line with the new Making Tax Digital (MTD) requirements. If your taxable turnover is greater than the VAT registration threshold of £85,000 then this will apply to you. This new regime from HMRC means that you have to both keep records digitally and file tax digitally – no more typing figures directly into HMRC’s online portal! The new rules apply on your first VAT return period **starting** on or after 1st April 2019, so: | **Schedule** | **Due date** | |---|---| | VAT return period ending 30th June 2019 | 7th August 2019 | | VAT return period ending 31st July 2019 | 7th September 2019 | | VAT return period ending 30th August 2019 | 7th October 2019 | If you currently file your returns yourself, it means that you may have to change the way in which you keep your records. If you use common accounting software (such as Freeagent, Xero, Iris, Sage etc.) then the ability to file digitally will be included if not already there – contact us if you need more information. If you keep paper records or use your own spreadsheets, you may need to look at changing to a different method. ![Contractor on computer making tax digital.](https://sg-accounting.co.uk/wp-content/uploads/2018/12/Contractormakingtaxdigital.jpg "Contractormakingtaxdigital | SG Accounting") If you use [SG’s](https://sg-accounting.co.uk/prices/) spreadsheet to provide your accounting information then you can carry on using this. As is common with HMRC, they are proceeding at their own pace. They are issuing information but because they are still developing their systems to cope with MTD, and due to the fact that they are still running pilot schemes, this information is changing and is not complete. One thing that HMRC have made clear though is that the switch to MTD will happen. This is a huge adjustment for both business and accountants, and we can assure you that this is very much a priority for us. We are working with both HMRC and software providers to ensure that we continue to provide the service you expect, and we will be providing updates as we get more detailed information. We will also be contacting our clients with further instructions once we have selected our software solution and advising what needs to be done to make this change as straightforward as possible. If you interested in finding out further details on Making Tax Digital, speak to us on 01962 454084 or send us a message via our [website.](https://sg-accounting.co.uk/contact/) **Categories:** News --- ### [Contractors in 2019: Trends to look out for in 2019](https://sg-accounting.co.uk/blog/contractors-in-2019-trends-to-look-out-for-in-2019/) **Published:** January 14, 2019 **Author:** Kerry Newman **Content:** A new year is an exciting time. New resolutions are made (and sometimes quickly broken), and new career goals are planned. If you’re an experienced contractor, you may be looking to branch out into a new area, or if you are new to contracting, you may be looking for your first contract. Whatever stage you’re at, a new year can also bring new rules and regulations that can impact your earnings. Here is a summary of the tax regulations that you need to be aware of during 2019 and beyond. ## 2019 Loan Charge One of the most significant pieces of legislation that comes into effect from April this year is the 2019 Loan Charge. This legislation will affect any contractor who has willingly or unwittingly used disguised remuneration schemes to reduce their tax liabilities. These schemes allowed contractors to take out loans from the business (with the majority of these loans not being repaid) instead of taking a salary which could be subject to Income Tax and National Insurance Contributions. The 2019 Loan Charge legislation will impact those who: 1. Arranged a loan on/after 6th April 1999, and where part or all of the loan remains outstanding as of 5th April 2019 2. Arranged a loan on 5th April 1999 and who would have fallen into the new disguised remuneration legislation The most significant part of the legislation is that HMRC has the power to tax members of such schemes dating back 20 years. If you think, you may be affected by the 2019 Loan Charge, contact us immediately to find out what steps you need to take next. ![Photo of calculator being used for accountancy](https://sg-accounting.co.uk/wp-content/uploads/2018/10/AccountingCalculator.jpg "AccountingCalculator | SG Accounting") ## Private sector contractors During the last Budget, the Chancellor finally confirmed the news that many had been speculating would happen – IR35 reforms will be rolled out to private sector contractors. From April 2020, contractors who work with medium or large businesses will no longer be responsible for determining their own IR35 status. This responsibility will shift to the end user – the client or agency. If it’s deemed you are working inside IR35, you will be taxed at source, similar to how an employee is taxed. If you’re impacted by this, we calculate it could reduce your take-home pay by as much as 25%. ## Making Tax Digital From April this year all businesses and organisations that are VAT registered must start to maintain digital accounting records. If you have been using a paper-based system, from April this year you will no longer be able to continue with this. Additionally, you must start submitting your VAT returns to HMRC using a functional and compatible software. Or, you can choose to appoint an agent to manage this on your behalf. ![Latest legislation affecting contractors](https://sg-accounting.co.uk/wp-content/uploads/2018/09/Manworkingonlaptop.jpg "Manworkingonlaptop | SG Accounting") If you’re interested to find out how we can help you with this, give us a call on 01962 867550. ## Dividend Tax During the budget that took place on 29th October 2018, we held our breath to see if the Chancellor would announce any further changes to the Dividend Tax. Luckily, he decided against reducing it any further, so for now, the Dividend Tax stands at £2,000, after having been reduced from £5,000 at the start of the 2018 tax year. ***Finding your away around the numerous tax regulations can be daunting. If you would like to discuss any of the points mentioned in this article in further detail, please contact one of our directors on 01962 867550. Or, if you would further information on our monthly accounting packages, send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/) ***and one of our directors will give you a call back.*** **Categories:** News --- ### [Is my private limited company IR35 compliant?  ](https://sg-accounting.co.uk/blog/is-my-private-limited-company-ir35-compliant/) **Published:** January 29, 2019 **Author:** Kerry Newman **Content:** Working as a contractor is an exciting career path, but it also involves understanding a plethora of tax regulations. One of the most complex areas of tax for contractors is the Intermediaries Legislation, otherwise known as IR35. Significant changes have been made to the Intermediaries Legislations over the last few years. It was announced that from April 2017, the IR35 status of all public sector contractors, was to be determined by the ‘engager’. This means the end client or agency. It was announced in the last budget that similar changes will be rolled out to contractors working for private sector organisations. These changes are due to come into effect from April 2020. So, it’s even more imperative that contractors understand this complex area of legislation. ![IT contractor looking at computer with coffee in hand.](https://sg-accounting.co.uk/wp-content/uploads/2019/01/adult-business-businesswoman-265036.jpg "adult-business-businesswoman-265036 | SG Accounting") ## **IR35 explained** The Intermediaries Legislation came into effect in April 2000 and it has become a controversial piece of legislation. It was introduced as a way of combating ‘disguised employment’. This is where an employee leaves their job on a Friday, only to return the following Monday doing the same job but this time under the guise of a contractor. It was felt that disguised employment was on the rise, particularly in the IT sector and HMRC was keen to combat it as it was costing them millions each year in lost taxes. ## How your IR35 status is determined Determining your IR35 status can be incredibly complex, and you should seek guidance from a contractor accountant who is highly experienced in this area. Like ourselves, for instance! In brief, when determining the IR35 status of a contract, we would look at your contract, terms of employment and working practices. If these are more aligned to how an employee works rather than a self-employed person, then it would be deemed that the contract places you inside IR35. The main areas that will be taken into consideration when determining your IR35 status are: ### **Control**: what extent are you under the direct control and supervision of the end client? ### **Substitution**: can you provide a substitute if you’re unable to perform the contract duties? ### **Mutuality of Obligation**: when the fixed contract term has finished, is there reasonable expectation that the contract will be extended? When responding to these questions, it’s imperative that you answer them honestly, as HMRC can check if they actually reflect the way you work. ## What it means to be inside IR35 ![IT Contractors thinking about how much it costs for an accountany](https://sg-accounting.co.uk/wp-content/uploads/2018/08/business-questions.jpg "business-questions | SG Accounting") If the terms of the contract and your working practices deem to place you as working inside IR35, you are allowed to use 5% of the contract value to cover the costs of running your limited company but the remainder of your income is subject to normal Income Tax and National Insurance Contributions. This means, that what you earn from the contract cut be cut by a substantial amount. ## **How to protect yourself** Even though the changes to the Intermediaries Legislation for contractors who work with private sector organisations don’t come into effect until April 2020, it’s never too early to make sure you are IR35 compliant. Starting from now, you should submit all new contracts for a full IR35 review. An IR35 review involves looking at your contract terms and working practices to make sure they are compliant. We are pleased to tell you that we can offer this service as part of our monthly accounting packages. If following the review, we think there are areas that could be improved, we’ll suggest ways to tighten these so there is less chance you will be caught inside IR35. ### ***To find out about monthly accounting packages or hear more about our IR35 review service, speak to one of our directors on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** New to contracting, Running your business --- ### [2019 Loan Charge](https://sg-accounting.co.uk/blog/2019-loan-charge/) **Published:** March 5, 2019 **Author:** Kerry Newman **Content:** With less than one month until the changes on outstanding disguised remuneration loans (also referred to as 2019 Loan Charge) kicks in, we take this time to give you the low down on everything you need to know. ## Background to 2019 Loan Charge The 2019 Loan Charge was announced in the 2016 Budget as part of the Finance Act \[2\] 2017. It specifically applies to people who use disguised remuneration schemes and who have not repaid or made arrangements with HMRC to pay any outstanding loans. Disguised remuneration schemes are deemed to be tax avoidance schemes. The most common one used is known as the Employee Benefit Trust (EBT), but there are others in existence. They were promoted on the basis that they could be used to avoid paying Income Tax and National Insurance Contributions as the money used in such schemes was classed as a loan. ![A calculator, pen and graph, to calculate the loan charge.](https://sg-accounting.co.uk/wp-content/uploads/2018/09/Calculator.jpg "Calculator | SG Accounting") It is estimated that around 50,000 people will be affected by the 2019 Loan Charge, with the vast majority (65%) working as Management Consultants in the IT sector. ## How the 2019 Loan Charge works The Loan Charge applies to loans that were made since 6th April 1999 (yep, that’s right, dating back 20 years!) and which are still outstanding as of 5th April 2019. However, if you are working towards paying off any outstanding loans or have contacted HMRC to agree on a repayment settlement, then the loan charge won’t apply to you. If not, then tax liabilities will automatically be added. To date, HMRC has agreed settlements worth in excess of £1 billion and surprisingly 85% of this amount has come from employers. If you have used a disguised remuneration scheme and have not settled repayment of the loan or made arrangements for repayment, you must contact HMRC immediately. You can call them on 03000 534 226 or email them on c.l.resolution@hmrc.gsi.gov.uk. ## What are your options? HMRC understand that you may not be in a position to repay the amount in one go. If you think you’ll find it difficult, you may be able to come to an arrangement to pay it back in stages. Help is available for those who are no longer in a scheme and whose taxable income for 2018/19 is less than £50,000. These people do not need to provide evidence of their income and they’ll automatically be able to spread their repayments over five years. Or, seven years if their taxable income is less than £30,000. For individuals whose taxable income for 2018/19 is over £50,000 or those who feel they need longer to repay the amount, they may be able to arrange a repayment plan by providing supporting evidence. ![Caution cone on a laptop.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/caution.jpg "caution | SG Accounting") ### **There are some firms who are promoting options that say they enable people to escape the Loan Charge. This is rubbish! And, such schemes could even be fraudulent. Your best option to avoid the charge is to repay the amount in full or contact HMRC to arrange a repayment plan.** If you are concerned you may be affected by the 2019 Loan Charge, speak to one of our Directors on 01962 867550 to clarify your position. We can then advise you on the next steps, including how to contact HMRC in regard to any amount that is outstanding. **Categories:** Finance, News --- ### [Our Managing Director’s take on the Spring Statement](https://sg-accounting.co.uk/blog/our-managing-directors-take-on-the-spring-statement/) **Published:** March 13, 2019 **Author:** Kerry Newman **Content:** The Chancellor has said before that the Spring Statement would be more of a fiscal state of the nation than an opportunity to announce new legislation but with the backdrop of the Brexit vote defeat last night and further votes happening over the next couple of days it could well have been a case of “all bets are off”. ![Brexit Flag missing a star.](https://sg-accounting.co.uk/wp-content/uploads/2018/10/brexit-eu-europe-113885.jpg "brexit-eu-europe-113885 | SG Accounting") There was, however, nothing new there of a micro economic nature for contractors and freelancers. Yes, everything is up in the air with Brexit and it is inevitable that Brexit will have an effect on the world of contracting…indeed it appears it already has with some companies engaging contractors moving operations out of the UK. The Office of Budget Responsibility published figures recently showing growth of 0.2% in the UK economy over the last 3 months however it was interesting to see that the services sector actually contracted by 0.2% in the same period. It’s clear that the uncertainty of the Brexit situation at the moment is damaging to the economy. Companies are holding back on making decisions or investments and again that has to have an impact on the contracting community. Whilst it was an unenviable job for Philip Hammond to deliver this forecast for the economy (especially with so many Brexit related variables at the moment) I wonder if there was a missed opportunity in this Spring Statement to “steady the ship”. Instead, there was a heavy focus on ensuring any wavering MPs are made aware of Hammond’s opinion on the negative effect a vote to leave without a deal tonight would have. Let’s see what happens over the next couple of days! **Categories:** News --- ### [Making a will as a contractor](https://sg-accounting.co.uk/blog/making-a-will-as-a-contractor/) **Published:** March 18, 2019 **Author:** Kerry Newman **Content:** We all know that we should make a will, yet figures released in 2018 by [Unbiased](https://www.yourmoney.com/retirement/60-people-dont-will/) show that a staggering 60% of UK adults (approximately 31 million people) don’t have a will. Reasons given for not making a will include “I’ll do it when I’m older”, “I don’t want to think about my death” and “I don’t need a will”. ![Man holding a pen in a suit.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/Manholdingpen.jpg "Manholdingpen | SG Accounting") This article explains what a will is, why it’s important to have one and the process of making a will as a contractor. ## **Why having a will as a contractor is important** A will is a legal document that sets out what you want to happen to your estate and who will be reasonable for the care of any dependents after your death. If you die without making a will you will be deemed as being intestate and your estate will be distributed according to the intestacy rules. There can be confusion over whether your partner will automatically inherit your estate. The law states that if you are not married or in a civil partnership your partner has no right to inherit your estate. Only, by having a will stating that you wish for them to inherit, can your estate be passed on to them. ![Hands together.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/Handstogether.jpg "Handstogether | SG Accounting") Another important reason to have a will is it can help reduce the Inheritance Tax that is due on the estate. Currently, Inheritance Tax is charged at 40% on the proportion of the estate that it is above the Inheritance Tax threshold (currently £325,000). With careful estate planning, you may be able to reduce the amount of Inheritance Tax that is due. ## **Steps involved in making a will** The following is a summarised version of the steps that is involved in making a will as a contractor: - ### **Value your estate** A simple method is to calculate the value of your assets (including things like property, savings, life insurance, investments, pensions, jewellery, antiques etc) and minus your debts (such as mortgage, credit card balances, overdrafts, loans etc) - ### **Decide who gets what** Be very clear on what happens to your estate. Some things to think about include; who receives what, if you want to leave money or property to charity, what happens if a beneficiary passes away before you - ### **Choose your executors** It’s not what you think! An executor of a will is a person who is responsible for distributing your estate after your death. Depending on the complexity of your will, being an executor can be a lot of work. So, take some time to choose someone who you can trust to do it properly - ### **Write your will** There are several ways to write a will. You could choose to do it yourself (although it can be costly if you make a mistake) or get a professional like a lawyer to write it for you. Other institutions like charities and banks sometimes offer a will writing service as well - ### **Sign the will** For your will to be valid you must sign the will in the presence of two independent witnesses who must also sign it in your presence. If a mistake is made during this process, the will becomes invalid - ### **Review your will regularly** It’s recommended that you review your will every three to five years as your personal circumstances may have changed in that time ***As detailed above it’s relatively simple making a will, so if you haven’t made one, think about doing it soon. If you’re not sure where to start we’d be happy to recommend some experienced professionals who can help you with it. Give us a call on 01962 867550 or send us a message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [What pensions can I get as a self-employed contractor?](https://sg-accounting.co.uk/blog/what-pensions-can-i-get-as-a-self-employed-contractor/) **Published:** March 26, 2019 **Author:** Kerry Newman **Content:** It’s simple, all the healthy food we’re consuming and the hours of exercise we’re doing is making us live longer. According to the Office of National Statistics, the life expectancy for a man in the UK is 79.2 years, and for a woman, it’s 82.9 years. ![Retired couple, looking over the sea.](https://sg-accounting.co.uk/wp-content/uploads/2019/03/retiredcouple.jpg "retiredcouple | SG Accounting") Whether you choose to spend your later years cruising around the world or hiking up mountains, it’s never too early to start saving for your twilight years. Here are the pension options that are available to you as a self-employed contractor: ## **State pension** By 2020 the age at which both men and women can claim the State Pension will increase to 66. And, between 2026 – 2028 this will have increased to 67. If you were to retire during the 2019/20 tax year and you qualify to receive the full State Pension, under the new single tier system, you could expect to receive £168.60 per week, or £8,767.20 per annum. The question you’ve got to ask yourself is; Will this be enough to support me through my retirement? If the answer is no, you should consider supplementing your State Pension with a personal pension. ## **Personal pensions** Personal pensions are deemed as ‘defined contribution’ pensions.’ This means the amount you’ll receive when you retire, depends on the amount you’ve invested and how well these investments have done. They’re relatively easy to set up – you decide how much you wish to invest, and the pension provider claims tax relief on these payments and adds it to your pot of money. Shockingly though, research by The Pensions Advisory Service shows that only around a 1/3 of self-employed people are paying into a personal pension scheme. This is despite the fact that generous tax relief is afforded to pension contributions. And, as a director of a limited company any employer contributions you make into a pension scheme can be deducted from your profits as they’re deemed as an ‘allowable business expense’. Now that we’ve convinced you of the benefits of a personal pension, which scheme should you choose? ### SIPP A self-invested personal pension allows you to choose which investments you put your money into, such as bonds, shares, investment trusts and even precious metals like gold. SIPP’s can easily be managed through online portals and are perfect for individuals who want to take a hands-on approach to the management of their pension and who have some experience of managing investments. ### Stakeholder pension Stakeholder pensions have been around since 2001 and are meant to offer individuals an alternative to costly and risky investments. The government has set a minimum number of standards which each scheme must meet, including capping charges at 1.5% per year for the first 10 years. Another draw of a stakeholder pension is their flexibility. Others can pay into it and you can transfer the funds held into another scheme. But they offer less investments choices and the funds tend to be low to medium risk, meaning the returns are less than what is offered by other pension schemes. ### NEST NEST or National Employment Savings Trust was set up by the government to give employers access to an easy to use auto-enrolment scheme. NEST is primarily for individuals who are employed, but self-employed people can also join. One of the draws of NEST was that it had relatively low charges, but as time has gone on other pension providers with better investment options have lowered their charges, which has made NEST less appealing. ***We understand it’s not a straight-forward decision choosing what type of pension is right for you. Before making any decisions, you should talk to an FCA registered Financial Advisor. Our directors will be happy to recommend one who has experience working with self-employed contractors. Give us a call on 01962 867550 or get in touch via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Finance --- ### [Research and Development tax credits explained](https://sg-accounting.co.uk/blog/research-and-development-tax-credits-explained/) **Published:** May 20, 2019 **Author:** Kerry Newman **Content:** The government wants UK companies to succeed. It’s great for employment and training and overall successful companies boost the economy. To help companies be successful the government provides an incentive in the form of tax credits, to companies who are involved in innovation. This incentive is provided through Research and Development (R&D) tax credits and this article explains what they are, who is eligible to make a claim and how they work: **What is R&D Tax Credits?** In brief, companies who invest in innovation or specifically in ‘*resolving scientific and technological uncertainties’* may qualify for R&D tax credits. This definition is purposefully broad, but it tends to include activities like trying to develop new products, processes or services or trying to improve existing ones. What surprises most people is that R&D tax credits are open to companies in all industries – from construction to digital transformation – as long as the project aims to make an advance in science or technology. ![Glasses with laptop.](https://sg-accounting.co.uk/wp-content/uploads/2019/05/glassesonalaptop.jpg "glassesonalaptop | SG Accounting") **Can I make a claim?** To make a claim for R&D tax credits, you must meet the following criteria: - The business is a UK limited company which is subject to Corporation Tax - You must have carried out qualifying research and development activities - You must be able to show proof that you have spent money on the project(s). This includes staffing costs, money spent on subcontractors and freelancers, costs of materials and consumables and money spent on software. What is worth noting, is that you make a claim for work done on your own project or work you did for a client. Plus, the project didn’t have to be successful in order for a claim to be made. **How R&D Tax Credits work** There are two R&D tax credit schemes. The SME R&D tax credit scheme is for SME’s. These are companies with less than 500 staff and either with a turnover less than EUR 100 million or EUR 86 million gross assets. Larger companies (with more than 500 staff and either with a turnover exceeding EUR 100 million or more than EUR 86 million gross assets) will have to make a claim with the Research and Development Expenditure Credit (RDEC). However, there may be factors like grants which prevent an SME making a claim with the SME R&D tax credit scheme. So, it’s always important to get professional advice. SME’s are able to claim up to 33% on every pound spent on qualifying activities. While larger companies can claim up to 10p on every pound spent on qualifying activities. ![Money in a pile.](https://sg-accounting.co.uk/wp-content/uploads/2019/05/money.jpg "money | SG Accounting") **Benefits of R&D tax credits** If your claim is successful and you are granted R&D tax credits this could lead a reduction in your Corporation Tax if you’re making a profit, a cash credit if you’re making a loss or a combination of the two. ***For further information on R&D tax credits and to hear how they could benefit your business, get in touch with one of our Directors on 01962 867550 or send us a brief message via our*** [***website***](https://sg-accounting.co.uk/contact/)***.*** **Categories:** Guides, Tax **Tags:** Switching - Service --- ### [CV advice you really need as a contractor](https://sg-accounting.co.uk/blog/cv-advice-you-really-need-as-a-contractor/) **Published:** June 10, 2019 **Author:** Kerry Newman **Content:** According to Forbes, the average number of people who apply for a job is 118! Incredible isn’t it? While this figure may not be a true representation of every sector or specialism, it does show that competition for roles can be extremely high. The first hurdle to get over when applying for a contract role is getting your CV seen by the hiring manager or recruiter. The [**Undercover Recruiter**](https://theundercoverrecruiter.com/infographic-recruiters-spend-5-7-seconds-reading-your-cv/) states that recruiters look at a CV for only between 5-7 seconds, so making sure your CV showcases your skills and experience (so that it catches the recruiters attention) is imperative for getting consistent work as a contractor. ![Cv being passed across recruiters desk.](https://sg-accounting.co.uk/wp-content/uploads/2019/06/CV.jpg "CV | SG Accounting") There is so much CV advice and tips on the web but a lot of this is not relevant for contractors, so we’ve spent time searching different sources and talking to experts to bring you the CV advice you really need: ### **Word or PDF which is best?** ATS or applicant tracking systems which are used by most recruiters and hiring teams have come have become very sophisticated. They can match contractors with roles based on relevant skills or keywords used are job descriptions and on CVs. However, there are some applicant tracking systems which struggle to read data if it’s presented in a pdf or image format. So, while it may be tempting to lay out your CV using an attractive PDF template or even present it as series of images or in a video, you could end up losing roles as the tracking system can’t read your details. Instead, use a word document and choose a layout which highlights your skills and experience. ### **Length is not everything** The standard rule is for a CV to be 2 pages in length. As a contractor, potentially working on several projects each year, fitting everything into 2 pages can be difficult. While you don’t want your CV to be too long you don’t want to miss off any important details, so try to stick to 3-4 pages. ### **Start with a strong personal statement** The hiring manager or recruiter doesn’t have the time to search your CV for important details, so you need to put these where they can be easily found – in an opening statement. The opening statement is used to ‘sell yourself’ so don’t be shy when talking about your strengths. Be sure to relate your strengths to the role and also detail how these will benefit the client. ![Resume on desk.](https://sg-accounting.co.uk/wp-content/uploads/2019/06/Resume.jpg "Resume | SG Accounting") ### **Experience outshines education** While specific qualifications may be needed for the role, a hiring manager or recruiter is likely to be more interested in your experience in a similar role. So, underneath your personal statement on the first page list your work experience, ideally in chronological order. Or, if you have been contracting for several years and have a long list of projects you’ve worked on a case study style CV may be more appropriate. A case study CV focuses on a client’s problem and details what processes you used to solve this problem and the results you achieved. ### **Match your CV to the role** Karen Frith of Contractors Anonymous (a company which offers a service which helps contractors perfect their ‘elevator pitch’) states that contractors “*need to restructure and refocus their CV for every role*.” Adding, that contractors should “*have multiple templates ready for use or tailoring at short notice*.” Finally, Karen iterates that contractors “*should never post generic CV’s to LinkedIn or job boards*.” ***Whether you are new to contracting, stepping back into it after a period away or are looking to step up your contracting career, our team has the knowledge and expertise to support you.*** [***Click here***](https://sg-accounting.co.uk/prices/) ***to find out about our accountancy packages or speak to one of our Directors on 01962 867550.*** **Categories:** Guides, New to contracting, Running your business --- ### [How to generate leads as a contractor](https://sg-accounting.co.uk/blog/how-to-generate-leads-a-contractor/) **Published:** July 9, 2019 **Author:** Kerry Newman **Content:** The vast majority of contractor’s secure work through a recruitment agency as it takes the hassle out of job searching and recruiters have access to more job opportunities. Yet, by marketing your contracting business it’s possible for clients to approach you directly. The client benefits as they don’t have to pay the agency commission and you benefit as you have more power when it comes to negotiating contract terms including day rate. So, if you’re struggling to get leads as a contractor here are a few things you can do: ## Create your own website While most contractors rely on CV’s, why not do something different to make yourself stand out? Creating a website is a fantastic way to showcase your skills, experience and projects you’ve worked on. ![A contractors hands creating a website.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/wesbite.jpg "wesbite | SG Accounting") It’s relatively inexpensive to create a simple website and if you know what you’re doing you could have it up and running in a day or so. ## Get active on social media ![Contractor on social media](https://sg-accounting.co.uk/wp-content/uploads/2019/07/socialmedia.jpg "socialmedia | SG Accounting") LinkedIn is the biggest B2B social media platform and it’s a great place to find a contract role as most businesses advertise details of open roles on the site. Over 25 million UK people have a LinkedIn profile so to help yours stand out, make sure you: · Include a profile picture · Have a headline which clearly explains what you do · Fully complete your profile, listing all the projects you’ve worked on · Sell yourself in the summary section outlining why a company should hire you over other contractors ## Create a profile on jobsites Create a profile on contractor jobsites, taking the time to detail your skills, experience and qualifications as well as explaining the type of roles you’re interested in. It’s not just recruiters who use them, hiring managers can also pay to access their CV databases. Some of the best jobsites for contractors include; Indeed, CW Jobs, Monster, OnlyContractJobs, Reed, itjobswatch – for IT contracting roles and Jobserve – for IT and engineering roles. ## Networking ![IT contractors networking.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/networking.jpg "networking | SG Accounting") Networking does take up time and it can be trial and error to find a group that works for you, but networking both online and in-person is a fantastic way: · To raise your profile · Meet peers · Broaden your circle of professional connections. Don’t expect to get enquiries straight away from networking as it takes time to build relationships and trust, but in the long run, it can be worth it. Look out for details of in-person meetups on sites like Eventbrite and on business forums relating to your industry. Or, if you prefer online networking, search for Facebook groups to join or Twitter chats to get involved with. ## Ask for referrals If you have successfully worked on a few projects and by doing so have built up a network of other contractor friends, you could refer roles onto each other if you don’t the capacity to take it on yourself. And, if you got on well with the client, there’s no harm in asking them to refer you on to their friends and colleagues. If you don’t ask, you don’t get, right? If you’re new to contracting and are looking to engage with an experienced contractor accountant or if you’ve been doing it for a while and are looking to switch accountants, click here to find out about all-inclusive monthly accounting packages. ### Alternatively, if you need help in a specific area such as IR35, VAT or payroll get in touch with our Directors on 01962 867550 or send us a message via our website and we’ll call you back. **Categories:** Guides, New to contracting, Running your business --- ### [Should IT contractors have their own website?](https://sg-accounting.co.uk/blog/contractor-websites/) **Published:** July 16, 2019 **Author:** Kerry Newman **Content:** Research by APSCo (Association of Professional Staffing Companies) shows that the demand for IT professionals has increased by 28% year-on-year. And our own research into contractor salaries (available in our article ‘Top paying contractor roles’) shows that IT contractors are amongst some of the highest earning contractors, with a Senior IT Manager being able to ask for £525.00 per day. This is great news if you’re an IT contractor! However, this demand also results in more people choosing to become contractors, meaning more competition for roles. A professionally presented CV and an optimised LinkedIn profile you can provide a recruiter or hiring manager with a brief overview of your skills and experience, a website highlighting your work may just help you secure your perfect role. ## The benefits of having a website ![IT contractor on laptop.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/ITContractoronlaptop.jpg "ITContractoronlaptop | SG Accounting") A website enables you to visually display projects you’ve worked on and discuss in more detail your involvement and the results you achieved. In addition to your portfolio of work, you could also use the website as a platform for sharing your thoughts and ideas through a series of articles or videos. This could lead you to receive more enquires for your services from direct clients or recruiters who have come across your website or who read one of your articles. ## Things to consider when building a website Whether you want a simple one-page website or a comprehensive site, there are some things to consider first: 1\. Who will be managing the site? If it’s yourself then you’ll need to build it on a platform which is easy to maintain. There are several on the market but the most widely used are WordPress, Joomla and Drupal. 2\. GDPR – Particularly important if you’ll be collecting information through your site. While, Article 30 of the GDPR regulation means that businesses with less than 250 employees aren’t bound by the GDPR regulation but you should familiarise yourself with it by visiting the ICO website. 3\. How will people find your website? It’s all well and good having a website but if you plan to use it for business development, you need to think about marketing your site. There lots of options, such as including a link to your website in your email signature, having a link to it from your LinkedIn profile and including its URL on any business marketing materials like business cards. ## What costs are involved with owning a website? You can keep costs down by building your own website (as long as you have the expertise to do so), but you may still have to pay for: · The domain name · Website hosting · An SSL certificate · A content management system · A website theme · Imagery for the website (if you plan to incorporate it in the design of the site) ![Man holding card to pay expenses.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/card.jpg "card | SG Accounting") While some of these may be a one-off cost, you will have to factor in recurring costs for renewing your domain name and website hosting. Don’t forget that as the website is related to the running of your limited company you should be able to claim some of these costs as a business expense, which can be offset against your Corporation Tax bill. #### For further information on business expenses, or to find out about all-inclusive monthly accounting packages, speak to one our Directors on 01962 867550, or send us a message via our website and we’ll get in touch with you shortly. **Categories:** Guides, New to contracting, Running your business --- ### [Tips on how to use LinkedIn for your contracting services](https://sg-accounting.co.uk/blog/tips-on-how-to-use-linkedin-for-your-contracting-services/) **Published:** July 22, 2019 **Author:** Kerry Newman **Content:** Love or loathe social media, it’s hard to ignore it. Since its launch in 2003 LinkedIn has grown to be one of the top ten biggest social media platforms – it has over 500 million global registered users with 25 million of them being in the UK. ![Social media on an iphone.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/linkedin.jpg "linkedin | SG Accounting") LinkedIn is slightly different to other platforms as it is primarily used for B2B purposes. Businesses have the option of creating company pages through which they can post jobs, share company news and updates. Or, as an individual you can connect with colleagues, peers, people who’d you like to work with and follow companies who you want to work for. This is why LinkedIn is a great platform for contractors to be on as they can use to it to find contract roles and promote their contracting services at the same time. With the millions of users on LinkedIn, you need to spend time optimising your profile so that recruiters and hiring managers can find and connect with you. This involves: · Using a professional profile image (people are less willing to connect with someone with no profile image) · Making sure your headline tells other’s exactly what you do – be specific as possible here as it’ll help you appear in search results for that term · Including all your contact details · Completing the experience and education sections · Listing all your certificates · Creating a compelling ‘About’ section which sells the benefits of using you – focus on the needs of your clients and discuss how you’ll go about solving their problems ![IT contractor sat at desk on laptop.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/itcontractor.jpg "itcontractor | SG Accounting") ## How to get inbound enquiries through LinkedIn: The reason for having an optimised profile is so that recruiters and hiring managers can find your profile but you can also improve your chances of receiving contract offers, by: · Increasing your connections –the more people you are connected with the more news of job openings will appear in your feed · Following company pages – news that is shared by companies you follow will appear in your feed. This saves you having to search for it · Posting updates on your work availability · Sharing details of the projects you’ve worked on · Asking ex-clients, colleagues or peers for recommendations · Joining LinkedIn groups that are related to your area of specialism and taking part in group discussions · Liking, sharing and commenting on other’s posts · Sharing your own ideas and tips to highlight your expertise ![IT contractors holding up speech bubbles.](https://sg-accounting.co.uk/wp-content/uploads/2019/07/carrying-casual-cheerful-1162964.jpg "carrying-casual-cheerful-1162964 | SG Accounting") The key to succeeding on social media is to remember that it’s a place to engage with other’s and the more you do this the greater your chances are of receiving work offers. Here at SG Accounting, we have over 20 years of experience supporting contractors, from those who are taking their initial steps through to seasoned contractors who have been doing it for years. ### Our team is on-hand to help you with VAT, payroll, IR35 reviews, expert tax advice and much more. To see how we can support you, speak to one of our Directors on 01962 867550 or send us a message via our website and we’ll call you back shortly. **Categories:** Guides, New to contracting, Running your business --- ### [Top tips for dealing with stress an IT contractor](https://sg-accounting.co.uk/blog/top-tips-for-dealing-with-stress-an-it-contractor/) **Published:** August 5, 2019 **Author:** Kerry Newman **Content:** The IT sector can be a highly pressured environment, with clients demanding you get systems or projects up and running within the shortest time possible. This can lead you to working long hours to meet these tight deadlines. While you may be able to sustain this for a short time, in the long term it can lead to burnout. Research by the Mental Health Foundation found that at some point in the last year 74% of adults have felt so overwhelmed that they were unable to cope. Some experts say that a little stress can make you more productive and efficient but too much stress can have a detrimental effect on your mental health and wellbeing. Stress affects people in different ways, but according to Mind, the mental health charity, some of the signs to look out for include: - Feeling anxious, irritable or afraid - Being uninterested in life - Being unable to switch off - Snapping at people - Being unable to concentrate - Experiencing frequent headaches - Experiencing chest pains or difficulty breathing - Suffering from blurred vision Other symptoms of stress can be found on the Mind [**website**](https://www.mind.org.uk/information-support/types-of-mental-health-problems/stress/signs-of-stress/#.XQjrtYhKjIU). ![IT contractor talking about stress.](https://sg-accounting.co.uk/wp-content/uploads/2019/08/Talking.jpg "Talking | SG Accounting") If you are experiencing any or all of these symptoms you may be suffering from stress, and you should make an appointment to see a doctor. To help reduce the symptoms of stress you should: 1. Talk about it – sharing how you’re feeling or voicing your concerns with family members, friends or trusted colleagues can reduce the overwhelming feeling you experience with stress 2. Focus on your health and wellbeing – small changes can help to bring balance to your life. If you find that you’re regularly stuck at your desk all day, find the time to go for a brisk walk. Activities like walking fast and climbing stairs increase your heart rate which is good for lifting your mood 3. Focus on your diet– eating carb-heavy meal’s such as pasta, rice-based dishes and jacket potatoes throughout the day can leave you feeling sluggish and sleepy. Instead, opt for smaller snacks or meals and eat more frequently throughout the day. This will help to even your blood sugar levels and avoid the ‘dip’ you feel after eating a heavy meal 4. Embrace super foods – swap caffeine-based drinks for water, eat omega -3 rich foods like fish, flaxseed and walnuts and snack on fresh fruit or vegetables throughout the day 5. Get quality sleep – not getting enough quality sleep can leave you feeling sluggish and irritable. If you struggle to drift off to sleep and to stay asleep try going to bed and getting up at similar times each day (including the weekend), sleeping in a dark room, not using an electronic device for at least half an hour before going to sleep and sleeping on a comfortable mattress. It’s recommended that you should change your mattress every eight years, so if yours is older than that then maybe it’s time for a new one 6. Outsource tasks – working on a client project while handling the responsibilities of running your own business can be difficult. If you’re worried that you are falling behind on your accounts and tax affairs, hire an experienced contractor accountant to handle some of the tasks for you 7. Get on top of your time management – arriving late to work or missing deadlines can lead to you feeling anxious and worried. Try leaving for work 5-10 minutes early and avoid distractions at work by turning off your email notifications ![IT contractor stretching out at desk.](https://sg-accounting.co.uk/wp-content/uploads/2019/08/Manstretchingoutatdesk.jpg "Manstretchingoutatdesk | SG Accounting") If you find that stress caused by your contract role is starting to negatively impact all aspects of your life, maybe look for a new contract. While no-one wants to walk away from a contract, your health should always be your priority. If you are finding that you’re struggling to stay on top of your accounts, we have a range of all-inclusive monthly accountancy packages to suit a variety of needs and budgets. [**Click here**](https://sg-accounting.co.uk/prices/) to find one which suits you. **Categories:** Guides, New to contracting, Running your business --- ### [Surviving your first year as a contractor](https://sg-accounting.co.uk/blog/surviving-your-first-year-as-a-contractor/) **Published:** August 13, 2019 **Author:** Kerry Newman **Content:** Right now, is a fantastic time to become a contractor, particularly if you work in the IT and tech sector. Contractors with specialist skills in data science, cybersecurity, frontend developers and change managers are especially in high demand. And, our research shows that contractors in the IT sector are amongst some of the highest paid contractors. If you feel you’ve got the necessary skills and determination to make it as a contractor, you can look forward to earning more than you did as an employee, being able to choose the type of contracts you work on and having the freedom to work when you need or want to. The first year of working as a contractor is always the hardest. To help you navigate through this sometimes confusing and difficult time, here are somethings you need to consider as an independent contractor working through your own limited company: ## Find out what it’s like beforehand The only way to understand what it’s like to work as a contractor is to speak to other contractors. You may have colleagues who are contractors who you can ask. If not, ask friends or family members if they can put you in touch with some. Alternatively, ask for opinions on sites like LinkedIn or on contractor forums. It’s a good idea to get insider opinions first, before making the leap, as contracting is not for everyone. ## Send your CV out to agencies On deciding that you want to be a contractor, one of the first things to do is to update your CV to reflect your current skills and experience. You can either do it yourself (see our article CV advice for contractors) or hire a professional CV writer to do it for you. ![Person handing over CV on desk.](https://sg-accounting.co.uk/wp-content/uploads/2019/08/handingoverCV.jpg "handingoverCV | SG Accounting") Once your CV is ready, send it out to all the agencies who recruit contractors for your sector. LinkedIn is the ideal place to connect with recruiters and to search for contracting roles. Also, job boards like Indeed, Reed and specialist sites like ITjobswatch or CWjobs are a good place to find the details of contractor recruiters. ## Get an accountant early on Most contractors engage with a contractor accountant early on in their contracting career, to advise and assist with setting up a limited company. In addition to this, the accountant may be able handle a number of directorial responsibilities such as: · Preparation and filing of annual accounts to Companies House and HMRC · Calculating any Corporation Tax liability and filing form CT600 to HMRC · Advising on VAT & Making Tax Digital · Offering guidance on IR35, amongst other things. ## Save for the lean times One of the few downsides of contracting is that there will be times between contracts when you are not working. It’s estimated that for every 12 months you spend contracting, three months will be spent not working. ![Saving Money](https://sg-accounting.co.uk/wp-content/uploads/2019/08/Savingmoney.jpg "Savingmoney | SG Accounting") As well as putting a portion of income aside for tax etc. set aside an amount to cover your outgoings during these lean times. With 20-plus years of experience working with contractors, our team is on-hand to answer any questions you have around contracting. This includes setting up and running a limited company, how to work as tax efficiently as possible and whether or not you need to be VAT registered, plus many more things. ### For expert and timely advice, speak to one of our Directors on 01962 867550 or send us a message via our website. **Categories:** Guides, New to contracting --- ### [Contracting abroad: Why professional advice is a must](https://sg-accounting.co.uk/blog/contracting-abroad-why-professional-advice-is-a-must/) **Published:** August 19, 2019 **Author:** Kerry Newman **Content:** If you’re offered the opportunity to contract abroad, it may be tempting to grab your passport and rush off to the airport. Not many people would blame you for doing this, as depending on the country you’re contracting in, you could have year-long sun, a chance to learn another language and expose yourself to new cultures and working practices. But, before you pack up your belongings, it’s vital that you get professional advice from an experienced contractor accountant, as contracting abroad can be complex, particularly in terms of tax. ## Contracting in the EU ![Euro notes in a pile.](https://sg-accounting.co.uk/wp-content/uploads/2019/08/euro.jpg "euro | SG Accounting") Contracting in the 28 European states has always been popular because as a member of the EU you don’t need a visa or permit to travel to these countries. However, some countries may require you have to some sort of permit or authorisation before you can work as a contractor. At the moment it is still not clear what impact Brexit will have on contractors but if you’re thinking of contracting in the EU maybe it would better to wait. At least until 31st October – the date we are supposed to exit with a deal or not! ## Contracting outside of the EU Contracting in countries outside of the EU is a little more complex as you’ll be required to have a visa. This is can be a lengthy process and it may involve the company you’re contracting for sponsoring you. This places a restriction on who you can work for. Some countries offer a special visa for skilled contractors but again these can be difficult to obtain. ## Taxation and contracting abroad ![Aeroplane wing above the clouds.](https://sg-accounting.co.uk/wp-content/uploads/2019/08/airplanewing.jpg "airplanewing | SG Accounting") Contracting abroad may mean you still have tax liabilities here in the UK. To be outside of the UK tax system and adopt the tax system of the country you’re contracting in you must remain outside of the UK for one whole tax year. Also, if you choose to contract through your limited company while you’re abroad you will have to pay corporate taxes in the country, you’re contracting in. The UK has one of the lowest levels of corporation tax (currently 19% and with plans to drop it to 17% in 2020/21) and rates vary substantially in different countries. So, contracting through a limited company is not always advisable! In this case, contracting through an umbrella company is a good alternative. Even though there will be charges to using an umbrella company, in some cases it can be the quickest route to contracting. And, some countries, such as Belgium, France, Germany and the Netherlands require contractors to work through an umbrella company or payroll company as they’re sometimes referred to. ## IR35 and contracting abroad If you are a UK resident and your limited company is registered in the UK, then IR35 is still a consideration. It’s, therefore, best practice for every new contract to undergo an IR35 review. This service is offered for no additional charge as part of some of our monthly accounting packages. ### For over twenty years we’ve been supporting contractors in the UK and abroad. Our Directors are up to date on international tax rules and regulations and are happy to answer any of your questions. Give them a call on 01962 867550 or send us a message using our online enquiry form. If you’re interested in working through an umbrella company, click here to visit SG Umbrella, our umbrella company. **Categories:** Guides, New to contracting, Running your business --- ### [Freelancing from a coworking space – could it work for you?](https://sg-accounting.co.uk/blog/freelancing-from-a-coworking-space/) **Published:** August 27, 2019 **Author:** Kerry Newman **Content:** The world of work is changing, and more and more people are choosing to become self-employed freelancers and contractors. IPSE (Association of Independent Professionals and Self-Employed) states that the number of self-employed in the UK now equates to 4.8 million, with 42% (approximately 2 million) working as freelancers. In 2016, freelancers contributed a staggering £119 billion to the UK economy. These figures are set to grow as the number of people swapping ‘employment’ for self-employment continues to increase. The reasons why people are drawn to freelancing is because it provides the freedom for skilled professionals to work on an array of projects. It allows ‘flexibility’ around the hours they work. So, for instance, if someone has carers duties during the day, they can complete their freelance work in the evening. But, the biggest benefit of freelancing is that you get to be your own boss and don’t have to take orders from anyone else! ## Where do freelancers work from? While some freelancers may be required to work onsite for the client, research carried out by Epson EcoTank found that 91% of freelancers choose to work from home. Working from home cuts out the cost and time of the commute and gives a better work-life balance, but after a while, it can become lonely. Epson’s study also uncovered that 48% of its respondents found freelancing lonely and nearly half (48%) said freelancing can be isolating. ![Isolated Freelancer](https://sg-accounting.co.uk/wp-content/uploads/2019/08/isolatedcontractor.jpg "Contractor | SG Accounting") If you’re a freelancer who is feeling the negative side-effects of working from home, working out of a coworking office maybe the answer for you. ## The pros and cons of coworking sites Coworking spaces, ranging from small independent providers through to multilocation suppliers have flooded the market. A whitepaper by the Instant Group found that there are around 5,300 coworking spaces in the UK. But how do you know if working out of a coworking space is right for you? To help you decide we’ve laid out some of the pros and cons: ### Pros Some of the benefits of a coworking space include: · The cost is cheaper than hiring a traditional office and usually includes the costs of amenities like lighting, WIFI, printing etc · Flexible usage – choose what suits you e.g. 1 day a week or a couple of days a month · Choose a space that suits your business needs e.g. 1 desk or a space for 2 / 3 people · Opportunity to meet new people and grow your professional network · Most spaces hold events which is a great way to top-up your knowledge ### Cons Some of the downsides of basing yourself in a coworking space include: · Time spent getting there · Lack of privacy – this is something to consider if your work involves managing sensitive data · People coming and going can be a distraction · You can’t personalise the space to your own taste · Unless you pre-book you could turn up and no space is available for you ![Coworking space.](https://sg-accounting.co.uk/wp-content/uploads/2019/08/coworkingspaces.jpg "coworkingspaces | SG Accounting") Whether you hire a desk on an ad-hoc basis or sign up to a monthly membership the good news is that the cost is deemed as a business expense. If you’re a limited company, this can be offset against your Corporation Tax bill. ### If you’re a freelancer who is thinking of incorporating your business, our Directors will be delighted to talk through the process with you. Give us a call on 01962 867550 or send us a message via our website and we’ll be in touch shortly. **Categories:** New to contracting --- ### [Thinking about changing your company car? Why waiting until 2020 could be a good idea](https://sg-accounting.co.uk/blog/thinking-about-changing-your-company-car-why-waiting-until-2020-could-be-a-good-idea/) **Published:** September 10, 2019 **Author:** Kerry Newman **Content:** If you’re a contractor who is thinking of purchasing an environmentally friendly company car through your limited company, due to the car benefit changes, you may be better off waiting until 2020 to do it. ![Zoomed in view of a car for contractors.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/frontofcar.jpg "frontofcar | SG Accounting") ## Tax on company cars Instead of using their personal car and reclaiming the mileage allowance relief, some contractors choose to purchase a car through their limited company. HMRC considers the private use of company cars as a Benefit in Kind (or BiK as it’s also referred to). The value of the Benefit in Kind or BiK cash value as it’s also known is used to calculate how much Income Tax as an employee you must pay and also how much Employers National Insurance Contributions you have to make to HMRC. ## How is it calculated? Several variables are taken into consideration when calculating the Benefit in Kind on a company car, these include: - Manufacturers list price - Type of fuel the vehicle uses - Carbon dioxide emissions These factors are used to calculate the BiK percentage which HMRC publishes each year. Currently, the maximum BiK is 37% of the vehicle price. As the government is trying to encourage people to be as ‘green’ as possible, it offers a reduced BiK for electric and low emission vehicles. For the 2019/20 tax year, it is 16%. Comparison of BiK cash value using a petrol and low emission vehicle as an example: | Vehicle | Manufacturer’s List Price | CO2 (g/km) | BIK % | Benefit Cash Value | Employers NIC – 13.8% | Employees Income Tax – 20% | |---|---|---|---|---|---|---| | Kia Sportage (petrol) | £27585 | 128 | 29% | £7999.65 | £1103.40 | £1599.13 | | Nissan Leaf (electric) | £31,440 | 0 | 16% | £5030.40 | £694.19 | £1006.08 | ## Changes from 2020 With the growing environmental crisis and health concerns that are being caused by vehicle emissions, from 2020, the BiK percentage for ultra-low emission vehicles and vehicles with a CO2 emission below 50g/km drops from 16% to 2%. Taking the example above, from 2020 the Employers NIC due on a Nissan Leaf will be £86.77 and the Employees Income Tax will be £125.76. This is a significant saving. ![Car on the road](https://sg-accounting.co.uk/wp-content/uploads/2019/09/carontheroad.jpg "carontheroad | SG Accounting") So, if you’re looking for a ‘green car’, here is a list of vehicles with the lowest CO2 emissions: | **Model** | **CO2 emission** | |---|---| | BMW i3 | 13 g/km | | Toyota Prius – plugin hybrid | 28 g/km | | Jaguar I-Pace | 0 g/km | | VW Passat GTE | 40 g/km | | Nissan Leaf | 0 g/km | | Volvo XC60 T8 | 47 g/km | | Tesla Model S | 0 g/km | | Mitsubishi Outlander PHEV | 40 g/km | | Hyundai Ioniq | 84 g/km | The Treasury has also made recent proposals for a driver wanting an emissions-free electric vehicle to pay 0% benefit-in-kind. This is part of new efforts to encourage drivers to go green! The rate will rise to 1% from April 2021 and back up to 2% from April 2022. Before you rush off to the car-forecourt, there are some things to consider when purchasing a company car through your limited company: - You can only reclaim VAT on the car if it is used exclusively for business - If you plan to use the car to travel to and from your regular place of work, this is classed as ‘ordinary commuting’ and you won’t be able to reclaim VAT - When a limited company buys a car it isn’t treated as an expense that can be deducted from your profit. Instead, tax relief is obtained through Capital Allowances which are calculated based on the CO2 emission of the car. Further details can be found on the .gov website - If your limited company pays for private fuel costs, HMRC will deem you’ve received a cash benefit based on the CO2 emission of the car - If the business only pays for business fuel costs, there’s no cash benefit and no additional tax is due. However, you will need to keep accurate mileage records to prove to HMRC that only the cost of the business fuel was reimbursed **For further information on the car benefit changes, or for advice on purchasing a company car through your limited company, speak to one of our Directors on 01962 867550, or send us a message through our website.** **Categories:** Expenses, News **Tags:** Switching - Service --- ### [Grants and loans available to contractors](https://sg-accounting.co.uk/blog/grants-and-loans-available-to-contractors/) **Published:** September 17, 2019 **Author:** Kerry Newman **Content:** Small businesses including contractors and freelancers have become a driving force in the UK. The latest figures by IPSE – the Association of Independent Professional and the Self Employed, puts the number of self-employed at 4.8 million, who contributed £275 billion to the UK economy in 2018. If you’re desperate to leave your job to join the growing ranks of independent contractors, or, if you’re already a contractor who is looking to raise cash to expand your business, here are some grants and loans which are available to help you get going. ![Man taking wallet out of pocket.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/manputtingwallet.jpg "manputtingwallet | SG Accounting") ## Start Up Loan A [Start Up Loan](https://www.startuploans.co.uk/) is a government-backed scheme which helps individuals to start or grow a business. On the application, you must state how much you want to borrow and detail what you’ll use it for. Along with this, you must provide a Business Plan, Cashflow Forecast and a Personal Survival Budget. If your application is successful, you could borrow up to £25,000, but the average loan awarded is around £7,000. Interest is fixed at 6% per annum and the loan term available is between one to five years. In addition to this, you also get access to 12 months of free business mentoring. The downside is that it can be difficult to qualify for a Start Up Loan and like with any loan if you don’t keep up with repayments, your assets could be at risk. ## Regional Loans Most local authorities or institutions provide schemes for the self-employed. What is available depends on the type of business and where you’re located. Visit Gov.uk Finance Finder to see what is on offer in your area. ## New Enterprise Allowance The [New Enterprise Allowance](https://www.gov.uk/government/collections/new-enterprise-allowance-campaign) is another government-backed scheme which aims to help the long-term unemployed back into work by offering support on setting up their own business. You must be over 18 years of age and be getting certain benefits, like; Universal Credit, Jobseekers Allowance or Income Support. ## Business Loan There’s a belief that because you’re a self-employed contractor you can’t get a business loan. This isn’t true, but you may find that fewer lenders are willing to loan you money. This is because they take the view that lending money to the self-employed is risky. ![Cash Machine picture.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/cashmachine.jpg "cashmachine | SG Accounting") Most high street banks and building societies offer business loans. However, you may find that lenders require your business to be operating for a specific time before they’ll lend to you. ## Funding Circle A slightly different offering to others mentioned here, [Funding Circle](https://www.fundingcircle.com/uk/) is a peer-to-peer lending platform. Effectively, it connects you with investors who are willing to loan you money. Founded in 2010, in the last nine years Funding Circle has helped facilitate loans in excess of £7 billion. Through the platform, you can apply for an unsecured ranging from £10,000 up to £500,000. Interest starts at 1.9% per annum (plus fees) and there’s no penalty for early repayment. ## Virgin Start Up Loan The[ Virgin Start Up Loan](https://www.virginstartup.org/start-up-loans) is only available to businesses under two years old, and for EU residents or UK passport holders. The amount available ranges from £500 to £25,000, but the average loan awarded is £10,000. The interest rate is fixed at 6% per annum and the loan term is from one to five years. ### For further information on any of these grants or loans, speak to one of our Directors on 01962 867550. Or, if you’re wanting to know how to become a contractor, download our free Guide to Contracting which covers everything from incorporating your business to charging VAT **Categories:** Finance, New to contracting, Running your business --- ### [Charging interest on late payments](https://sg-accounting.co.uk/blog/charging-interest-on-late-payments/) **Published:** September 22, 2019 **Author:** Kerry Newman **Content:** According to the Federation of Small Businesses (FSB), late payments by clients causes 50,000 small businesses to go under each year. This is estimated to cost the UK economy £2.5 billion. For contractors and freelancers, the personal cost of late-paying clients can be more damaging than the financial cost. Worrying about cash flow and late payments is one of the main causes of stress and anxiety amongst the self-employed. If you’re working through a recruitment agency, you’re unlikely to face the problem of late payers as the agency will have a dedicated team who chases for payment. However, if you’re working directly with clients, you’re responsible for following up with clients to get them to pay your invoice. ![Invoices on a desk with calculator.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/invoicing.jpg "invoicing | SG Accounting") ### To minimise the risk of clients paying your invoice late, we suggest: 1\. Setting payment terms with the client prior to working with them. It’s common practice for this to be 30 days but you are free to set your own payment terms 2\. Detailing your payment terms in your contract along with what action you’ll take in the instance of late payments 3\. Running a credit check (if you can) on new clients to determine the state of their cashflow 4\. Using an online accounting system like FreeAgent or Xero to issue invoices 5\. Setting the online accounting system to issue payment reminders 6\. Taking the time to ensure your invoices contain all the information needed for it to get paid, paying attention to PO numbers 7\. Getting a point of contact for someone in the Finance department 8\. Being proactive in chasing up late payers – don’t take the view they’ll eventually pay it, as they may not! If your client still fails to pay your invoice on time, under the EU’s Late Payment Directive you are entitled to charge interest and charges on the affected invoices. ## How does the Late Payment Directive work? The Late Payment Directive which was introduced in 2013 enables you as a contractor to charge interest and fees for late payment. If payment terms weren’t set, the law sets a default term of 30 days. Payment is classed as late if it is not made by this date or is made after this date. The directive states you can charge: · Statutory interest, at a rate of 8% above the Bank of England’s base rate. The base rate as of 31st December is used for invoices deemed as late between 1st January to 30th June. The rate as of 30th June is used for 1st July to 31st December. So, for example, if the base rate is 0.75%, you can charge interest of 8.75% · Fixed fees based on the amount owed; £40 for debts up to £999.99, £70 for debts from £100 to £9,999.99 and £100 for debts £10,000 and above · Additional reasonable fees, if the cost of chasing the payment is more than the fixed fees listed above Most clients are proactive in paying invoices, but you may occasionally come across one or two who are not on the ball with payment. In this case, follow up with your contact (we find a phone call is better than email) to enquire why it is late. If payment is still not received within a reasonable time, consider reissuing the invoice to include interest and late payment fees. ### If you’re interested in switching to online accounting or want to talk to one of our Directors about our all-inclusive monthly accounting packages, speak to us on 01962 867550 or send us a message via our website and we’ll get in touch shortly. **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [Top tips for getting a mortgage when self-employed](https://sg-accounting.co.uk/blog/top-tips-for-getting-a-mortgage-when-self-employed/) **Published:** September 30, 2019 **Author:** Kerry Newman **Content:** According to [HomeLet’s Rental Index](https://homelet.co.uk/homelet-rental-index), the average rent in the UK is £941 per calendar month. Many people see this as ‘dead money’ – going straight into the landlord’s pocket, with little benefit for them. If you’re one of the thousands of people who decide to purchase their own home each month, as an independent contractor you may be concerned that you won’t be able to get a mortgage. We’re here to tell you that’s not the case. Here is a summary of our top tips to help you secure a mortgage for your dream property. ![Houses in a street.](https://sg-accounting.co.uk/wp-content/uploads/2019/09/housesinthesunshine.jpg "housesinthesunshine | SG Accounting") ## **Can the self-employed get a mortgage?** As contractor accountants, we’re often asked this question. This is because there is a myth in the contracting world, that because you’re self-employed, banks, building societies and mortgage lenders won’t lend to you. In the past lenders were nervous about giving self-employed people mortgages because they deemed their line of work to be risky. However, as the number of people choosing to become contractors or freelancers has grown, lenders have realised they are missing out on this profitable sector and have changed their view on lending to the self-employed. ## **“Get yourself in a good position”** This is what we tell contractors when they tell us they are looking to purchase a home. Having your finances in order and all your paperwork up to date will make it easier for you to be approved for a mortgage. Relaxing in your own home at the end of a long day no longer has to be a dream with our top tips for getting a mortgage: - **Find a mortgage broker or IFA** (independent financial advisor) who has experience in arranging mortgages for the self-employed. Not only will they know which lenders to look at, but it’ll save you time hunting for them yourself - **Be honest with your mortgage broker** about any debt, outstanding loans or CCJ’s you may have as they’ll need to know about these before searching for mortgage lenders - **Have a good credit record** – things like missed credit card repayments, missed bills and CCJ’s all count against you. Surprisingly, if you never taken credit e.g. never had a loan or a credit card, this can also hurt your credit rating - **Keep clear and accurate records** – the lender will ask for proof of your income. Depending on how you work they may ask for copies of your work contracts or 2-3 years copies of filed accounts. Do engage with a certified and experienced contractor accountant and have a copy of these documents to hand so as not to hold up the mortgage application - **Curb your personal expenses** – as part of the mortgage application the lender will review your outgoings to determine what you can realistically afford to borrow. If you know that in 6-12 months’, you’ll be looking to get a mortgage, review your expenses to see if you can cut back on unnecessary expenses ![Man signing mortgage document](https://sg-accounting.co.uk/wp-content/uploads/2019/09/mansigningmortgagedocument.jpg "mansigningmortgagedocument | SG Accounting") If you’re a contractor who is looking to purchase a property and you would like some professional advice, we can put you in contact with qualified and regulated mortgage advisors. Speak to one of our Directors on 01962 867550 or send us a message via our [**website**](https://sg-accounting.co.uk/contact/) and we’ll put you in touch with them. Alternatively, if you’re looking for a new contractor accountant, check out [**all-inclusive monthly accounting packages**](https://sg-accounting.co.uk/prices/). **Categories:** Finance --- ### [Claiming interest on buy-to-let mortgages as a contractor](https://sg-accounting.co.uk/blog/claiming-interest-on-buy-to-let-mortgages-as-a-contractor/) **Published:** October 10, 2019 **Author:** Kerry Newman **Content:** Anyone who has rental property or works in tax will know about the relatively recent changes HMRC have made to how landlords are allowed to claim the interest on their mortgages. See below: | | **% of Mortgage Interest can be deducted from profits** | **% available as a basic rate deduction** | |---|---|---| | | | | | Prior Years | 100% | 0% | | 2017-18 | 75% | 25% | | 2018-19 | 50% | 50% | | 2019-20 | 25% | 75% | | 2020-21 | 0% | 100% | Over the past few years HMRC have been tinkering not only with what percentage of mortgage interest is allowable as a direct expense but also with how principle private residency and lettings relief are calculated. It would be hard to argue with landlords who expressed the opinion that they are being somewhat put upon at the moment. ![Buy to let mortgages](https://sg-accounting.co.uk/wp-content/uploads/2019/10/buytolet-contractor.jpg "buytolet-contractor | SG Accounting") One crumb of comfort I offer to clients who manage their affairs in such a way as to remain within the basic rate tax bracket is the following; ‘the amount of tax you would be due to pay doesn’t change as deducting mortgage interest from pre-tax profits and offering relief at the basic rate on post tax profits will give the same effect.’ It is only when a client is a higher rate tax payer that they will feel the pinch,… except, this isn’t exactly the whole picture. For clients who have the ability to moderate their annual income, I am thinking about contractors in the main, the above crumb of comfort has to be caveated. With less mortgage interest allowable as a direct expense, more of the rental income is included as income in the tax calculation. Even if relief is given at 20% later in the calculation, the effect of this additional rental income is to reduce what other income can be taken within the basic rate tax band. To illustrate my point please see below. | **Example 1** | **100% deduction** | | **Example 2** | **100% basic rate relief** | |---|---|---|---|---| | Rental Income | £15,000.00 | | Rental Income | £15,000.00 | | Mortgage Interest | £10,000.00 | | Mortgage Interest | £0.00 | | Taxable Rental | £5,000.00 | | Taxable Rental | £15,000.00 | | Limit before Higher Rate tax | £50,000.00 | | Limit before Higher Rate tax | £50,000.00 | | Less rental income | £5,000.00 | | Less rental income | £15,000.00 | | Remaining before Higher Rate Tax | £45,000.00 | | Remaining before Higher Rate Tax | £35,000.00 | The above example is slightly artificial but does get the point across. There would be relief in the second example of £10,000 at 20%, but this does nothing to stop the basic rate tax band being diminished. I would urge anyone in the above situation, specifically contractors who try to remain within the basic rate tax band, to review exactly what income is expected from rental property in the current tax year. The more rental income shown in the tax calculation will mean less dividends you can take before hitting the higher rate. The issues do not stop there however. For those higher rate tax payers who have reluctantly accepted their fate there could be an additional sting, the additional income from rental can affect Child Benefit claims and Personal Allowance abatement to name a couple. There are some solutions to the above issues depending on your aspirations as a property owner. One would be to incorporate a second business just for property; within a limited company structure, mortgage interest is still a 100% deduction. Within a limited company structure you can moderate what income you taken out of the company. As with everything, there are plusses and minuses to the above approach and very much depends on what your long terms plans are. If you are unsure about how these recent changes will affect you and the best way to move forward, give us a call. **Categories:** Expenses, Tax **Tags:** Switching - Service --- ### [Could you benefit from the Rent a Room scheme? ](https://sg-accounting.co.uk/blog/could-you-benefit-from-the-rent-a-room-scheme/) **Published:** October 15, 2019 **Author:** Kerry Newman **Content:** Do you have a spare room in your home? Maybe your kids have grown up and have moved out? Or, you’ve moved into a new property and you find you have spare space? Instead, of converting this space into a home gym that you’ll never use or using the room as a storage space, with the rent-a-room scheme you could earn up to £7,500 per year tax-free. ## **What is the rent-a-room scheme?** Rent-a-room is an opt-in scheme which is available to property owners and tenants. By renting out furnished accommodation in your main home to a lodger you could earn up to £7,500 (or £3,750 if you’re letting with someone else) a year, tax-free. ![Rolled up £5 note.](https://sg-accounting.co.uk/wp-content/uploads/2019/10/rolledupfivepoundnote.jpg "rolledupfivepoundnote | SG Accounting") The scheme is open to homeowners and tenants – as long as you have permission from the landlord. If you are the property owner, you may have to get permission from your mortgage provider and home insurance provider before renting out a room. ## **What can I earn?** What you charge the lodger for renting the space is entirely up to you, but if it is more than £7,500 (rent-a-room tax threshold) a year you will have to pay tax. This threshold includes everything you charge the lodger as part of the rental service. So, if you charge for meals, cleaning or laundry you’ll have to include these as well. ## **Tax and the rent-a-room scheme** If you earn less than the rent-a-room tax threshold (£7,500) your tax exemption is automatic, and you don’t need to do anything except keep a record of the income. If you earn more than £7,500 you will have to complete a tax return. You’ll need to do this, even if you don’t normally have to. You can choose to do one of two things: 1. **Opt-in to the scheme** and inform HMRC of this by completing the appropriate section of your tax return and claim your tax-free allowance. Using this method, you’ll pay tax on the gross income after the allowance (£7,500) has been deducted. 2. **Choose not to opt-in** and record your income and any related expenses on the property pages of your tax return. Using this approach, you’ll pay tax on any profit you’ve made (income minus allowable expenses). Unless you inform HMRC, they’ll assume that you’re opting out of the scheme, so it’s important that you inform them through your tax return. If you decide to opt-in, you aren’t tied to that option forever. You can choose a different option each year, but you must tell HMRC by the 31st January following the end of the tax year. ![Bed in a bedroom.](https://sg-accounting.co.uk/wp-content/uploads/2019/10/bedroom.jpg "bedroom | SG Accounting") ## **Pros and cons of the rent-a-room scheme** The benefits of opting-in to the scheme include: - Additional income of £7,500 per year tax-free if your earnings are under the rent-a-room tax threshold - The income from the scheme can help towards the costs of running a home - It’s company for you if you live on your own Some things to consider before opting-in to the scheme: - The income you earn through the rent-a-room scheme may affect your means-tested benefits (if you are entitled to them), like universal credit - You need permission from your landlord, or if you’re a homeowner your mortgage and insurance provider – they could say ‘No’ - As you can’t claim for expenses relating to the property, such as wear-and-tear, or the cost of replacing a boiler, you could be financially worse off by opting-in to the scheme - Even if you opt-in to the scheme you must keep accurate records, in case you choose to opt-out at a later date If you’re interested in the rent-a-room scheme but are concerned about the effect it will have on the tax you pay as an independent contractor, our Directors will be happy to answer any of your questions. Call us on 01962 867550 or send us a message using our [**online enquiry form**](https://sg-accounting.co.uk/contact/) and we’ll be in touch. **Categories:** Expenses, News **Tags:** Switching - Service --- ### [How are Director’s Loans taxed?](https://sg-accounting.co.uk/blog/how-are-directors-loans-taxed/) **Published:** December 9, 2019 **Author:** Kerry Newman **Content:** A Director’s Loan can be taken when you need money to cover a personal expense, or if you need to purchase a new piece of work equipment, for instance. In fact, there are no rules detailing what the money can be used for, but there are strict rules governing what taxes are due on a Director’s Loan. For a full explanation of what a Director’s Loan is and how they are taken, please see our guide, [‘Everything you need to know about Director’s Loans.’](https://sg-accounting.co.uk/blog/everything-you-need-to-know-about-directors-loan/) ## *“Are Director’s Loans taxable?”* ![IT Contractors thinking about directors loans](https://sg-accounting.co.uk/wp-content/uploads/2018/08/business-questions.jpg "business-questions | SG Accounting") This has to be the most frequently asked question relating to Director’s Loans. And, it’s not straightforward. If taxes are due on a Director’s Loan, it depends on how much is taken and when it’s repaid. Let’s see how it works: ## Corporation Tax If you repay the full amount of the loan, within nine months and one day of your company’s year-end, you won’t have to pay additional Corporation Tax at 32.5%, or Section 455 CTA Tax as it’s also referred to. e.g. If you borrowed £10,000 on 28th March 2019 and your company year-end is 31s March 2019, you have until 1st January 2020 to pay it back. However, if you fail to repay the full amount within this time, additional Corporation Tax (Section 455 CTA Tax) is due on the outstanding amount. e.g. If £5,000 of the loan is outstanding, you may have to pay £5,000 x 32.5% = £1,625 Section 455 CTA Tax. Unlike many other forms of taxes, you can claim Section 455 CTA Tax back from HMRC, once you’ve repaid the entire loan. ## Reclaiming Section 455 CTA Tax HMRC will refund your Section 455 CTA Tax, nine months and one day after the accounting period in which you repaid the loan. e.g. If you fail to repay the loan by 1st January 2020, repayment falls into 20/21 financial year which ends on 31st March 2021. This means that the money won’t be refunded until 1st January 2022. This is quite a delay, and contractors aren’t often aware of this. So, it’s something to bear in mind when taking a Director’s Loan. ## Personal Tax An interest free loan over £10,000 will be classed as Benefit-in-Kind. This needs to be included on your P11D and Class 1A National Insurance at 13.8% is payable by your limited company. A Benefit-in-Kind is defined as benefits you receive from the company that aren’t included in your salary or wage. It could be a service you use personally but which the company pays for. How this relates to Director’s Loans is detailed in our [‘Everything you need to know about Director’s Loan.’](https://sg-accounting.co.uk/blog/everything-you-need-to-know-about-directors-loan/) Before taking a Director’s Loan, it’s advisable to seek professional advice from a qualified and experienced accountant. **Our Directors are extremely experienced in this area and are happy to discuss any points raised in this article in greater detail with you. Give them a call on 01962 867550 or send us a message via our website and we’ll be in touch to arrange a convenient time to speak.** **Categories:** Finance, Running your business **Tags:** Switching - Service --- ### [FCSA accreditation for SG Accounting and SG Umbrella](https://sg-accounting.co.uk/blog/fcsa-accredited/) **Published:** February 20, 2020 **Author:** Kerry Newman **Content:** We’re delighted to announce that SG Accounting and SG Umbrella have been added to the accredited members list of The Freelancer and Contractor Services Association (FCSA). To become an accredited member, we’ve had to undergo an independent and rigorous assessment of our business services, operations, policies and processes, all of which have been examined to ensure adherence to FCSA compliance standards. ## FCSA Chief Executive, Julia Kermode comments “Congratulations to everyone at SG Professional Services Group on achieving FCSA Accreditation. Passing the rigorous assessment to become an Accredited Member is not easy and therefore testament to their hard work and commitment. Any recruitment agency or contractor looking to engage the SG Group can be rest assured that they are in safe hands.” ## What does this accreditation mean? FCSA accreditation demonstrates to our contractor clients and recruitment businesses that we adhere to rigorous compliance standards and are acting both professionally and ethically within the UK tax, employment and regulatory laws. A copy of the audit report is also sent to HMRC, and we must prove our compliance annually. We are very proud of being able to demonstrate this high standard of compliance in the professional employment services sector and would encourage all contractors to ensure that they are working with an FCSA accredited provider. ## SG Accounting – the future of your contracting career Join SG and you’ll get an all-inclusive expert contractor accounting service, plus for an extra monthly fee get our FCSA accredited umbrella service and help with pensions, investments and wealth management. So whether you’re fresh to contracting or a seasoned pro and whatever the future holds, you’re in safe hands with SG. **Categories:** News, Umbrella --- ### [Can I furlough myself as a Limited Company Contractor?](https://sg-accounting.co.uk/blog/coronavirus-job-retention-scheme-for-contractors/) **Published:** March 27, 2020 **Author:** Kerry Newman **Content:** Under the Government’s Coronavirus business support measures announced this week, it has been indicated that some Limited Company contractors may be covered by the ‘Job retention scheme’ and therefore can furlough themselves if unable to work due to Covid-19. There is a distinction in law between a director with a service contract and a director with an employment contract although we believe the statement below is intended to cover all directors. This was announced as part of the measures aimed at the self-employed that were announced by the Chancellor Rishi Sunak on 26th March. The HMRC guidance says: “Those who pay themselves a salary and dividends through their own company are not covered by the<self-employment> scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.” The job retention scheme is a generous initiative that will allow an employer to “furlough” (temporarily lay off) a worker between 1 March 2020 and 31 May 2020 (although Rishi Sunak has announced this will be extended if needed). This is designed to help employers pay 80% of the salary of employees and is subject to a cap of £2,500 per month per employee. To take advantage of the job retention scheme, your business will need to designate you (the employee) as a “furloughed worker” , and submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). This system is being urgently set up as the existing HMRC systems are not set up to deal with these payments. You can read more about the measures set up to support businesses during the Coronavirus pandemic [here](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/). **Categories:** Coronavirus, News, Salary/dividends **Tags:** Switching - Service --- ## Pages ### [Home](https://sg-accounting.co.uk/) **Published:** April 17, 2020 **Author:** Dan Mepham **Content:** # Specialist accounting for contractors & small businesses ## Expert advice. Personal service. No surprises. Your own dedicated accountant, unlimited support, FreeAgent included and fixed monthly fees. We’ll keep your accounts, tax and compliance on track, so you can focus on growing your business. [Speak with our team](https://sg-accounting.co.uk/contact/) [Our pricing](https://sg-accounting.co.uk/prices/) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Award certificate saying The Contracting Awards 2026, Winner: Best Contractor Accountancy – 1,000–3,000 clients](https://sg-accounting.co.uk/wp-content/uploads/2026/10/Best-Contractor-Accountancy-Contracting-Awards-2026-Winner.png "Best Contractor Accountancy – Contracting Awards 2026 Winner | SG Accounting") [![Freeagent white logo blue texture](https://sg-accounting.co.uk/wp-content/uploads/2026/07/free-agent-white-logo-blue-texture.webp "FreeAgent | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ## Accounting support you can depend on ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") Since 1995, we’ve helped contractors and small business owners simplify their finances, stay compliant and make confident decisions. As an independent specialist accountant, we provide expert advice, proactive support and a personal service tailored to your needs. - Dedicated accountant and personal service - Unlimited support and advice - Fixed monthly fees with no hidden costs - Specialist tax, accounting and compliance expertise [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Limited company accountants for contractors featured image](https://sg-accounting.co.uk/wp-content/uploads/2026/07/limited-company-accountants-for-contractors-featured-image.webp "limited-company-accountants-for-contractors-featured-image | SG Accounting") ## Limited Company Accounting If you are a contractor and have decided to work through your own limited company, then we can help you with the accounting side. [Explore Package](/limited-company-accountants-for-contractors/) #### [FreeAgent bookkeeping software included – saving £396 per year](#7455200f9378c7def) We partner with [FreeAgent](https://sg-accounting.co.uk/freeagent/), the award-winning accounting software designed specifically for freelancers, contractors, and small business owners. Included at no extra cost to you, FreeAgent makes it easy to monitor and manage your finances wherever you are. #### [Direct line to your personal accountant](#bc837be73e402585c) You’ll get one main point of contact with your senior (Director level) accountant – they’ll meet you via video call to discuss how we can create a bespoke tax efficiency plan for you. And you can call them direct whenever you like – no charge for advice. #### [All required Companies House and HMRC filings covered](#96ea95046cdf093bb) Accounts, tax, VAT and payroll – all set up, advised on, prepared and submitted. ### Ready to go? Use our online sign up form to get started. We’ll then get in touch to confirm that we’ve received your form and explain the next steps. [Sign up online today](/sg-accounting-signup-form/) ## Umbrella Payroll SG Umbrella makes temporary working simple, with fast onboarding, daily payment runs and award-worthy personal service. You’ll always speak directly to our team, and switching between umbrella and limited company working couldn’t be easier. [Explore Package](/umbrella-payroll-service-for-temporary-workers/) ![Umbrella payroll service for temporary workers featured image](https://sg-accounting.co.uk/wp-content/uploads/2026/07/umbrella-payroll-service-for-temporary-workers-featured-image.webp "umbrella-payroll-service-for-temporary-workers-featured-image | SG Accounting") ![Simple accounting for sole traders featured image](https://sg-accounting.co.uk/wp-content/uploads/2026/07/simple-accounting-for-sole-traders-featured-image.webp "simple-accounting-for-sole-traders-featured-image | SG Accounting") ## Sole Traders Stay on top of your tax obligations with expert sole trader accounting support. We’ll handle your Self Assessment tax return, provide practical tax advice, and keep you fully compliant with Making Tax Digital. [Explore Package](/simple-accounting-for-sole-traders/) ## What you get with SG Accounting ![Value](https://sg-accounting.co.uk/wp-content/uploads/2021/06/value-icon.png "value-icon | SG Accounting") ### Value for Money - Flexible fixed-fee packages - Unlimited advice from your accountant - No joining, switching or exit fees ![Advice and Information](https://sg-accounting.co.uk/wp-content/uploads/2021/06/advice-i-icon.png "Advice and Information | SG Accounting") ### Advice That Saves - Proactive tax planning advice - Pension and wealth planning support - Specialist advice for wider interests ![Reassuring Heritage](https://sg-accounting.co.uk/wp-content/uploads/2022/09/reassuring-icon.png "| SG Accounting") ### A Reassuring Heritage - Supporting clients since 1995 - Trusted by recommendation - Independent and FCSA accredited ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Name This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [FreeAgent](https://sg-accounting.co.uk/freeagent/) **Published:** June 30, 2026 **Author:** Damteq **Content:** 1. [Home](https://sg-accounting.co.uk) 2. FreeAgent # # FreeAgent accounting software, included with SG Accounting We make managing your finances simple and stress free. Every SG Accounting package includes FreeAgent, a leading choice for FreeAgent accountant UK services, trusted by small businesses and contractors nationwide. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Award certificate saying The Contracting Awards 2026, Winner: Best Contractor Accountancy – 1,000–3,000 clients](https://sg-accounting.co.uk/wp-content/uploads/2026/10/Best-Contractor-Accountancy-Contracting-Awards-2026-Winner.png "Best Contractor Accountancy – Contracting Awards 2026 Winner | SG Accounting") ![Freeagent white logo blue texture](https://sg-accounting.co.uk/wp-content/uploads/2026/07/free-agent-white-logo-blue-texture.webp "FreeAgent | SG Accounting") ## What is FreeAgent? FreeAgent is an award winning contractor accounting software built for small businesses, freelancers, and limited company contractors. It gives you a clear, real time view of your finances in one easy to use platform. You log in and see exactly where your business stands. Money in, money out, tax owed, and deadlines coming up. No spreadsheets to wrestle with and no guesswork at year end. More than 150,000 UK businesses already use FreeAgent to run their books. It is built around the way contractors and small companies actually work, so the screens speak your language rather than an accountant’s. ![Three colleagues reviewing a payroll document together on a table, with a payroll UI overlay in front of them for Month 3](https://sg-accounting.co.uk/wp-content/uploads/2026/06/features-image-payroll2.png "features-image–payroll2 | SG Accounting") How FreeAgent works with SG Accounting We combine powerful software with expert support. You spend less time on admin and more time on your business. - ### Set up for you We get your account up and running, connect your bank, and make sure everything is configured from day one. - ### Real time insights Track income, expenses, and tax instantly, so you always know what you can pay yourself and what to set aside. - ### Worked on together We manage and review everything with you, picking up questions early rather than at the year end scramble. - ### Tax handled Automatic calculations, checked by our experts, so your returns are accurate and filed on time. - ### Freeagent included in all packages Saving £396 per year. ## ## Key Features - Simple invoicing and expense tracking - Real time tax calculations - Payroll and dividend tracking - Automatic bank feeds - VAT returns and MTD compliance - Clear finanical reporting ![Screen of HMRC tax portal showing annual self-employment estimate of £51,455 for Nathan Barley with quarterly income and expense breakdowns.](https://sg-accounting.co.uk/wp-content/uploads/2026/06/multi-audience-mtd1.png "multi-audience–mtd1 | SG Accounting") [See our prices](/prices/) ## ## Save £396 per year **FreeAgent normally costs £396 per year.** Thanks to our partnership, we include it free in all SG Accounting packages, giving you contractor accounting software and expert support in one simple monthly fee. That is the full software, not a stripped back version. You get every feature, every update, and a qualified accountant who knows how to use it on your side. ### ## Built for contractors and small businesses Whether you are a contractor or a growing business, SG Accounting and FreeAgent work together to simplify your finances and give you complete clarity, without the stress. [Enquire Now](https://sg-accounting.co.uk/contact/) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Comments This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Umbrella Payroll service for temporary workers](https://sg-accounting.co.uk/umbrella-payroll-service-for-temporary-workers/) **Published:** July 29, 2026 **Author:** Damteq **Content:** 1. [Home](https://sg-accounting.co.uk) 2. Umbrella Payroll service for temporary workers # Umbrella Payroll service for temporary workers While many contractors choose to operate through a limited company with support from SG Accounting, there are situations where this may not be the most suitable option. In these cases, SG Umbrella provides a flexible and compliant alternative. [Speak with our team](https://sg-accounting.co.uk/contact/) [Visit our SG Umbrella Site](https://sg-umbrella.co.uk/) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Award badge: Finalist for Best Umbrella Company (500–1,000 clients) at The Contracting Awards 2026](https://sg-accounting.co.uk/wp-content/uploads/2026/10/Best-Umbrella-Company-Contracting-Awards-2026-Finalist.png "Best Umbrella Company – Contracting Awards 2026 Finalist | SG Accounting") ![FCSA Umbrella accredited member badge](https://sg-accounting.co.uk/wp-content/uploads/2026/07/umbrella-accredited-member-badge.webp "fsca-umbrella-accredited-member-badge | SG Accounting") ### Fast Onboarding Fast onboarding with daily payment runs ### 5 Star Service No call centres – you’ll get straight through to the our expert Umbrella team if you have any questions ### Easy switching Effortlessly switch between Ltd company and Umbrella [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) # What is SG Umbrella? SG Umbrella offers a straightforward payroll solution for contractors who choose not to or are not able to work through a Limited Company. You become an employee of the umbrella company, and we take care of invoicing your agency or client, processing your pay, and handling all required tax and National Insurance deductions. [Speak with our team](/contact/) [See our prices](/prices/) ![Lady showing work from a tablet to a colleague](https://sg-accounting.co.uk/wp-content/uploads/2026/07/lady-showing-work-from-a-tablet-to-a-colleague.webp "lady-showing-work-from-a-tablet-to-a-colleague | SG Accounting") When might SG Umbrella right for you? ### Working Inside IR35 and Need Compliance Your contract falls inside IR35 and your agency or end client requires umbrella working. ### Seeking a Simple, Hassle-Free Employment Solution You prefer not to manage a limited company. ### Flexible Support You need a short-term solution instead of (or alongside) your Ltd company. ### Need advice on Ltd vs Umbrella? [Give us a call](tel:+441962896968) [See our prices](/prices/) ## Why choose SG for Umbrella Payroll? - Compliant payroll processing aligned with HMRC regulations - FCSA and SafeRec accreditation - Timely and accurate payments - All taxes and deductions handled for you - Employee benefits, including holiday pay, statutory sick pay, maternity/paternity pay, and pension contributions - Support from the SG team, alongside your accounting needs if you also run a limited company ![Team meeting in a glass meeting room](https://sg-accounting.co.uk/wp-content/uploads/2026/07/team-meeting-in-a-glass-meeting-room.webp "team-meeting-in-a-glass-meeting-room | SG Accounting") ### We’d love to hear from you If you’re considering your options and want to chat them through or are just looking for a great value, great service Umbrella option, we’ve got you covered [Speak with our team](/contact/) [Visit our SG Umbrella Site](https://sg-umbrella.co.uk/) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Company This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Limited Company Accountants for Contractors](https://sg-accounting.co.uk/limited-company-accountants-for-contractors/) **Published:** July 29, 2026 **Author:** Damteq **Content:** 1. [Home](https://sg-accounting.co.uk) 2. Limited Company Accountants for Contractors 50% off £59.50 per month for first 3 months # Limited Company Accountants for Contractors Running a limited company as a contractor doesn’t have to be complicated. With SG Accounting, you’ll get FreeAgent software, a direct line to your accountant and unlimited advice, all included. [Speak with our team](https://sg-accounting.co.uk/contact/) [Our pricing](https://sg-accounting.co.uk/prices/) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Award certificate saying The Contracting Awards 2026, Winner: Best Contractor Accountancy – 1,000–3,000 clients](https://sg-accounting.co.uk/wp-content/uploads/2026/10/Best-Contractor-Accountancy-Contracting-Awards-2026-Winner.png "Best Contractor Accountancy – Contracting Awards 2026 Winner | SG Accounting") [![Freeagent white logo blue texture](https://sg-accounting.co.uk/wp-content/uploads/2026/07/free-agent-white-logo-blue-texture.webp "FreeAgent | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ### Personal Service Direct line to your personal accountant for unlimited expert tax advice ### Software Included FreeAgent bookkeeping software included – saving £396 per year ### No hidden fees No joining fees, minimum periods or leaving fees. Free accounts catch-up if your company year-end has not yet finished [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) # I’m switching accountants You may be considering switching accountant for a number of reasons; not getting the right tax advice and being slow to get the basics done are the reasons we hear most often from contractors and business owners moving to us. [Speak with our team](https://sg-accounting.co.uk/contact/) [See our prices](https://sg-accounting.co.uk/prices/) - ### We’ll manage the transition We help you manage the transition from your previous accountant plus HMRC and Companies House set-up. - ### Free catch-up Free accounts catch-up if your company year-end has not yet finished - ### Immediate tax efficiency review You’ll meet with your personal accountant to review your accounts and create a tax efficiency plan for you. - ### Support with pensions, investments and more SG Accounting clients get access to pension and wealth management advice plus accounting and tax support with other business interests such as buy to let properties and crypto currency. - ### Freeagent included in all packages Saving £396 per year ### Ready to go? Use our online sign up form to get started. We’ll then get in touch to confirm that we’ve received your form and explain the next steps. [Sign up online today](/sg-accounting-signup-form/) # I’m just starting out Running your own business can seem daunting, but don’t worry, as professional accountants we’re here to advise on the whole process, from company set up and onward. Just give us a call to get started. [Speak with our team](https://sg-accounting.co.uk/contact/) [See our prices](https://sg-accounting.co.uk/prices/) ![Office worker holding a mug in front of a computer showing technical information](https://sg-accounting.co.uk/wp-content/uploads/2026/07/office-worker-holding-a-mug-in-front-of-a-computer-showing-technical-information.webp "office-worker-holding-a-mug-in-front-of-a-computer-showing-technical-information | SG Accounting") - ### Guidance on business structure We’ll discuss and advise on the pros and cons of different business structures, including limited company, sole trader, partnerships or even working through an umbrella. - ### HMRC and Companies House setup We’ll help you get set up with HMRC and Companies House. Your package also covers submission of all required Companies House and HMRC filings. - ### Limited company setup If required, we’ll help you set up your limited company – you can even use our address as your registered address. - ### Insurance and bank account organisation We can help you organise your insurance and bank account if that’s what you need. - ### Freeagent included in all packages Saving £396 per year. ### £59.50 per month for the first 3 months - #### Personal Service Direct line to your personal accountant for unlimited expert tax advice - #### Software Included FreeAgent bookkeeping software included – saving £396 per year - #### No Hidden Fees No joining fees, minimum periods or leaving fees. [![FreeAgent logo with a winged icon beside the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/06/freeagent-logo-negative.png "freeagent-logo--negative | SG Accounting")](https://sg-accounting.co.uk/freeagent/) [See our prices](/prices/) ## Why SG for Ltd Company Accounting? #### [30 years of experience - you’re in safe hands with SG](#87d94d34ebc481c02) We are an independently owned and run business dedicated to offering great service to contractors. Professional qualified accountants since 1995, you know you’re in safe hands with SG #### [One main point of contact with your director-level accountant](#3417e33ddd6fb7316) You’ll have a direct line to your personal accountant and their team of tax and accounts specialists. They’ll meet you via video call to help create a bespoke tax efficiency plan for you. And you can call them whenever you like – no charge for advice #### [Access to other financial services](#07fdf6503aad74df9) All of our clients get access to other services such as pensions, wealth management advice and accounting and tax support with other business interests such as buy to let properties and crypto currency #### [Zero joining fees](#b07bca8285700de20) There are no joining fees, minimum periods or leaving fees. We’ll even catch up your accounts at no extra charge if your company year-end has not yet finished, so you don’t need to wait to switch #### [Direct access to SG Umbrella for any of your contacts](#c6581775b6cfaf7cc) If you’re a contractor and you need to work through an Umbrella company for any of your contracts, our sister company SG Umbrella can help ![Team meeting in a glass meeting room](https://sg-accounting.co.uk/wp-content/uploads/2026/07/team-meeting-in-a-glass-meeting-room.webp "team-meeting-in-a-glass-meeting-room | SG Accounting") ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Company This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Our Offers](https://sg-accounting.co.uk/prices/offers/) **Published:** February 3, 2020 **Author:** Dan Mepham **Content:** Limited Company – special offer # October special 3 months **half price** Switchers – No catch-up fees! Help with your company’s set-up 3 months free Fee Protection Cover plus Business Legal Helpline [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![£59.50 per month plus FREE accounts catch-up](https://sg-accounting.co.uk/wp-content/uploads/2025/05/offer-price-banner-halfprice-2025c.png "offer-price-banner-halfprice-2025c | SG Accounting") ## **Free** switching service and **NO** catch-up fees Limited companies – need to wait for your year end to be completed before you switch – we’ll include your next due set of accounts at no extra charge. ## Accounting from just **£59.50** per month No matter whether you’re switching or new, when you join us you’ll get our accounting services for half price for the first three months. [Click here to view more information and the T&Cs](https://sg-accounting.co.uk/special-offer-terms/). ## All SG Accounting clients also get ![Legal](https://sg-accounting.co.uk/wp-content/uploads/2021/07/legal-doc-stamp.png "legal-doc-stamp | SG Accounting") ### Company Incorporation Help If you’re new we’ll help you set up your company, to ensure you get it right first time ![Office Building Location](https://sg-accounting.co.uk/wp-content/uploads/2021/07/office-building-location.png "office-building-location | SG Accounting") ### Free registered office address Use our address as your registered office address at no extra charge ![Reassuring Heritage](https://sg-accounting.co.uk/wp-content/uploads/2022/09/reassuring-icon.png "| SG Accounting") ### Unlimited Advice Call your Client Director any time for advice on tax, IR35 and more! ### £100 client reward Our clients receive a £100 reward for every client they refer to us, who join us. [Click here for more information and to see the T&Cs](https://sg-accounting.co.uk/clients/refer-a-friend/). [![FreeAgent logo](https://sg-accounting.co.uk/wp-content/uploads/2024/09/FreeAgent-White.png "FreeAgent White | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ### FreeAgent software Included in all of our packages at no extra cost. ![No Contract](https://sg-accounting.co.uk/wp-content/uploads/2021/07/no-contract-icon.png "no-contract-icon | SG Accounting") ### • NO Minimum contract • NO joining fees • NO Leaving fees ![Legal](https://sg-accounting.co.uk/wp-content/uploads/2021/07/legal-doc-stamp.png "legal-doc-stamp | SG Accounting") ### [3 months free Fee Protection Cover plus Business Legal Helpline](https://sg-accounting.co.uk/3-months-free-fee-protection-cover/) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) [See our prices](https://sg-accounting.co.uk/prices/) ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - LinkedIn This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Frequently Asked Questions](https://sg-accounting.co.uk/faqs/) **Published:** August 13, 2015 **Author:** Dan Mepham **Content:** ### We are here to help you As part of our all-inclusive service we provide you with unlimited telephone and email support during the year. We have also produced this FAQs guide covering some of the most common questions we are asked. #### [I have heard about IR35, what is it and how can it affect a contractor?](#7d65190c1de97d795) IR35 (also known as intermediaries legislation) was brought in by the Government in 2000 to tackle the growing use of Limited Companies as disguised employment. An example may be a permanent employee leaving work on a Friday and returning on a Monday morning at the same desk, same job but working through a Limited Company to pay less tax. Contractors should be aware of IR35 and how it may affect them if they consider their contract to have likenesses to permanent employment e.g. lack of responsibility, of control, employee benefits, etc. #### [How do I know if my contract is caught by IR35?](#8a64945e5d507bb62) Unfortunately there is no black and white test of whether your contract falls under IR35 or not, instead, you can apply tests of the three “principles of employment”. These are: ### Control How much control do you have over what, when, how and where the services are performed? ### Substitution Is the work personal to you as the worker or could your Limited Company send someone else to work on this project? ### Mutuality of obligation Is the client obliged to offer you work and are you as the worker obliged to accept it? There are also other factors that should be taken into account when reviewing IR35 status, including: - Is the contract for a specific project? - Is there financial risk in the contract? - Do you provide your own equipment - Are you supposed to fit in to the client organisation as an employee? e.g. staff parties, use of staff canteen, staff training etc. #### [Should I have a Company Car?](#06b32c5f2d599c2fa) Unless the vehicle is an electric car, then there are fairly hefty benefit in kind tax implications which increase based on the emissions. In some cases, a better option is generally to claim a mileage allowance from the company for using your personal car for business travel. This is currently at a rate of 45 pence per mile up to 10,000 miles per year (6 April to 5 April) and 25 pence per mile thereafter. You can also claim for cycling to work or using a motorcycle. #### [Do I need a business bank account?](#bac4a50ec7b6420c9) Yes, you do need to set up a separate business bank account however we can take care of this for you. We can arrange for a bank account to be set up with Metro Bank (part of Prudential). A major benefit of setting up an account with Metro Bank is we have negotiated free business banking for our clients and we also have read only access to your account so you do not need to send us bank statements each month. #### [What expenses can I claim?](#e877595fb2de96870) We will discuss this with you at your initial meeting and have also produced a handy guide to typical contractor expenses which will be sent through to you. Click [here](/resources/guides/expenses-guide/) to read. #### [Can I bring my spouse or partner into the business?](#97ee7c386b9d90a4f) In some situations it can be very beneficial to bring a spouse into the business as a shareholder, employee or both. If your spouse has an income of less than £40,000 per year then contact us to discuss how this can work in your business. #### [Do you offer Investment Advice? ](#f1d245be1ca3485d3) We do not offer investment advice however we have teamed up with contractor specialist advisors to provide advice on: - Pensions - Mortgages - Investments - Life assurance and critical illness cover - Income protection - Estate planning and wills [Get in touch for more information.](https://sg-accounting.co.uk/contact/) #### [What do SG Accounting do for me?](#8c55bc288cf6862c0) We are a firm of accountants specialising in contractors and freelancers and our service includes: - Unlimited telephone and email support - Company incorporation - Accounts preparation and submission to HMRC and Companies House - Corporation Tax Return preparation and submission - Payroll - Bookkeeping services - VAT returns - Annual Return - IR35 Reviews and advice - Management of all HMRC correspondence - Company Secretarial services - Registered office address - Self Assessment Tax Returns - Income and mortgage references In addition, either in house or through our trusted directors we offer: - Management Accounts (to show you how the business is doing, what are the current tax liabilities during the year and future tax estimates) - Tax Investigation Cover (to cover the cost of accountancy fees in the event of an HMRC enquiry) - Financial and Investment advice (mortgages, insurance, investments and pensions) - Inheritance Tax planning - Professional Indemnity insurance - Business advice and consultancy - Accounting system set up - Online bookkeeping systems - Non-contractor accounts #### [How do I let other people know about SG Accounting?](#22014b795b6311b48) We are very proud that the majority of our new clients come from existing and past client referrals based on the great service provided. If you know a contractor that would benefit from our service then please pass on our details. ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Instagram This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Terms and Conditions](https://sg-accounting.co.uk/sg-accounting-terms-and-conditions/) **Published:** April 17, 2020 **Author:** Jen Winslow **Content:** # Terms and Conditions **Who we are acting for** We are acting for you, the client identified above, only. If you would like us to act for any other parties this must be agreed and confirmed in writing prior to commencement of services. **Period of engagement** This engagement will start on receipt of your authority. The first period for which we will be responsible is tax year ending following the date you instructed us to be your accountant. We will not deal with earlier years unless you specifically ask us to do so and we agree. **Scope of services** We have listed below the work which you have instructed us to carry out. This states your and our responsibilities in relation to the work to be carried out. If we agree to carry out additional services for you, we will provide you with a new or amended schedule of services. Only the services which are listed in the schedules are included within the scope of our instructions. If there is additional work that you wish us to carry out which is not listed in the schedules, please let us know and we will discuss with you whether they can be included in the scope of our work. **Fees** The fees agreed for the services instructed will be as per the prevailing rates on our website here: https://sg-accounting.co.uk/prices/. Our fees will be charged in accordance with our standard terms and conditions. Please review these to ensure you understand the basis of our charges and our payment terms. **Your agreement** The terms and conditions will remain effective from the date of issue until it is replaced or terminated. Either party may vary or terminate our authority to act on your behalf at any time without penalty. Notice of termination must be given in writing. **TERMS AND CONDITIONS OF SERVICE** Unless otherwise stated: The term ‘SG Accounting’ or ‘we’ shall refer to SG Contractor Accounting Limited of 1 Cedar Office Park, Cobham Road, Ferndown, BH21 7SB or any other address from which the company may operate from time to time, otherwise known as SG. The term ‘Client(s)’ shall refer to an individual or group of individuals contracting with SG Accounting for the provision of the services stated below. The term ‘Fees’ or ‘Fees for Services Rendered’ shall refer to the fees payable for the provision of the services stated below. **1. Applicable law** These terms and conditions are governed by, and construed in accordance with, the law of England and Wales. The Courts of England and Wales will have exclusive jurisdiction in relation to any claim, dispute or difference concerning this these terms and conditions and any matter arising from them. Each party irrevocably waives any right it may have to object to any action being brought in those courts, to claim that the action has been brought in an inappropriate forum, or to claim that those courts do not have jurisdiction. **2. Insurance** Insurance policies for services including insurance benefits will only be valid for the months for which a client has already paid the full fee for the services chosen. Insurance benefits are provided by third party companies and Professional Fee Protection (PFP). These third parties may change without notice. Clients who receive insurance benefits agree that their personal information may be provided to the third party for the purposes of providing the client with the insurance benefit. SG Accounting accepts no liability for the services of third parties provided as insurance benefits or for any communications issued by the third party. **3. Anti-Money Laundering Legislation** In common with all accountancy and legal practices we are required to by the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2017 (the “Anti Money Laundering Legislation”) to: Maintain identification procedures for clients and beneficial owners of companies Maintain records of identification evidence and work undertaken for the Client, and, Report, in accordance with the relevant legislation and regulations We may use third parties to validate the identification you have provided. We assume that our clients are honest and law abiding. However, if at any time, there appear to be grounds to suspect (even if we do not actually suspect) that your instructions relate to ‘criminal property’, we are obliged to make a report to the National Crime Agency (“NCA”), but we are prohibited from telling you that we have done so. In such circumstances, we must not act on your instructions without consent from NCA. If NCA do not refuse consent within 7 working days we may continue to act. If NCA issue a refusal within that time, we must not act for a further 31 days from the date of the refusal. ‘Criminal property’ is property in any legal form, whether money, real property, rights or any benefit derived from criminal activity. It does not matter who carried out the criminal activity or how removed the property is from the original crime. Even if you are honest in your dealings, if your property represents a benefit from someone else’s crime, we must still make a report. Activity is considered ‘criminal’ if it is a crime under UK law, no matter how trivial For example, tax evasion is a criminal offence but an honest mistake is not. We will assume that all discrepancies are mistakes unless there is evidence to the contrary. **4. Fees for Services Rendered** Our fees are set at market rate and are dependent on the specific package chosen by the client. Unless otherwise agreed, these fees are to be paid by the client by 12 monthly instalments, due by the first calendar day of every month. In the event that work has to be carried out for a client, which SG Accounting deems to be in excess of those set out in the Schedule of Services, SG Accounting reserves the right to invoice the client for that additional amount. Such additional fees will be paid by the client within 30 calendar days from the date of invoice. In the event that the client leaves within their first 3 months, we reserve the right to charge an onboarding fee of £150-£250+VAT. In the event that a “free catch up” offer was used, we reserve the right to invoice for the completion of the accounts if you were to leave our services within 12 months of joining. Interest will be charged on all overdue debts at the rate stated on the invoice, which is 8% above the Bank of England base rate. In the event that the company is unable to meet its liability in respect of our outstanding fees as and when they fall due then the company’s directors would be personally, jointly and severally liable in respect of our outstanding fees. **5. Commissions or other benefits** In certain circumstances, commissions or other benefits may become payable to us in respect of introductions to other professionals or transactions we may arrange for you. This may include but not limited to bank accounts, financial advisors, liquidations and insolvencies, insurance policies. **6. Ownership of records** In the event of non-payment of our fees for services rendered, we may exercise a particular right of lien over the books and records in our possession and withhold the documents until such time as payment of our invoice is received in full. **7. Reliance on advice** We will endeavour to record all advice on important matters in writing. Advice given orally is not intended to be relied upon unless confirmed in writing. Therefore, if we provide oral advice (for example, during the course of a meeting or a telephone conversation) and you wish to be able to rely on that advice, you must ask for the advice to be confirmed by us in writing. However, bear in mind that advice is only valid at the date it is given. **8. Internal disputes within a client** If we become aware of a dispute between the parties who own or are in some way involved in the ownership and management of a business client, it should be noted that where our client is the business, we would not provide information or services to one party without the express knowledge and permission of all parties. Unless otherwise agreed by all parties, we will continue to supply information to the normal place of business for the attention of the directors. If conflicting advice, information or instructions are received from different directors/principals in the business, we will refer the matter back to the board of directors/the partnership/the LLP and take no further action until the board/partnership/LLP has agreed the action to be taken. **9. File destruction** Whilst certain documents may legally belong to you, unless you instruct us in writing to the contrary, SG Accounting shall destroy correspondence and other papers we store that are more than seven years old, other than documents which we think may be of continuing significance. If the Client requires the retention of any document, the Client must notify SG Accounting of that fact in writing. Unless instructed otherwise in writing by the Client, SG Accounting shall destroy all original documents immediately upon scanning to our systems. **10. Complaints Policy** We are committed to providing a high-quality accountancy service to all our clients. When something goes wrong, we would like you to tell us about it. This will help us to improve our standards. If you have a complaint, please contact us with the details. In the first instance, your complaint should be made by email directly to your ‘Client Director’. Your Client Director will review your complaint fully within a maximum of 14 calendar days and discuss with you any proposed resolutions. If you remain dissatisfied with the outcome of our review, you may escalate your complaint to the Operations Director. Contact details will be provided upon request. **11. Third parties** All accounts, statements and reports prepared by SG Accounting are for your exclusive use within your business or to meet specific statutory responsibilities. They should not be divulged to any other party without our prior consent. No third party shall acquire any rights pursuant to our agreement to provide professional services. **12. Electronic and other communication** We will communicate with you and with any third parties you instruct us to via email or by other electronic means. The recipient is responsible for virus-checking emails and any attachments. With electronic communication there is a risk of non-receipt, delayed receipt, inadvertent misdirection or interception by third parties. We use virus-scanning software to reduce the risk of viruses and similar damaging items being transmitted through emails or electronic storage devices. However, electronic communication is not totally secure and we cannot be held responsible for damage or loss caused by viruses, nor for communications that are corrupted or altered after despatch. Nor can we accept any liability for problems or accidental errors relating to this means of communication, especially in relation to commercially sensitive material. These are risks you must accept in return for greater efficiency and lower costs. If you do not wish to accept these risks, please let us know and we will communicate by hard copy, other than where electronic submission is mandatory. Any communication by us with you sent through the post or DX system is deemed to arrive at your postal address two working days after the day that the document was sent. When accessing information held electronically by HMRC, we may have access to more information than we need and will only access records reasonably required to carry out the contract. You are required to keep us up to date with accurate contact details at all times. This is important to ensure that communications and papers are not sent to the incorrect address. **13. Period of engagement and termination** Our work will begin as described in the Engagement Letter. Except as stated in that letter, we will not be responsible for periods before that date. Each of us may terminate this agreement by giving not less than 30 days’ notice in writing to the other party, except where you fail to cooperate with us or we have reason to believe that you have provided us or HMRC with misleading information, in which case we may terminate this agreement immediately. Termination will be without prejudice to any rights that may have accrued to either of us prior to termination. In the event of termination of this contract, we will endeavour to agree with you the arrangements for the completion of work in progress at that time, unless we are required for legal or regulatory reasons to cease work immediately. In that event, we shall not be required to carry out further work and shall not be responsible or liable for any consequences arising from termination. If you engage us for a one-off piece of work (for example, advice on a one-off transaction or preparation of a tax return for one year only), the engagement ceases as soon as that work is completed. The date of completion of the work is taken to be the termination date, and we owe you no duties and we will not undertake further work beyond that date. Where recurring work is provided (for example, ongoing compliance work such as the completion of annual tax returns), the engagement ceases on the relevant date in relation to the termination as set out above. Unless immediate termination applies, in practice this means that the relevant termination date is: 30 days after the date of notice of termination or a later agreed date. We owe you no duties beyond the date of termination and will not undertake any further work. **14. Disengagement** Should we resign or be requested to resign, we will normally issue a disengagement letter to ensure that our respective responsibilities are clear. Should we have no contact with you for a period of 12 months or more, we may issue to your last known address a disengagement letter and thereafter cease to act. We reserve the right following termination for any reason to destroy any of your documents that we have not been able to return to you after a period of six months unless other laws or regulations require otherwise. **15. Disclaimer** We will not be liable for any loss suffered by you, the client, or any third party as a result of our compliance with the Anti-Money Laundering Legislation or any UK law or at all. We will provide our professional services outlined in these terms and conditions with reasonable care and skill. However we will not be responsible for any losses, penalties, surcharges, interest or additional tax liabilities arising from the supply by you or others of incorrect or incomplete information, or your or others’ failure to supply any appropriate information. **16. Limitation of liability** We will provide our services with reasonable care and skill. Our liability to you is limited to losses, damages, costs and expenses directly caused by our negligence, fraud or wilful default. We will not be liable if such losses, penalties, interest or additional tax liabilities are caused by the acts or omissions of any other person, or due to the provision to us of incomplete, misleading or false information, or if they are caused by a failure to act on our advice or a failure to provide us with relevant information. In particular, where we refer you to another firm whom you engage with directly, we accept no responsibility in relation to their work and will not be liable for any loss caused by them. We will not be liable to you for any delay or failure to perform our obligations under this engagement letter if the delay or failure is caused by circumstances outside our reasonable control. We will not be responsible or liable for any loss, damage or expense incurred or sustained if information material to the service we are providing is withheld or concealed from us or misrepresented to us. This exclusion shall not apply where such misrepresentation, withholding or concealment is or should (in carrying out the procedures that we have agreed to perform with reasonable care and skill) have been evident to us without further enquiry beyond that which it would have been reasonable for us to have carried out in the circumstances. You agree to indemnify us and our agents in respect of any claim (including any claim for negligence) arising out of any unauthorised disclosure by you or by any person for whom you are responsible of our advice and opinions, whether in writing or otherwise. This indemnity will extend to the cost of defending any such claim, including payment at our usual rates for the time that we spend in defending it. £500,000 shall be the maximum aggregate liability of this company, its directors and employees to all persons to whom the engagement letter is addressed and also any other person that we have agreed with you may rely on our work. You have agreed that you will not bring any claim of a kind that is included within the subject of the limit against any of our directors or employees on a personal basis. **17. Agreement of terms** The terms and conditions will remain effective from the date of issue until it is replaced or terminated. Either party may vary or terminate our authority to act on your behalf at any time without penalty. Notice of termination must be given in writing. From time to time we may want to send you information about our services by post, telephone, email or SMS. By accepting these terms and conditions you are agreeing to us contacting you. If at any time you wish to opt out of any such communications please contact us in writing at clientservices@sg-accounting.co.uk or by telephoning us on 01962 867550. **18. Group Affiliation and Information Sharing** SG Contractor Accounting Limited is a member of The Affinity Group, a network of independently managed professional companies. Each member company within the group is a separate legal entity and individually responsible for its own actions, contracts, and liabilities. Membership of the group does not imply any partnership, agency, or joint venture arrangement. Information provided to SG Contractor Accounting Limited may be shared across The Affinity Group for purposes including operational efficiency, administrative management, regulatory compliance, and quality assurance. All personal data sharing is undertaken in accordance with UK data protection legislation, including the UK GDPR and Data Protection Act 2018. **SCHEDULE OF SERVICES** Our services are provided based on the instructions you provide to us to ensure you the appropriate support. However, it is important that you acknowledge that in law, it is the directors of a company that are responsible for its operation. Those responsibilities include (but are not limited to): Follow the company’s rules, shown in its articles of association Keep company records and report changes File your accounts and your Company Tax Return Tell other shareholders if you might personally benefit from a transaction the company makes **Pay Corporation Tax** To operate IR35 where necessary under the off-payroll working legislation Operate within prevailing tax legislation with respect to claiming expenses **Accountancy Services** You have instructed us to provide the following to you dependant on services chosen: Initial meeting to discuss your personal circumstances ensure our advice is tailored to you Preparation and submission of Abbreviated Accounts to Companies House Preparation and submission of Full Accounts to the HM Revenue and Customs Preparation and submission of Confirmation Statement to Companies House Use of our office as a Registered Office Address (for statutory post only and not to be used as a general correspondence address). **Maintaining the Company Statutory Records** Quarterly Management Accounts prepared in alignment to the VAT quarter for the client. Advice on the claiming of expenses (we will provide you with guidance and also discuss your particular circumstances) **Taxation Services** You have instructed us to provide the following services to you: Preparation and submission of Corporation Tax Return to the HM Revenue and Customs Preparation and submission of quarterly VAT Returns Preparation and submission of monthly PAYE Returns Preparation and submission of annual PAYE Returns including EPS, P11d and P60. Preparation and submission of a personal tax return for the Director including one additional employment page. Unlimited telephone and email support relating to your contractor tax affairs Advice on the claiming of expenses (we will provide you with a guide and discuss your particular circumstances). **VAT** We will discuss with you the registration thresholds for VAT and whether the use of the Flat Rate Scheme is appropriate. In our assessment of whether the Flat Rate VAT scheme is appropriate we will discuss with you and assess whether you meet the definition of a limited cost trader. We will only register you for the Flat Rate Scheme if you give us your express consent either in writing by email or via our sign up process. You will receive any profits generated from use of the scheme in full. --- ### [Refer a friend 2025](https://sg-accounting.co.uk/clients/refer-a-friend/) **Published:** January 6, 2025 **Author:** Janet Bower **Content:** # Refer – reward – repeat! £100 reward for every friend you refer this year ## A thank you for recommending us ![headshot image of a man smiling at the camera](https://sg-accounting.co.uk/wp-content/uploads/2024/12/SG-RAF-1-Blue.png "SG RAF 1 Blue | SG Accounting") **1.** Let your friend know about SG Accounting using the form. ![man looking up whilst holding his chin and smiling](https://sg-accounting.co.uk/wp-content/uploads/2024/11/SG-RAF-2.png "SG RAF 2 | SG Accounting") **2.** Have your friend mention your name when they sign up with us. ![two men shaking hands and smiling](https://sg-accounting.co.uk/wp-content/uploads/2024/12/SG-RAF-3-Blue.png "SG RAF 3 Blue | SG Accounting") **3.** £100 will be credited to your account within 6 weeks of them joining us as a monthly client. Plus, there’s no limit to the number of referrals you can make! ### Terms and Conditions Refer a friend to SG Accounting and when they join as a monthly client, you’ll receive £100 credited to your account with us within 6 weeks of them joining us. Just ask them to mention your name when joining, and let them know we’ll be in touch. There are no limits to the number of friends you can refer. #### Refer a friend (or 3) - X/Twitter This field is for validation purposes and should be left unchanged. - Your Name\* - Your Email Address\* - Your Friend's Email Address\* | | [![](https://sg-accounting.co.uk/wp-content/plugins/gravityforms/images/list-add.svg "Add a new row")](javascript:void(0);) [![](https://sg-accounting.co.uk/wp-content/plugins/gravityforms/images/list-remove.svg "Remove this row")](javascript:void(0);) | |---|---| Click on the + icon to add another email address - Your Personal Message\*Hi, I think you’ll like SG Accounting – I use them for all my accounting needs and think they’re great. I also get a direct line to my accountant for tax advice. When you join you’ll get your first three months half price, PLUS you'll get three months free fee protection cover which includes business legal helpline. You can call them on 01962 867550, email newbusiness@sg-accounting.co.uk or fill in the enquiry form here: https://sg-accounting.co.uk/contact/ Have a look and don’t forget to mention my name when you enquire. Thanks! Send Email ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less - Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less - Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less - Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less - Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Nnamdi Ezulike 3/12/2020 Great experience dealing with SG Accounting, made everything very easy and idiot proof for somebody who has never been a contractor. Resolved any queries and issues swiftly, with a minimum amount of fuss. Highly recommend SG Accounting read moreread less Paul R 3/12/2020 I've been working with the SG Accounting team for a few years now. I was new to contracting & was quite daunted initially. Richard Murray was my initial point of contact and helped set up my business. Richard is very good at explaining things in a simple way. Their accountancy process is simple, and support for any queries is dealt with promptly.. I would personally recommend SG and Rich Murray, he's a very adept and professional. I look forward to continuing to work with you all. Thanks to the rest of the team. read moreread less - andydmead 3/12/2020 I've recently signed up with SG Accounting and have to say their on-boarding, their explanation of what is required and how and when things need to happen has been superb. They have ensured we have had both a telcon and met face to face and I feel confident I am in very safe hands. read moreread less Cubby Fox 3/12/2020 Great service from the team at SG. Personal, responsive, can explain things to someone with zero accounting knowledge! I especially like dealing with Lee - he has answered so many of my last minute questions. Highly recommend. read moreread less Lakhbir Badeshia 3/12/2020 I found SG Accounting to be extremely structured in their overall approach. The service they offer is very good as they not only have robust processes to support you but they have a good breadth of skillset to cover both accounting, tax and legal related discussions. All of this coupled with online tools makes them a very good firm to support you. On the whole I would very much recommend their services. read moreread less Nadine Appiah 3/12/2020 I have recently joined the contracting world and was referred by a colleague to SG Accounting. My experience to date has been effortless. From the very introductory phone call to the team in Hampshire and meeting Laura (my personal accountant) in London. All my worries were taken care off. SG took control of the full set up and promptly responded all emails. I will most definitely refer SG to any contractor looking for a 1st class front to back service. I cannot thank you enough. read moreread less - Andrew Faiers 3/12/2020 I have been using SG Accountants for over 2 years and from the first introductory meeting with Dan the service has been excellent. I have been really impressed with the professional, helpful and friendly approach made by all members of the team. All questions and queries have always been dealt with promptly, often on the same day which highlights their positive approach to clients. I will not be looking elsewhere! read moreread less Riccardo Reato 3/12/2020 Just started 2 months ago my work relationship with SG accounting. The setup of my business has been very quick and smooth, communication has been great, and SG professionals are very knowledgeable and helpful! Really happy of my choice, and would recommend SG to anyone looking for a reliable accountancy partner. read moreread less Leon Mediavilla 3/12/2020 An excellent firm with a comprehensive advisory service, whose are always on hand to promptly answer my questions. I needed clarification in many areas when I first started contracting, but Nadeem at SG made it easy and provided advice about all my issues. I would highly recommend their services to any contractor currently looking for an accountancy firm. read moreread less Ben Folwell 3/12/2020 Great hardworking team at SG. I've been contracting for the last couple of years and SG have helped brilliantly with not just the day to day running of the company but also the advice and help to set the company up initially. I would happily recommend SG to any colleagues requiring accounting services. Their fixed price model is very handy for controlling accounting costs. Rich Murray has been great with any queries I have and is always on hand to offer advice and support when I need it. Face to face meetings conducted in the pub always go down well. Rich however, never forgets when it's my round! read moreread less - Ksenia Belova 3/12/2020 I regularly recommend SG Contractor Accounting to my friends and colleagues, as I am continuously impressed with their service standard. My initial contact and in-person meeting with Dan set the scene for an efficient and supportive working relationship. The team is extremely responsive, professional, helpful and proactive. They have never failed to provide a prompt response to many of my ad hoc queries, and in addition are always proactive when time comes to returns or any other deadlines. The ability to use accounting software as part of some of the packages is extremely helpful as it links in with SG's own systems and means information flow is streamlined. I think the services is fantastic and great value for money and I have no desire to go anywhere else. Thanks SG Team! read moreread less Mark Piper 3/12/2020 I’m new to contracting and doing my own financials was a bit daunting, but Laura and the team at SG have made it really simple. Easy process and always very prompt to answer any questions. read moreread less Becky John 3/12/2020 Fantastic support always from SG. Responsive, knowledgeable and nothing is too much trouble. I came to them via a recommendation and would recommend them to you, too read moreread less Labinot Z 3/12/2020 SG Accounting have been great at helping me setup and have managed my books continuously for me. Nadeem is my head accountant and hes been very thorough and transparent with me. Great Company. read moreread less --- ### [Making Tax Digital](https://sg-accounting.co.uk/clients/making-tax-digital/) **Published:** February 9, 2026 **Author:** Janet Bower **Content:** # MTD ITSA ## Making Tax Digital for Income Tax – what it means for you and how we can help From April 2026, many self-employed individuals and landlords will need to follow new digital reporting rules. We’ll guide you through everything, set up the right software, and handle your quarterly submissions – keeping you compliant with HMRC. ## What is Making Tax Digital for Income Tax? Making Tax Digital (MTD) is a government initiative designed to move tax reporting online. Under MTD for Income Tax Self Assessment (MTD ITSA), affected taxpayers will record income and expenses digitally and submit quarterly updates to HMRC using approved software. This aims to give HMRC more frequent, accurate information. You may need to follow the MTD for Income Tax rules if you: - Are self-employed - Receive rental income as an individual (not through a limited company) - Have combined income from self-employment and/or property above the relevant HMRC thresholds This includes individuals with one or multiple sources of income, as HMRC looks at your total qualifying income, not each activity separately. If you’re unsure whether this applies to you, we’ll check your position and explain what – if anything – you need to do. The exact income thresholds and start dates are explained in the next section. ## When is MTD for Income Tax happening and who will be affected? HMRC is introducing MTD for Income Tax in phases. The rollout begins in April 2026, starting with those on higher incomes before expanding to more taxpayers the following year. ### Phase 1 – from April 2026 MTD for Income Tax becomes mandatory for individuals with: *Total qualifying income over £50,000 -From self-employment and/or property* ### Phase 2 – from April 2027 MTD expands to individuals with: *Total qualifying income over £30,000* All the same reporting rules apply. ### Phase 3 – from April 2028 Planned expansion to individuals with: *Total qualifying income over £20,000* This brings most smaller sole traders and landlords into MTD, even if they are currently exempt. ## Who is not included (yet)? - Partnerships – HMRC has confirmed they will not be required to join in 2026 or 2027. - Individuals with qualifying income under £20,000 – currently excluded; HMRC will review this group in future. - Limited companies are not included in this phase. If you’re unsure and you’re an SG Accounting client, we can quickly confirm whether the new rules apply to you. ## What will you need to do under MTD? You will be required to: - Keep digital records of your income and expenses - Submit quarterly updates to HMRC - Make an end of year submission - Complete a Final Declaration It’s a significant shift – but with the right support and software, it can be straightforward. ## How SG Accounting supports you with MTD ITSA We’re already MTD-ready, working closely with software partner [FreeAgent](https://sg-accounting.co.uk/freeagent/). Our MTD service takes the pressure off you and ensures smooth, accurate submissions every time. Our MTD Service Includes: - Registration for MTD with HMRC - Software setup and configuration on [FreeAgent](https://sg-accounting.co.uk/freeagent/) - Guidance on keeping compliant digital records - Quarterly reviews and submission to HMRC - Support with your Final Declaration - Ongoing access to your SG accountant for advice ## Pricing for MTD ITSA To keep MTD simple and affordable, our service is charged per quarterly submission, with a one-off setup fee in your first year. This is in addition to our standard Sole Trader/Tax Return fees. ### Initial setup: £95 + VAT (one-off) This includes: - Registering you for MTD with HMRC - Setting up your MTD connection in [FreeAgent](https://sg-accounting.co.uk/freeagent/) - Reviewing and configuring your digital record structure - Providing initial MTD guidance and onboarding support ### Quarterly submission: £75 + VAT per submission This includes: - Review of your digital records for the quarter - Preparation and submission of your MTD update to HMRC - Support for categorising transactions and resolving queries - Ensuring each submission is accurate and compliant ### Example annual cost Setup (year one only): £95 + VAT Quarterly submissions: 4 × £75 = £300 + VAT Total in year one: £395 + VAT Total in following years: £300 + VAT *Transparent pricing. Pay only for the submissions you need. Please note that these fees are in addition to our standard Sole Trader/Tax Return fees.* [Ready to get MTD-ready?](#form1) ## Why start preparing early? Even though mandatory MTD reporting doesn’t begin until 2026, preparing early simply means making sure your software, records and processes are ready ahead of time – not necessarily opting into MTD before you have to. Getting set up early means: - Avoiding last-minute stress when MTD goes live - Ensuring your software and bank feeds are working smoothly - Building good digital recordkeeping habits now - Reducing the risk of errors once quarterly reporting starts - Making the transition easier for both you and your accountant You don’t need to start submitting quarterly returns early, but you will benefit from having everything in place well before your mandatory start date. We recommend clients who must join MTD in 2026 or 2027 begin their setup asap, so everything is running smoothly before the first quarterly update is due. The only fee payable for doing this would be the set-up fee of £95. ## FAQs ### [Will I still complete a Self Assessment tax return under MTD? ](#bd8a65f9b45fee143) Yes, you will still need to complete a tax return by the 31st January each year. ### [Do I need new software? ](#1d1881db8fec8615a) If you already FreeAgent, you’re in great shape. If not, we’ll help you get set up. You’ll need separate accounts for property and sole trade income if you have both – again, all part of the service. ### [Will MTD change how much tax I pay? ](#76e679df166da5050) No – MTD doesn’t change tax rules, allowances, or rates. It only changes how you report your income and expenses. You may feel more organised because your records are updated quarterly, but your tax bill is still calculated in the same way. ### [What do I have to do for MTD ITSA? ](#3376c6160a0d31b96) You will be required to: - Keep digital records of your income and expenses - Submit quarterly updates to HMRC - File an end of year submission - Complete a Final Declaration ### [Can SG handle all my submissions for me? ](#8557971373beda068) Yes. Our MTD service covers everything from setup to quarterly updates and year-end workflows. ### [Does MTD mean I must pay tax quarterly? ](#25cfa6a4b6eb81275) No. You still pay tax once or twice a year, just as you do now. The quarterly updates are for reporting only – they don’t trigger tax payments. ### [What counts as ‘qualifying income’ under MTD? ](#b2530db530ef9f570) HMRC defines qualifying income as the total of: - Self-employment income (sole trader) - Rental income (property) It is calculated before expenses, and income from separate businesses or multiple properties is added together. ### [What happens if my income moves above or below the threshold? ](#0276a6644daafa981) If your income rises above a threshold, you may enter MTD from the next tax year. If your income falls below a threshold, you may become exempt – but the rules are complex, and HMRC requires evidence. SG will monitor this for you and advise when you need to join or can safely exit. ### [Can I continue using spreadsheets under MTD? ](#e142cec02ff41c811) Only if they connect to bridging software compatible with MTD — but this is more work and often unreliable. Because most SG clients already use FreeAgent, we strongly recommend continuing or migrating to FreeAgent for a seamless experience. ### [Do I need a separate MTD account for each business or property? ](#da6315f78467228af) No. MTD connects to you as an individual taxpayer, not each business. However, each business type (self-employment vs property) requires its own set of quarterly updates – and we handle this for you. ### [Will I still need to send receipts to my accountant? ](#caf4c3f6c17c37bb1) Yes, you still need to keep evidence of business expenses – but digital copies are fine. FreeAgent has a mobile app where you can photograph receipts and upload them instantly. ### [What happens if I miss a quarterly MTD deadline? ](#5ce932acabe4d7c3d) HMRC will introduce a points-based penalty system. Repeated missed submissions could trigger financial penalties. SG’s quarterly submission service is designed to prevent this – we’ll keep you on track and handle deadlines for you. ### [Do landlords with multiple properties have to report each property separately for MTD? ](#96910258fc39f0edd) No. Rental income is grouped together for quarterly updates. We will advise you clearly on how to report each type. ### [Can I opt into MTD early? ](#eb238eec6439c8cd5) Yes, voluntary early sign-up is technically possible – but HMRC’s pilot programme has limitations and may not accept everyone yet. We can help you decide whether early adoption would benefit you. ### [Will SG still handle year-end accounts? ](#7018fce46b57bbf07) Yes. Under MTD, the end of year submission replaces some parts of your year-end work, but you still need year-end adjustments and a Final Declaration. We will manage all of this as part of your service. ### [Is MTD ITSA the same as MTD for VAT?](#380b67192c2abf976) No. MTD for VAT began earlier and applies to VAT-registered businesses. MTD for Income Tax is a separate system – even if you already comply with MTD for VAT, you must still join MTD ITSA when applicable. ### [Will HMRC be able to see my bank account?](#5d7485e6f9a17f3e0) No. HMRC only receives the information you submit through your MTD software – they do not get direct access to your banking or bookkeeping systems. ### [Can SG access my accounting software to help me? ](#6def723807fcf88fa) Yes, with your permission. [FreeAgent](https://sg-accounting.co.uk/freeagent/) allows your accountant to log in, check transactions, correct issues, and prepare your quarterly submissions. ### [What do I need to do before MTD starts? ](#02a39c77e7db3eb33) Typically: - Make sure you’re on [FreeAgent](https://sg-accounting.co.uk/freeagent/) - Connect bank feeds - Keep your bookkeeping up to date - Confirm your qualifying income - Allow SG to register you for MTD We’ll walk you through everything – most clients only need to spend a few minutes on setup. ## Ready to get MTD-ready? We’re here to make it simple. Whether you’re an existing SG client or looking for an accountant who can manage MTD for you, our team is ready to help. ## **Existing clients** Get started with MTD support If you have further questions or are ready to get started either: Contact your Client Director Call: [01962 896968](tel:01962896968) Email: <enquiries@sg-accounting.co.uk> **New to SG Accounting?** Get in touch for more info - Company This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Simple Accounting for Sole Traders](https://sg-accounting.co.uk/simple-accounting-for-sole-traders/) **Published:** July 29, 2026 **Author:** Damteq **Content:** 1. [Home](https://sg-accounting.co.uk) 2. Simple Accounting for Sole Traders # Simple Accounting for Sole Traders With SG Accounting you’ll get a jargon-free, hassle-free accounting service for your sole trader business. [Speak with our team](https://sg-accounting.co.uk/contact/) [Our pricing](https://sg-accounting.co.uk/prices/) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![Freeagent making tax digital ready badge](https://sg-accounting.co.uk/wp-content/uploads/2026/07/freeagent-making-tax-digital-ready-badge.webp "freeagent-making-tax-digital-ready-badge | SG Accounting") ### Stress Free Filing Plus Making Tax Digital filings if needed ### Software Included [FreeAgent](https://sg-accounting.co.uk/freeagent/) bookkeeping software included – saving £396 per year ### Tax Advice and Self Assessment Tax Return Included as standard [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) # Everything you need for £49 + VAT per month We offer a fixed fee service with no hidden surprises. Our Sole Trader accounting package is just £49 +VAT per month. For this, you get all the necessary Companies House and HMRC submissions as well as [FreeAgent](https://sg-accounting.co.uk/freeagent/) Bookkeeping software included. [Speak with our team](https://sg-accounting.co.uk/contact/) [See our prices](https://sg-accounting.co.uk/prices/) ![A happy couple working through paperwork](https://sg-accounting.co.uk/wp-content/uploads/2026/07/a-happy-couple-working-through-paperwork.webp "a-happy-couple-working-through-paperwork | SG Accounting") ### Need advice on Ltd vs Umbrella? [Give us a call](tel:+441962896968) [See our prices](/prices/) ## Why choose SG for Sole Trader Accounting #### [We can help you decided between Sole Trader and Ltd if you’re not sure](#d0c07604d8bb3a9e7) We’ll help you determine if and when moving from sole trader to limited company makes sense for your business. #### [One main point of contact with your senior (Director level) accountant ](#894d49024f95fed9f) You’ll have a direct line to your personal accountant and their team of tax and accounts specialists. They’ll meet you via video call to help create a bespoke tax efficiency plan for you. #### [30 years of experience - you’re in safe hands with SG](#1303b454a1621696b) We are an independently owned and run business dedicated to offering great service to contractors. Professional qualified accountants since 1995, you know you’re in safe hands with SG #### [Call whenever you like – no charge for advice](#e633dac83b4daaf2c) You can call your accountant and their expert team whenever you like – there’s no charge for advice. #### [Access to other financial services](#de9320cd9d068075d) All of our clients get access to other services such as pensions, wealth management advice and accounting and tax support with other business interests such as buy to let properties and crypto currency ![Team meeting in a glass meeting room](https://sg-accounting.co.uk/wp-content/uploads/2026/07/team-meeting-in-a-glass-meeting-room.webp "team-meeting-in-a-glass-meeting-room | SG Accounting") ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Phone This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [About Us](https://sg-accounting.co.uk/about-sg-accounting/) **Published:** July 31, 2015 **Author:** Dan Mepham **Content:** # About SG Accounting With a solid heritage and masses of experience in the contractor and small business accounting market, our independent business offers an expert accounting service that’s evolved with the market and truly supports the modern business owner. [![£59.50 per month plus FREE accounts catch-up](https://sg-accounting.co.uk/wp-content/uploads/2025/05/offer-price-banner-halfprice-2025c.png "offer-price-banner-halfprice-2025c | SG Accounting")](/prices/) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Who are we? Established in 1995 to service the accountancy and taxation needs of professional contractors and small businesses, we have offices in Winchester, Southampton, Bournemouth and London, but serve clients across the UK by phone, email and zoom. During this time, we’ve supported many contractors and small business owners with their accounting needs including advising on the ever-changing legislation and compliance requirements. With the evolution of the business and economic landscape over the years, we’ve adapted our accounting service and supported our clients through thick and thin. Being independently owned and managed, we’re agile and forward-thinking and pride ourselves on still offering a personal, bespoke service in a market place full of private-equity based ‘factories’ So if you’re looking for the best specialist small business or contractor accounting, tax and financial advice, you’re in the right place. [Get in touch](#enquiryForm) [![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting")](https://www.fcsa.org.uk/fcsa-member/sg-accounting-sg-umbrella/) SG Accounting is an accredited member of The Freelancer and Contractor Services Association (FCSA). FCSA accreditation demonstrates to contractors that we adhere to rigorous compliance standards and act both professionally and ethically within the UK tax, employment and regulatory laws. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## What you get with SG Accounting ![Value](https://sg-accounting.co.uk/wp-content/uploads/2021/06/value-icon.png "value-icon | SG Accounting") ### **Value for Money** **£119** - Fixed fee packages or build your own - Unlimited advice from your personal accountant - No switching, catch-up or joining fees, tie-in periods or leaving fees - [FreeAgent](https://sg-accounting.co.uk/freeagent/) included - [Free Fee Protection Cover for 3 months plus Business Legal Helpline](https://sg-accounting.co.uk/3-months-free-fee-protection-cover/) ![Advice and Information](https://sg-accounting.co.uk/wp-content/uploads/2021/06/advice-i-icon.png "Advice and Information | SG Accounting") ### **Advice that saves** **££** - Bespoke tax planning advice (including crypto) to suit individual circumstances - Wealth management review with our trusted partners to discuss pension and insurance needs - Specialist support for other business interests including buy to let and start-ups ![Reassuring Heritage](https://sg-accounting.co.uk/wp-content/uploads/2022/09/reassuring-icon.png "| SG Accounting") ### **A Reassuring Heritage** - Professional, qualified accountants working with contractors and small businesses since 1995 - Proud of our 5\* review ratings - We’ve built our business primarily on recommendation - FCSA accredited for assured high standards - Proudly independent [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) [See our prices](https://sg-accounting.co.uk/prices/) Call us now on [01962 896968](tel:01962896968) [Enquire Now](#enquiryForm) ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less - Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less - Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less - Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less - Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Derren Cooke 3/12/2020 I have been using SG contractor accounting for about 10 years now, I don't feel the need to go anywhere else as I always get great service and advice when needed. Even though I have seen the company grow they haven't lost that personal touch. They are very efficient in what they do which let's me get on with what I am good at. I am hoping for many more years of top quality service from them. I can highly recommend. read moreread less andydmead 3/12/2020 I've recently signed up with SG Accounting and have to say their on-boarding, their explanation of what is required and how and when things need to happen has been superb. They have ensured we have had both a telcon and met face to face and I feel confident I am in very safe hands. read moreread less - Andrew Faiers 3/12/2020 I have been using SG Accountants for over 2 years and from the first introductory meeting with Dan the service has been excellent. I have been really impressed with the professional, helpful and friendly approach made by all members of the team. All questions and queries have always been dealt with promptly, often on the same day which highlights their positive approach to clients. I will not be looking elsewhere! read moreread less Jon L 3/12/2020 I've been with SG for about 22 years now, I initially dealt with Sarah and Richard directly, but SG have grown a lot in recent times. I have recommended them to many colleagues and they remain good value, offering a timely, personal service. read moreread less Guy Hanson 3/12/2020 The team at SG are very helpful and knowledgeable. From the outset, they have covered all of my company financial requirements and have assisted with personal tax too. SG was recommended to me and I can do the same. read moreread less Harpender Singh 3/12/2020 I was referred by my family to SG and they are the best. I am glad I switched over. I am on the top package which works nicely for me with less to do. read moreread less - Steve Mcfarlane 3/12/2020 SG have been efficient, proactive and responsive in the 2 years that I have used them as my company accountancy service. My questions are always answered in a timely manner and the team I deal with are always courteous and professional in their communications. read moreread less Labinot Z 3/12/2020 SG Accounting have been great at helping me setup and have managed my books continuously for me. Nadeem is my head accountant and hes been very thorough and transparent with me. Great Company. read moreread less Adrian 3/12/2020 To get started, I was offered a face to face introductory meeting with Laura, my Account Manager, but as I was very busy I couldn't fit this into my diary so we did this by phone instead. Laura helpfully answered the questions I had about how I should operate tax efficiently and some other queries I had. Since then, all I've had to do is keep track of my invoices and bank account entries in Free Agent and SG take care of everything from there. Any further questions I have had have been answered very quickly. It all couldn't be easier and I can highly recommend SG. read moreread less Yosef Tilahun 3/12/2020 I just wanted to share a quick note and let you know that you guys do a really good job. I’m glad I decided to work with you. I can confidently say that I experienced the very best accounting service at SG Accounting service. It’s great how easy your spreadsheet is to update and manage. I never have any problem at all. What a remarkable staff member you have. You have a customer for life! Please keep up the great work. Yosef T. read moreread less - Paul R 3/12/2020 I've been working with the SG Accounting team for a few years now. I was new to contracting & was quite daunted initially. Richard Murray was my initial point of contact and helped set up my business. Richard is very good at explaining things in a simple way. Their accountancy process is simple, and support for any queries is dealt with promptly.. I would personally recommend SG and Rich Murray, he's a very adept and professional. I look forward to continuing to work with you all. Thanks to the rest of the team. read moreread less Keith Humphreys 3/12/2020 Found these guys on the internet after I'd heard some bad press about SJD. I first dealt with Dan Mepham who took me through the on-boarding process and from there on the service has always been top class. Everything I've asked them to do, they've done, from switching VAT schemes to migrating onto Freeagent. Highly recommended!!! read moreread less Steve Cliff 3/12/2020 I have been with SG since starting contracting in 1996 and was impressed from the start when Richard Stilwell travelled to Warrington from Winchester to introduce himself and the company. SG have always delivered excellent service and I would not hesitate to recommend them to others. read moreread less John Hall 3/12/2020 Setting up my new venture was made so much easier by SG. From initial advice, through setting up the limited company, to getting my accounting package prepared and bank account set up. Now that I have been up an running for a while they have been a great support with the day to day issues, so that I can get on with MY business read moreread less ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Name This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Reviews](https://sg-accounting.co.uk/about-sg-accounting/reviews-and-testimonials/) **Published:** February 3, 2020 **Author:** Dan Mepham **Content:** # Reviews ## You’re in good company Who better than to tell you why you should join SG, than our current clients? We’re really proud of our reviews and the feedback that we get about our service. Making clients happy is what makes us tick, and the number of new clients that come to us via referrals is testament to that. So have a read, and give us a call so you can join this happy crew. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## What our satisfied clients say Don’t just take our word for it, hear what our clients have to say about us. Whether you’re just getting started, or looking to switch accountants, our expertise and accounting packages could be perfect for you. Thanks to everyone at SG Accounting, the level of service SG provides is excellent. I’ll be sure to recommend SG to anyone that’s in need of an accountancy firm. Mike S SG Accounting provides a first class accounting service with quick responses to queries and a reliable notification system for the usual business submissions and payments. I really appreciate SG Accounting’s commitment to provide a comprehensive view on the legislative changes which could affect my business Maciej Z I found the entire experience of moving from permanent to contract easy, a lot of that was down to Dan’s guidance and setting up the company, insurance and VAT etc. Gary C Over the 20 years I have been with SG Accounting I can honestly say that I’ve not had a moments worry nor a missed deadline. They are are my trusted partner within my business and have afforded me the peace of mind to go out and do my thing safe in the knowledge that they are all over the administration and proactively making sense of forthcoming legislation changes to take away fear uncertainty and doubt – Top top team. John B SG Accounting has been superb, patient and 100% committed with quick responses to any questions or issues. Their professionalism is second to none and they go well above and beyond what you would expect. I would not hesitate in the slightest in recommending SG Accounting, to take care of your finances and know that everything will be done correctly and quickly Adam W As a freelance web designer I wanted to set up my own business, but I wanted to spend my time delivering websites for clients and not faff about trying to appease HMRC and their many confusing forms and procedures. SG Accounting advised on everything from registering the business, setting up bank accounts, record keeping and ensuring I was operating tax efficiently. I was able to spend my time doing what I do best, running my business! I am confident I am in expert hands. Jonathan A As someone who is rather inexperienced on the accounting front, I have been so fortunate to have the fantastic team at SG Accounting just a call or email away. They are professional, friendly, and endlessly patient with my many questions. Caroline B ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - LinkedIn This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Accounting Prices](https://sg-accounting.co.uk/prices/) **Published:** April 17, 2020 **Author:** Dan Mepham **Content:** 1. [Home](https://sg-accounting.co.uk) 2. Accounting Prices Clear pricing, great value service Simple packages. Fixed monthly fees. No hidden costs or surprise invoices. Choose the accounting and tax support that’s right for your business, with optional extras available and unlimited expert advice included as standard. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Our pay-monthly packages - [#### Limited Company Accounting](#tab-87ad020f4632bfb36a3) - [#### Sole Trader Accounting](#tab-202b39f47114fbc84b7) - [#### Umbrella Company Payroll Service](#tab-54d1bb2b59bc69ff501) - [#### Limited Company Accounting](#tab-87ad020f4632bfb36a3) £119 Now £59.50 ## Limited Company Accounting Everything you need is included: Your own dedicated accountant, unlimited expert advice and FreeAgent bookkeeping software – with no contracts or hidden fees. ### £59.50 + VAT per month for the first 3 months, then £119 + VAT per month Interested? Let’s start today [Speak with our team](/contact/) or [Sign up now](/sg-accounting-signup-form/) ### What’s included? | Core Accounting | |:--| | FreeAgent software | | Set-up or Switch Service | | | Free Accounts catch-up | | | Registered office address | | | HMRC and Companies House submissions | | | Payroll for one employee | | | One Self Assessment Tax Return | | | References | | | Service and Benefits | |:--| | FCSA accreditation | | | Dedicated Client Director | | | £100 reward for every new client you refer | | | Tax planning advice | | | Unlimited telephone and email support | | | Free financial reviews and wealth management advice | | | Video Calls | | | Fee Protection Cover **Free for 3 months** Then £14.50 + VAT per month | | Additional Services (optional) | |:--| | Payroll for an additional employee | **£10** + VAT per month | | 2nd Self Assessment Tax Return | **From £18** + VAT per month | | Monthly Management Accounts | **£40** + VAT per month | | Bookkeeping | **£40** + VAT per month | | Preferential rates for written IR35 contract reviews | **Available to add** | | Preferential rates for small business, crypto, personal and buy to let accounting | **Available to add** | ### Limited Company Accounting £59.50 + VAT per month for the first 3 months, then £119 + VAT per month Interested? Let’s start today [Speak with our team](/contact/) or [Sign up now](/sg-accounting-signup-form/) - [#### Sole Trader Accounting](#tab-202b39f47114fbc84b7) ## Sole Trader Accounting Fixed fee service with no hidden surprises. All the necessary Companies House and HMRC submissions as well as FreeAgent Bookkeeping software included. ### £49 + VAT per month Interested? Let’s start today [Speak with our team](/contact/) or [Sign up now](/sg-accounting-signup-form/) ### What’s included? | Core Accounting | |:--| | FreeAgent software | | | Set-up or Switch Service | | | Sole Trader Accounts | | | One Self Assessment Tax Return | | | References | | | Service and Benefits | |:--| | FCSA accreditation | | | £100 reward for every new client you refer | | | Free financial reviews and wealth management advice | | | Preferential rates for small business, personal, crypto and buy to let accounting and tax | | | Video Calls | | | Fee Protection Cover **Free for 3 months** Then £10 + VAT per month | | Additional Services (optional) | |:--| | Payroll for an additional employee | **£10** + VAT per month | | 2nd Self Assessment Tax Return | **From £18** + VAT per month | | Monthly Management Accounts | **£40** + VAT per month | | Bookkeeping | **£40** + VAT per month | | VAT submissions | **£15** + VAT per month | | Making Tax Digital submissions | **£95** + VAT for set-up (one-off) **£25** + VAT per month for quarterly submissions | ### Sole Trader Accounting £49 + VAT per month Interested? Let’s start today [Speak with our team](/contact/) or [Sign up now](/sg-accounting-signup-form/) - [#### Umbrella Company Payroll Service](#tab-54d1bb2b59bc69ff501) ## Umbrella Company Payroll Service Everything you need is included: FCSA-accredited payroll with a named Umbrella Manager, IR35 advice, fast payments and a fixed margin. No minimum contract. Interested? Let’s start today [Speak with our team](/contact/) or [Find out more about SG Umbrella](https://sg-umbrella.co.uk/) ### What’s included? | What's included | |:--| | Fully compliant – FCSA accredited | | | Expert service – direct line to named Umbrella Manager | | | IR35 and tax advice | | | Super fast and accurate payments | | | Full employment rights | | | Salary sacrifice into your preferred pension | | | Fixed margin, no minimum contract | | | Benefits package | | ### Umbrella Company Payroll Service Visit the website to learn more Interested? Let’s start today [Speak with our team](/contact/) or [Find out more about SG Umbrella](https://sg-umbrella.co.uk/) ### Don’t see what you need? We offer a full range of Accounting Services and are very happy to create a bespoke quote based on your individual needs. Just give us a call and see how we can help. [Enquire now](/contact/) # Need insurance? When you sign up with SG Accounting, you’ll get preferential rates with a choice of insurance partners offering contractor-specific and general packages. This could be Professional Indemnity, Public Liability, Employers Liability, cyber cover or even general office insurance. ![Two coworkers shake hands in a modern office, both smiling.](https://sg-accounting.co.uk/wp-content/uploads/2026/08/male-office-worker-shaking-hands-with-a-client.webp "male-office-worker-shaking-hands-with-a-client | SG Accounting") ## We’re accredited and trusted ![FreeAgent Expert](https://sg-accounting.co.uk/wp-content/uploads/2018/01/freeagent-small.png "FreeAgent Expert | SG Accounting") ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less - Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less - Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less - Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less - internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less vishal jajodia 3/12/2020 I am new to contracting and started with SG. Everything went smoothly from setting up company to getting VAT registered and raising my first invoice. They are professional, prompt and efficient. read moreread less Ben Folwell 3/12/2020 Great hardworking team at SG. I've been contracting for the last couple of years and SG have helped brilliantly with not just the day to day running of the company but also the advice and help to set the company up initially. I would happily recommend SG to any colleagues requiring accounting services. Their fixed price model is very handy for controlling accounting costs. Rich Murray has been great with any queries I have and is always on hand to offer advice and support when I need it. Face to face meetings conducted in the pub always go down well. Rich however, never forgets when it's my round! read moreread less - Little Letty 3/12/2020 I have been really happy with SG. They were recommended by a friend, and have been excellent. They always respond to questions quickly and are all really helpful and friendly. read moreread less Andrew Faiers 3/12/2020 I have been using SG Accountants for over 2 years and from the first introductory meeting with Dan the service has been excellent. I have been really impressed with the professional, helpful and friendly approach made by all members of the team. All questions and queries have always been dealt with promptly, often on the same day which highlights their positive approach to clients. I will not be looking elsewhere! read moreread less Leon Mediavilla 3/12/2020 An excellent firm with a comprehensive advisory service, whose are always on hand to promptly answer my questions. I needed clarification in many areas when I first started contracting, but Nadeem at SG made it easy and provided advice about all my issues. I would highly recommend their services to any contractor currently looking for an accountancy firm. read moreread less Sara Hearne 3/12/2020 I couldn’t recommend SG Accounting Winchester enough. There is no question about their professionalism, knowledge and friendly service. Since joining SG Accounting I can confidently say that I am now in tune with my business accounts and have benefited from the proactive (rather reactive) advice and service which they provide. It’s reassuring to know that the SG team are always on hand and happy to help with any accounting enquiry big or small. Having peace of mind on your business accounts is priceless... thank you SG Accounting! read moreread less - Keith Humphreys 3/12/2020 Found these guys on the internet after I'd heard some bad press about SJD. I first dealt with Dan Mepham who took me through the on-boarding process and from there on the service has always been top class. Everything I've asked them to do, they've done, from switching VAT schemes to migrating onto Freeagent. Highly recommended!!! read moreread less Steve Mcfarlane 3/12/2020 SG have been efficient, proactive and responsive in the 2 years that I have used them as my company accountancy service. My questions are always answered in a timely manner and the team I deal with are always courteous and professional in their communications. read moreread less Riccardo Reato 3/12/2020 Just started 2 months ago my work relationship with SG accounting. The setup of my business has been very quick and smooth, communication has been great, and SG professionals are very knowledgeable and helpful! Really happy of my choice, and would recommend SG to anyone looking for a reliable accountancy partner. read moreread less Nanda Kumar 3/12/2020 Good and professional accounting services. They are always prompt in responding to our queries. Using them for 8 years and always awesome. read moreread less - Cubby Fox 3/12/2020 Great service from the team at SG. Personal, responsive, can explain things to someone with zero accounting knowledge! I especially like dealing with Lee - he has answered so many of my last minute questions. Highly recommend. read moreread less Ksenia Belova 3/12/2020 I regularly recommend SG Contractor Accounting to my friends and colleagues, as I am continuously impressed with their service standard. My initial contact and in-person meeting with Dan set the scene for an efficient and supportive working relationship. The team is extremely responsive, professional, helpful and proactive. They have never failed to provide a prompt response to many of my ad hoc queries, and in addition are always proactive when time comes to returns or any other deadlines. The ability to use accounting software as part of some of the packages is extremely helpful as it links in with SG's own systems and means information flow is streamlined. I think the services is fantastic and great value for money and I have no desire to go anywhere else. Thanks SG Team! read moreread less Guy Hanson 3/12/2020 The team at SG are very helpful and knowledgeable. From the outset, they have covered all of my company financial requirements and have assisted with personal tax too. SG was recommended to me and I can do the same. read moreread less Nnamdi Ezulike 3/12/2020 Great experience dealing with SG Accounting, made everything very easy and idiot proof for somebody who has never been a contractor. Resolved any queries and issues swiftly, with a minimum amount of fuss. Highly recommend SG Accounting read moreread less ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - X/Twitter This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Frances Bridge](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/frances-bridge/) **Published:** April 22, 2026 **Author:** Finley Turner **Content:** [Back to the team](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/) # Frances Bridge \| *Client director* ## Part ACCA Qualified \| Joined SG in 02/2024 ![Frances Bridge](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Frances-Bridge.png "Frances Bridge | SG Accounting") [![Connect on Linkedin button](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Connect-on-Linkedin-button.png "Connect on Linkedin button | SG Accounting")](https://www.linkedin.com/in/frances-bridge-b5654ba/) Since becoming an accountant in 2012, Frances particularly enjoys building relationships with her clients, and helping them make the most from their finances. By getting to know her clients she’s able to provide them with tailored tax and accounting advice, and find solutions to any problems they’re experiencing. In her spare time she enjoys travelling the world and spending time with her son George. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Frances’ Videos ## Frances’ Blogs 2608, 2026 - [ ![Business owner reviewing VAT scheme options — Standard VAT, Cash Accounting, Flat Rate Scheme and Annual Accounting — to improve cash flow and tax efficiency.](https://sg-accounting.co.uk/wp-content/uploads/2026/07/f4d2775f-de65-6a68-7a30-ba6728aaa356-320x202.jpg "VAT Scheme Options for Small Businesses | SG Accounting") ](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) ### [VAT Schemes: Which one is right for your business?](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) By [Frances Bridge](https://sg-accounting.co.uk/blog/author/frances-bridge/)\|2026-09-23T14:53:06+01:00August 26th, 2026\|[limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Salary/dividends](https://sg-accounting.co.uk/blog/category/salary-dividends/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| It’s important to ensure your business is using the correct VAT scheme, as it directly affects your cash flow, admin workload, and overall tax efficiency. So, whether you’re approaching the VAT limit or you’re already registered, it’s important to fully understand your options so as to help make \[...\] [Read More](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) 2105, 2026 - [ ![Limited company director income structure showing salary and dividend payments, UK payroll, tax efficiency, and HMRC rules for how directors take income from a limited company.](https://sg-accounting.co.uk/wp-content/uploads/2026/05/78d3d029-1c36-b1a2-e6b3-6b14b6b60f3f-320x202.jpg "Salary and Dividends for Limited Company Directors UK Explained | SG Accounting") ](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) ### [How do dividends and salary work for Limited Company directors?](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) By [Frances Bridge](https://sg-accounting.co.uk/blog/author/frances-bridge/)\|2026-08-25T15:54:15+01:00May 21st, 2026\|[Expenses](https://sg-accounting.co.uk/blog/category/expenses/), [limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/), [News](https://sg-accounting.co.uk/blog/category/news/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Salary/dividends](https://sg-accounting.co.uk/blog/category/salary-dividends/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| When running a limited company, understanding how to pay yourself is key to working tax-efficiently and staying compliant with HMRC. Balancing salary and dividends correctly can help you optimise your take-home pay while ensuring your company meets all its legal obligations. This article explains how salary and dividends \[...\] [Read More](https://sg-accounting.co.uk/blog/how-do-dividends-and-salary-work-for-limited-company-directors/) 1811, 2025 - [ ![Business owner reviewing documents about Business Asset Disposal Relief (BADR) with a financial advisor in an office setting.](https://sg-accounting.co.uk/wp-content/uploads/2025/11/What-You-Need-to-Know-About-Business-Asset-Disposal-Relief-BADR-320x202.jpg "What You Need to Know About Business Asset Disposal Relief (BADR): A Complete Guide for Business Owners | SG Accounting") ](https://sg-accounting.co.uk/blog/what-you-need-to-know-about-business-asset-disposal-relief-badr/) ### [What You Need to Know About Business Asset Disposal Relief](https://sg-accounting.co.uk/blog/what-you-need-to-know-about-business-asset-disposal-relief-badr/) By [Frances Bridge](https://sg-accounting.co.uk/blog/author/frances-bridge/)\|2026-08-05T14:54:34+01:00November 18th, 2025\|[News](https://sg-accounting.co.uk/blog/category/news/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/)\| It’s essential to understand how Business Asset Disposal (BADR) works, if you’re considering or preparing to wind down your business. Known previously as Entrepreneurs’ Relief, it can reduce the amount of tax you pay on disposals of qualifying business assets significantly. This blog looks at what BADR does, \[...\] [Read More](https://sg-accounting.co.uk/blog/what-you-need-to-know-about-business-asset-disposal-relief-badr/) 1808, 2025 - [ ![Illustration of Limited Company pension contributions showing tax savings, growth over time, and retirement planning benefits.](https://sg-accounting.co.uk/wp-content/uploads/2025/08/pension-contributions-320x202.jpg "pension contributions | SG Accounting") ](https://sg-accounting.co.uk/blog/the-tax-benefits-of-making-pension-contributions-through-your-limited-company/) ### [The tax benefits of making pension contributions through your Limited Company](https://sg-accounting.co.uk/blog/the-tax-benefits-of-making-pension-contributions-through-your-limited-company/) By [Frances Bridge](https://sg-accounting.co.uk/blog/author/frances-bridge/)\|2026-08-27T11:10:08+01:00August 18th, 2025\|[New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/), [Pensions](https://sg-accounting.co.uk/blog/category/pensions/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/)\| If you’re busy running your own Limited Company, you’ll no doubt be on the lookout for ways in which you’re able to make smart, tax-efficient savings for your future. One of the most powerful ways of doing so is by making pension contributions directly from your company. Your \[...\] [Read More](https://sg-accounting.co.uk/blog/the-tax-benefits-of-making-pension-contributions-through-your-limited-company/) 2105, 2025 - [ ![Dormant Limited Companies](https://sg-accounting.co.uk/wp-content/uploads/2025/05/Dormant-Companies-320x202.jpg "Dormant Limited Companies: What Contractors and Freelancers Need to Know | SG Accounting") ](https://sg-accounting.co.uk/blog/dormant-companies-what-contractors-and-freelancers-with-a-uk-limited-company-need-to-know/) ### [Dormant Companies Explained for Limited Company Contractors](https://sg-accounting.co.uk/blog/dormant-companies-what-contractors-and-freelancers-with-a-uk-limited-company-need-to-know/) By [Frances Bridge](https://sg-accounting.co.uk/blog/author/frances-bridge/)\|2026-08-24T10:06:10+01:00May 21st, 2025\|[Expenses](https://sg-accounting.co.uk/blog/category/expenses/), [News](https://sg-accounting.co.uk/blog/category/news/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/)\| If you have a Limited Company you may find there are times when you’re not trading but you want to keep your company active, or you may decide to set a company up but not trade straight away. In both cases you’d put your company into a dormant \[...\] [Read More](https://sg-accounting.co.uk/blog/dormant-companies-what-contractors-and-freelancers-with-a-uk-limited-company-need-to-know/) 1302, 2024 - [ ![Frances Bridge](https://sg-accounting.co.uk/wp-content/uploads/2024/02/Frances-Blog-Banner-1-320x202.jpg "Frances Bridge | SG Accounting") ](https://sg-accounting.co.uk/blog/introducing-our-latest-sg-accountant-frances-bridge/) ### [Introducing our latest SG Accountant – Frances Bridge](https://sg-accounting.co.uk/blog/introducing-our-latest-sg-accountant-frances-bridge/) By [Jen Winslow](https://sg-accounting.co.uk/blog/author/jen/)\|2026-01-20T09:49:17+00:00February 13th, 2024\|[limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/)\| Here at SG Accounting, we have a fantastic accounting team, ranging from our apprentices right through to our Senior Client Directors and Head of SG. We consistently attract and hire the best local accounting talent and are proud of the team and the high levels of service they \[...\] [Read More](https://sg-accounting.co.uk/blog/introducing-our-latest-sg-accountant-frances-bridge/) --- ### [Dean Lacey](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/dean-lacey/) **Published:** April 22, 2026 **Author:** Finley Turner **Content:** [Back to the team](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/) # Dean Lacey \| *Client director* ## FCCA Qualified \| Joined SG in 12/2023 ![Dean Lacey](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Dean-Lacey.png "Dean Lacey | SG Accounting") [![Connect on Linkedin button](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Connect-on-Linkedin-button.png "Connect on Linkedin button | SG Accounting")](https://www.linkedin.com/in/dean-lacey-69665065) Specialising in contractor accounting since 2010, Dean particularly enjoys building client confidence in managing their own tax affairs, and building up their businesses. In his spare time he has a passion for completing the best escape rooms across the UK and Europe, and has completed over 100! [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Dean’s Videos ## Dean’s Blogs 2105, 2026 - [ ![Limited company director reviewing allowable business expenses in the UK, including office costs, travel, and professional expenses, highlighting HMRC tax-deductible rules for limited companies.](https://sg-accounting.co.uk/wp-content/uploads/2026/05/55549eae-e64f-4428-b55d-2cb07350ac47-320x202.jpg "Allowable Business Expenses for UK Limited Company Directors Explained | SG Accounting") ](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) ### [Allowable business expenses for Limited Company Directors: explained](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) By [Dean Lacey](https://sg-accounting.co.uk/blog/author/dean-lacey/)\|2026-09-28T16:51:56+01:00May 21st, 2026\|Categories: [Expenses](https://sg-accounting.co.uk/blog/category/expenses/), [limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/), [News](https://sg-accounting.co.uk/blog/category/news/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\|Tags: [Dean Lacey](https://sg-accounting.co.uk/blog/tag/dean-lacey/)\| Business expenses are costs a limited company can claim back from its income in order to reduce the company’s taxable profit and therefore lower the amount of corporation tax due. These expenses are only allowable if they are wholly, exclusively and necessary for business purposes. For many directors, \[...\] [Read More](https://sg-accounting.co.uk/blog/allowable-business-expenses-for-limited-company-directors-explained/) 1911, 2025 - [ ![What to Do If You Can’t Pay HMRC: Expert Guidance from SG Accounting](https://sg-accounting.co.uk/wp-content/uploads/2025/11/What-to-Do-If-You-Cant-Pay-HMRC-Expert-Guidance-from-SG-Accounting-320x202.jpg "What to Do If You Can’t Pay HMRC: Expert Advice and Payment Solutions from SG Accounting | SG Accounting") ](https://sg-accounting.co.uk/blog/what-to-do-if-you-cant-pay-hmrc-expert-guidance-from-sg-accounting/) ### [What to Do If You Can’t Pay HMRC: Expert Guidance from SG Accounting](https://sg-accounting.co.uk/blog/what-to-do-if-you-cant-pay-hmrc-expert-guidance-from-sg-accounting/) By [Dean Lacey](https://sg-accounting.co.uk/blog/author/dean-lacey/)\|2026-05-08T16:01:16+01:00November 19th, 2025\|Categories: [limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [News](https://sg-accounting.co.uk/blog/category/news/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\|Tags: [Dean Lacey](https://sg-accounting.co.uk/blog/tag/dean-lacey/)\| We know that from time-to-time everyone can experience uncertainty surrounding their finances, and that this time of year in the lead up to Christmas and tax return season can amplify those worries. If you’re struggling with balancing your business’ finances and are concerned where to turn for support \[...\] [Read More](https://sg-accounting.co.uk/blog/what-to-do-if-you-cant-pay-hmrc-expert-guidance-from-sg-accounting/) --- ### [Niamh Potter](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/niamh-potter/) **Published:** April 22, 2026 **Author:** Finley Turner **Content:** [Back to the team](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/) # Niamh Potter \| *Client director* ## AAT Level 3 Qualified \| Joined SG in 12/2018 ![Niamh Potter](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Niamh-Potter.png "Niamh Potter | SG Accounting") [![Connect on Linkedin button](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Connect-on-Linkedin-button.png "Connect on Linkedin button | SG Accounting")](https://www.linkedin.com/in/niamh-potter-483296395/) Niamh joined the team in December 2018, starting out with no prior accountancy experience and working her way up through the business over the years. She now supports clients in her role as Client Director at SG, alongside preparing year-end accounts. Niamh enjoys building strong relationships with clients and providing practical guidance to help them run their limited companies as efficiently as possible. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Niamh’s Videos ## Niamh’s Blogs 2608, 2026 - ### [Are pension contributions an allowable business expense for directors?](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) By [Niamh Potter](https://sg-accounting.co.uk/blog/author/niamh-potter/)\|2026-09-28T14:57:50+01:00August 26th, 2026\|[limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/), [Pensions](https://sg-accounting.co.uk/blog/category/pensions/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Salary/dividends](https://sg-accounting.co.uk/blog/category/salary-dividends/), [Tax](https://sg-accounting.co.uk/blog/category/tax/)\| Pension contributions are often one of the most tax-efficient expenses a limited company can pay on behalf of its directors. However, many business owners are unsure whether pension contributions qualify as an allowable business expense and how the tax relief works. The good news is that, in many cases, employer \[...\] [Read More](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) 2105, 2026 - [ ![Limited company employee benefits in the UK showing tax-free trivial benefits, small gifts, and employee rewards under HMRC rules for directors and staff.](https://sg-accounting.co.uk/wp-content/uploads/2026/05/shutterstock_2081368093-320x202.jpg "Trivial Benefits for Limited Companies UK: Tax-Free Employee Gifts and Rewards | SG Accounting") ](https://sg-accounting.co.uk/blog/trivial-benefits-for-limited-companies-tax-free-gifts-and-employee-rewards/) ### [Trivial Benefits for Limited Companies: Tax-free gifts and employee rewards](https://sg-accounting.co.uk/blog/trivial-benefits-for-limited-companies-tax-free-gifts-and-employee-rewards/) By [Niamh Potter](https://sg-accounting.co.uk/blog/author/niamh-potter/)\|2026-07-27T16:58:06+01:00May 21st, 2026\|[Expenses](https://sg-accounting.co.uk/blog/category/expenses/), [limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| If you’re a director of a Limited Company, there may be times when you want to give a gift to your employees, or yourself as a director, without creating a tax liability. Trivial Benefits are a simple, tax-efficient way to reward your team or directors, but there are strict rules you must follow. In this \[...\] [Read More](https://sg-accounting.co.uk/blog/trivial-benefits-for-limited-companies-tax-free-gifts-and-employee-rewards/) 1811, 2025 - [ ![How Associated Companies Affect Corporation Tax from Your Trading Company](https://sg-accounting.co.uk/wp-content/uploads/2025/11/How-Associated-Companies-Affect-Corporation-Tax-from-Your-Trading-Company-320x202.jpg "How Associated Companies Impact Corporation Tax for Trading Companies: Key Insights and Guidance | SG Accounting") ](https://sg-accounting.co.uk/blog/how-associated-companies-affect-corporation-tax-from-your-trading-company/) ### [How Associated Companies Affect Corporation Tax](https://sg-accounting.co.uk/blog/how-associated-companies-affect-corporation-tax-from-your-trading-company/) By [Niamh Potter](https://sg-accounting.co.uk/blog/author/niamh-potter/)\|2026-06-05T10:15:28+01:00November 18th, 2025\|[limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [News](https://sg-accounting.co.uk/blog/category/news/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| If you’re running multiple trading companies, it’s essential that you understand the concept of ‘associated companies’. HMRC uses the rules on associated companies to determine the small profits rate of Corporation Tax, so this means that the more companies you have, the lower the threshold will be before \[...\] [Read More](https://sg-accounting.co.uk/blog/how-associated-companies-affect-corporation-tax-from-your-trading-company/) --- ### [Alex Gould](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/alex-goulds/) **Published:** April 22, 2026 **Author:** Finley Turner **Content:** [Back to the team](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/) # Alex Gould \| *Client director* ## Part ACCA Qualified \| Joined SG in 10/2017 ![Alex Gould](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Alex-Gould.png "Alex Gould | SG Accounting") [![Connect on Linkedin button](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Connect-on-Linkedin-button.png "Connect on Linkedin button | SG Accounting")](https://www.linkedin.com/in/alexander-gould-416248b5/) Specialising in the complex needs of Limited Company contractors since joining SG, Alex enjoys overcoming the challenges his clients face on a daily basis, and aiding them in maximising their contractor take home pay. Prior to SG, Alex spent 18 months at Barclays in advocacy. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Alex’s Videos ## Alex’s Blogs 2608, 2026 - [ ![Director reviewing their Director’s Loan Account and company records, assessing loan withdrawals, repayments, and HMRC tax implications.](https://sg-accounting.co.uk/wp-content/uploads/2026/07/pexels-pabda-5277958-320x202.jpg "Director’s Loan Account – Guide for Limited Company Directors | SG Accounting") ](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) ### [Director’s loans explained: The complete guide for limited company directors](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) By [Alex Gould](https://sg-accounting.co.uk/blog/author/alex/)\|2026-08-28T14:55:09+01:00August 26th, 2026\|[limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Salary/dividends](https://sg-accounting.co.uk/blog/category/salary-dividends/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| Director’s Loans are still one of the most underused and misunderstood areas of running a limited company. Whether, as a limited company director you’re navigating unexpected personal expenses, managing your cash flow, or just trying to remain compliant, it’s essential to understand how Director’s Loans work. In this \[...\] [Read More](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) 2105, 2026 - [ ![](https://sg-accounting.co.uk/wp-content/uploads/2026/05/shutterstock_1021836478-320x202.jpg "CloseUpOfWomanUnlockingEntranceDoorWithAKey | SG Accounting") ](https://sg-accounting.co.uk/blog/dormant-limited-companies-in-the-uk-rules-tax-implications-and-how-to-stay-compliant/) ### [Dormant Limited Companies in the UK: Rules, tax implications and how to stay compliant](https://sg-accounting.co.uk/blog/dormant-limited-companies-in-the-uk-rules-tax-implications-and-how-to-stay-compliant/) By [Alex Gould](https://sg-accounting.co.uk/blog/author/alex/)\|2026-08-24T10:14:08+01:00May 21st, 2026\|[Expenses](https://sg-accounting.co.uk/blog/category/expenses/), [limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| If you’re running a Limited Company in the UK, there might be times when you decide to stop trading, but don’t want to close your business entirely. Whether you're taking a break, planning, or restructuring, making your company dormant can be a practical solution. But if you do \[...\] [Read More](https://sg-accounting.co.uk/blog/dormant-limited-companies-in-the-uk-rules-tax-implications-and-how-to-stay-compliant/) 1911, 2025 - [ ![How much can you claim for using your home as an office as a limited company director?](https://sg-accounting.co.uk/wp-content/uploads/2025/11/How-much-can-you-claim-for-using-your-home-as-an-office-as-a-limited-company-director-320x202.jpg "How Much Can Limited Company Directors Claim for Using Their Home as an Office? Complete Guide | SG Accounting") ](https://sg-accounting.co.uk/blog/how-much-can-you-claim-for-using-your-home-as-an-office-as-a-limited-company-director/) ### [How much can you claim for using your home as an office as a limited company director?](https://sg-accounting.co.uk/blog/how-much-can-you-claim-for-using-your-home-as-an-office-as-a-limited-company-director/) By [Alex Gould](https://sg-accounting.co.uk/blog/author/alex/)\|2026-06-16T11:37:34+01:00November 19th, 2025\|[Expenses](https://sg-accounting.co.uk/blog/category/expenses/), [limited company](https://sg-accounting.co.uk/blog/category/limited-company/), [News](https://sg-accounting.co.uk/blog/category/news/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| If you work from home you can usually expect to incur additional expenses, but did you know that you may be able to claim tax relief on those expenses if using part of your home as an office? In this blog we break down the options for the 2025/26 \[...\] [Read More](https://sg-accounting.co.uk/blog/how-much-can-you-claim-for-using-your-home-as-an-office-as-a-limited-company-director/) 1808, 2025 - [ ![Illustration showing different VAT schemes for businesses, including flat rate, standard, and cash accounting options, with examples of how they work](https://sg-accounting.co.uk/wp-content/uploads/2025/08/medium-vecteezy_hand-holding-wood-block-with-vat-text_3057345_medium-1-320x202.jpg "VAT Schemes | SG Accounting") ](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/) ### [VAT schemes – which one is right for you?](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/) By [Alex Gould](https://sg-accounting.co.uk/blog/author/alex/)\|2026-08-27T11:25:55+01:00August 18th, 2025\|[New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/), [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/), [Tax](https://sg-accounting.co.uk/blog/category/tax/), [VAT](https://sg-accounting.co.uk/blog/category/vat/)\| If your limited company is approaching the VAT registration threshold, or you are already VAT registered, ensuring you choose the correct VAT scheme for your business is more than just a compliance task. By having the correct scheme you can improve your cash flow, reduce admin, and even \[...\] [Read More](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-you/) --- ### [Guides](https://sg-accounting.co.uk/guides/) **Published:** February 3, 2020 **Author:** Dan Mepham **Content:** # Guides From IR35 to claiming expenses, to pensions and having all the information you’ll need with our definitive guide to contracting, our free guides are here to offer you advice and an insight into the world of Limited Company contracting. [](/guides/a-guide-to-buy-to-let/)### Your definitive guide to **buy-to-let** Investing in buy-to-let properties in the UK can be a lucrative venture, but it’s essential to understand the tax implications to maximise your returns and ensure compliance with HMRC regulations. This guide covers the key tax considerations for buy-to-let investors in the UK. [](/guides/a-guide-to-contracting/)### Your definitive guide to **contracting** Thinking about setting yourself up as a contractor but not sure how or need to know more first? SG Accounting has created a free guide just for you that goes over all the tools, processes and benefits of contracting. [](/guides/your-ir35-survival-guide/)### Your guide to **surviving IR35** Concerned about IR35? Need advice? Confused and want the full picture? With our free IR35 survival guide we explain how contractors can fully understand IR35 and how you’re affected. [](https://sg-accounting.co.uk/blog/what-insurance-do-i-need-as-a-limited-company-contractor/)### Your guide to **contractor insurance** As a Limited Company contractor having the correct insurance in place is an essential must have in order to contract confidently and safely. Our guide covers everything you need to know. [](/guides/on-shore-agency-reporting-requirements/)### Your guide to **on shore agency reporting requirements** From 6 April 2015, HMRC will require all employment intermediaries and agencies to provide a quarterly report detailing their contractor’s information. [](/guides/conduct-of-employment-agencies-regulations/)### Your guide to **conduct of Employment Agencies regulations** Conduct of Employment Agencies regulations were introduced in 2004 to provide a framework for the minimum standards contractors should expect. [](/guides/what-is-ir35/)### Your guide to **what is IR35?** IR35 (also known as Intermediaries Legislation) is tax legislation in place to tax workers, trading through an intermediary, such as a Limited Company. [](/guides/pension-auto-enrolment/)### Your guide to **pension auto enrolment** Workplace pensions have changed and employers with at least one employee now need to be aware of their duties under the Auto Enrolment regulations. [](/guides/how-much-can-i-claim-for-using-my-home-as-an-office/)### Your guide to **how much you can claim for using your home as an office** Many contractors don’t have a separate office and instead will use their home as an office either using a garden office or a separate room in the house. [](/guides/cycle-to-work-scheme/)### Your guide to **the cycle to work scheme** Employers can loan out bicycles and cyclists’ safety equipment to employees with tax-free benefits, such as benefits in kind. Call us for more information. ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - X/Twitter This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Contractor Accounting Contractor UK](https://sg-accounting.co.uk/contractor-accounting-contractoruk-partner/) **Published:** July 17, 2024 **Author:** Jen Winslow **Content:** # **Specialist** Contractor Accounting Here at SG we specialise in the complex and unique needs of contractors. Join us and get a personal service delivered by a genuinely independent contractor accounting specialist with your best interests at heart. ![£59.50 per month plus FREE accounts catch-up](https://sg-accounting.co.uk/wp-content/uploads/2025/05/offer-price-banner-halfprice-2025c.png "offer-price-banner-halfprice-2025c | SG Accounting") ![](https://sg-accounting.co.uk/wp-content/uploads/2024/07/contractorUK-partner-logo-scaled.jpg "contractorUK-partner-logo | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![FreeAgent](https://sg-accounting.co.uk/wp-content/uploads/2021/09/freeagent-logo.png "FreeAgent | SG Accounting") ![The Contracting Awards - Best Contractor Accountancy (1,000 - 2,500) Finalist](https://sg-accounting.co.uk/wp-content/uploads/2024/09/Transparent-Best-Contractor-Accountancy-1000-2500.png "Transparent Best Contractor Accountancy (1,000 – 2,500) | SG Accounting") ## Why SG Accounting? Contractor’s needs are more complex than those of standard Limited Company’s, and you want to be dealing with an accountant that understands your industry, speaks your language, and knows what you’re up against when it comes to confusing tax legislation that could affect your take home pay. That’s where we come in! Founded in 1995, contractors have been our specialty, and every one of our accountants is fully trained in the challenges you’ll face when running your Limited Company. Sounds good? Get in touch to find out more. ## **Switching** accountant? - Quick and easy switching service – we catch up your current year’s accounts for free too! - Tax efficiency review and IR35 advice - Direct line to your personal contractor accountant - FreeAgent software included [Find out more](/limited-company-accountants-for-contractors/#switching-accountants) ## Just starting out? - Help with full company set-up - Advice on and preparation of all required Companies House and HMRC filings for approval - Advice on all taxes - FreeAgent software included [Find out more](/limited-company-accountants-for-contractors/#starting-out) ![First 3 months half price](https://sg-accounting.co.uk/wp-content/uploads/2023/09/3-months-half-price-banner.png "| SG Accounting") ## Clear pricing, great value service £119 **£59.50** per month +VAT ### Limited Company Accounting £59.50 +VAT per month for the first 3 months, then £119 per month +VAT [Find out more about SG Limited Company Contractor Accounting](/prices/) £39 **£19.50** per month +VAT ### Accounting for Sole Traders, Partnerships or the Self Employed £19.50 +VAT per month for the first 3 months, then £39 per month +VAT [Find out more about SG Sole Traders, partnerships or the Self Employed](/prices/) **£12** per week +VAT ### Umbrella Company payroll service From £12 per week for the first 4 weeks, then £18 per week [Find out more about SG Umbrella](https://sg-umbrella.co.uk/) ## Our contractor’s knowledge hub - [ ![Business owner taking dividends from his limited company](https://sg-accounting.co.uk/wp-content/uploads/2024/03/Dividends-for-limited-companies-scaled.jpg "Dividends for limited companies | SG Accounting") ](https://sg-accounting.co.uk/blog/a-complete-guide-to-dividends-for-limited-companies/) ### How do dividends for Limited Company owners work? Published On: March 25th, 2024 When running your Limited Company, it's important to understand how dividends work in order to maximise your take-home pay and become more tax efficient. Whilst consulting your specialist accountant is recommended for \[...\] - [ ![Various cryptocurrencies](https://sg-accounting.co.uk/wp-content/uploads/2023/11/tax-on-cryptocurrency-1-scaled.jpg "tax on cryptocurrency | SG Accounting") ](https://sg-accounting.co.uk/blog/do-you-owe-tax-on-cryptocurrency-in-the-uk/) ### Do you owe tax on cryptocurrency in the UK? Published On: November 23rd, 2023 If you have, or have previously had any dealings with cryptoassets the chances are there will be a tax liability for you. There’s been some confusion in the past around the tax \[...\] [![custom logoSG Accounting](https://sg-accounting.co.uk/wp-content/plugins/wp-review-slider-pro-premium/public/partials/imgs/google_small_icon.svg)](https://www.google.com/search?q=SG+Contractor+Accounting+Winchester+UK&ludocid=6145753469151450892#lrd=0x48740d8b3a75ace5:0x554a1a37f5e5970c,1)SG Accounting 4.6 Stars - Based on 110 User Reviews ## See what other contractors think of our service - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less - Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less - Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less - Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less - Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less John Hall 3/12/2020 Setting up my new venture was made so much easier by SG. From initial advice, through setting up the limited company, to getting my accounting package prepared and bank account set up. Now that I have been up an running for a while they have been a great support with the day to day issues, so that I can get on with MY business read moreread less andydmead 3/12/2020 I've recently signed up with SG Accounting and have to say their on-boarding, their explanation of what is required and how and when things need to happen has been superb. They have ensured we have had both a telcon and met face to face and I feel confident I am in very safe hands. read moreread less - Riccardo Reato 3/12/2020 Just started 2 months ago my work relationship with SG accounting. The setup of my business has been very quick and smooth, communication has been great, and SG professionals are very knowledgeable and helpful! Really happy of my choice, and would recommend SG to anyone looking for a reliable accountancy partner. read moreread less Nadine Appiah 3/12/2020 I have recently joined the contracting world and was referred by a colleague to SG Accounting. My experience to date has been effortless. From the very introductory phone call to the team in Hampshire and meeting Laura (my personal accountant) in London. All my worries were taken care off. SG took control of the full set up and promptly responded all emails. I will most definitely refer SG to any contractor looking for a 1st class front to back service. I cannot thank you enough. read moreread less Labinot Z 3/12/2020 SG Accounting have been great at helping me setup and have managed my books continuously for me. Nadeem is my head accountant and hes been very thorough and transparent with me. Great Company. read moreread less Adrian 3/12/2020 To get started, I was offered a face to face introductory meeting with Laura, my Account Manager, but as I was very busy I couldn't fit this into my diary so we did this by phone instead. Laura helpfully answered the questions I had about how I should operate tax efficiently and some other queries I had. Since then, all I've had to do is keep track of my invoices and bank account entries in Free Agent and SG take care of everything from there. Any further questions I have had have been answered very quickly. It all couldn't be easier and I can highly recommend SG. read moreread less - Ben Folwell 3/12/2020 Great hardworking team at SG. I've been contracting for the last couple of years and SG have helped brilliantly with not just the day to day running of the company but also the advice and help to set the company up initially. I would happily recommend SG to any colleagues requiring accounting services. Their fixed price model is very handy for controlling accounting costs. Rich Murray has been great with any queries I have and is always on hand to offer advice and support when I need it. Face to face meetings conducted in the pub always go down well. Rich however, never forgets when it's my round! read moreread less Sara Hearne 3/12/2020 I couldn’t recommend SG Accounting Winchester enough. There is no question about their professionalism, knowledge and friendly service. Since joining SG Accounting I can confidently say that I am now in tune with my business accounts and have benefited from the proactive (rather reactive) advice and service which they provide. It’s reassuring to know that the SG team are always on hand and happy to help with any accounting enquiry big or small. Having peace of mind on your business accounts is priceless... thank you SG Accounting! read moreread less Mark Piper 3/12/2020 I’m new to contracting and doing my own financials was a bit daunting, but Laura and the team at SG have made it really simple. Easy process and always very prompt to answer any questions. read moreread less Nanda Kumar 3/12/2020 Good and professional accounting services. They are always prompt in responding to our queries. Using them for 8 years and always awesome. read moreread less - Andy Rose 3/12/2020 Couldn't recommend this team more. I'm a total moron when it comes to all this tax/company admin stuff, and I ask them hundreds of dumb questions quite frequently. Not only do they always go above and beyond in explaining everything to me, they also do it in a good mood. As much as is possible they do all the heavy lifting and they just tell me what I need to do in terms of transferring the right amounts from the right bank accounts. Very little is required from me, which is exactly what I want. Total pros. read moreread less Guy Hanson 3/12/2020 The team at SG are very helpful and knowledgeable. From the outset, they have covered all of my company financial requirements and have assisted with personal tax too. SG was recommended to me and I can do the same. read moreread less Andy Tuthill 3/12/2020 SG have been my accountant for over 20 years. I have seen them grow and develop into the amazing service they provide today. They still retain their personal service, and have always gone above and beyond to offer any additional assistance I needed. I have recommended SG to many colleagues and will continue to do so. read moreread less Nnamdi Ezulike 3/12/2020 Great experience dealing with SG Accounting, made everything very easy and idiot proof for somebody who has never been a contractor. Resolved any queries and issues swiftly, with a minimum amount of fuss. Highly recommend SG Accounting read moreread less Call us now on [01962 896968](tel:01962896968) [Enquire Now](#enquiryForm) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - X/Twitter This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Contact us](https://sg-accounting.co.uk/contact/) **Published:** February 3, 2020 **Author:** Dan Mepham **Content:** ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Email This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Privacy Policy](https://sg-accounting.co.uk/privacy-policy/) **Published:** September 4, 2015 **Author:** Dan Mepham **Content:** # # **Privacy Policy** At SG Accounting (The Affinity Group), we’re committed to protecting and respecting your privacy. Your privacy is extremely important to us so we only use the information you provide about yourself and your company to answer your enquiry or to help us to improve our service to you. We do not share this information with any third party except to the extent necessary to answer your enquiry if that enquiry requires the involvement of a third party. We use return email addresses to answer the email we receive. Such addresses are not shared with outside parties. This Policy explains why we collect personal information, how we use it, the conditions under which we may disclose it to others and how we keep it secure. We may change this Policy from time to time. By using our services, you’re agreeing to be bound by this Policy. Any questions regarding this Policy and our privacy practices should be sent by email to <enquiries@sg-accounting.co.uk> or by writing to SG Accounting, 1 Cedar Office Park, Cobham Road, Wimborne BH21 7SB. Alternatively, you can telephone 01962 867550. **Who are we?** SG Accounting was established in 1995 to service the accountancy and taxation needs of small businesses. We are based in Winchester and Ringwood as well as spending much of our time travelling to meet our clients around the country. Over more than 20 years we have dealt with thousands of clients, and are proud to say 95% of our new clients come from recommendation. Our directors have a combined experience of more than 60 years in accountancy and taxation. We pride ourselves on the personal service we provide and we value the relationships we build with our clients. **How do we collect information from you?** We obtain information about you when you contact us, for example, when you enquire about products and services, or provide us with what we need to provide you with regular accounting and taxation services and advice. Calls may be recorded for training and quality purposes. We do not share call recordings with any third parties. **What type of information is collected from you?** SG Accounting will only capture the minimum personal data required to fulfil our contractual obligations and meet UK government legal requirements. We will securely store all personal data (hard copies and electronic copies) even if you no longer have a valid contract for us to provide services. This is to meet UK government legal obligations. **Who has access to your information?** Only SG Accounting employees who need access to your personal data to perform their duties in providing the contracted services will have access to the data. We will not sell or rent your information to third parties. We will not share your personal information with third parties for marketing purposes. **Third Party Service Providers working on our behalf:** We may pass your information to our third party service providers, agents subcontractors and other associated organisations for the purposes of completing tasks and providing services to you on our behalf (for example when opening a bank account or providing insurance cover). However, when we use third party service providers, we disclose only the personal information that is necessary to deliver the service and we have a contract in place that requires them to keep your information secure and not to use it for their own direct marketing purposes. Please be reassured that we will not release your information to third parties beyond SG Accounting for them to use for their own direct marketing purposes, unless you have requested us to do so, or we are required to do so by law, for example, by a court order or for the purposes of prevention of fraud or other crime. **Third Party Product Providers we work in association with:** We work closely with various third party providers to facilitate the running of your business (e.g. MetroBank, APS, Abbey, Hiscox, IFAs). If you choose to use the facilities offered the respective third party will use your details to provide you with information and carry out their obligations arising from any contracts you have entered into with them. In some cases, they will be acting as a data controller of your information and therefore we advise you to read their Privacy Policy. These third party product providers will share your information with us which we will use in accordance with this Privacy Policy. We may transfer your personal information to a third party if we’re under a duty to disclose or share your personal data in order to comply with any legal obligation or to enforce or apply our terms and conditions. However, we will take steps with the aim of ensuring that your privacy rights continue to be protected. SG Accounting may contact you via email to invite you to review any services and/or products you received from us in order to collect your feedback and improve our services (the “Purpose”). We use an external company, Trustpilot A/S (“Trustpilot”), to collect your feedback which means that we will share your name, email address and reference number with Trustpilot for the Purpose. [If you want to read more about how Trustpilot process your data, you can find their Privacy Policy here.](https://corporate.trustpilot.com/legal/for-reviewers/privacy-policy-end-user/mar-2026) **How we use your information** We use your information so that we can provide accountancy and taxation services. If you are a client, as we review your information in the preparation of your accounts and tax returns we may contact you regarding services and offers which we think might be beneficial to you in the running of your business, or in respect of your personal tax affairs. If you have contacted us expressing an interest in our services we may from time to time contact you with newsletters, guides and information about our services which we think you would be interested in. If at any point you no longer wish to receive communications from us email [enquiries@sg-accounting.co.uk](mailto:admin@sg-accounting.co.uk). **How you can access and update your information** The accuracy of your information is important to us. We’re working on ways to make it easier for you to review and correct the information that we hold about you. In the meantime, if you change email address, or any of the other information we hold is inaccurate or out of date, please email us at: <enquiries@sg-accounting.co.uk>, or write to us at: SG Accounting, 1 Cedar Office Park, Cobham Road, Wimborne BH21 7SB. Alternatively, you can telephone 01962 867550. You have the right to ask for a copy of the information SG Accounting holds about you (we may charge £10 for information requests) to cover our costs in providing you with details of the information we hold about you. Security precautions in place to protect the loss, misuse or alteration of your information Non-sensitive details (your email address etc.) are transmitted normally over the Internet, and this can never be guaranteed to be 100% secure. As a result, while we strive to protect your personal information, we cannot guarantee the security of any information you transmit to us, and you do so at your own risk. Once we receive your information, we make our best effort to ensure its security on our systems. **Links to other websites** Our website may contain links to other websites run by other organisations. This privacy policy applies only to our website‚ so we encourage you to read the privacy statements on the other websites you visit. We cannot be responsible for the privacy policies and practices of other sites even if you access them using links from our website. In addition, if you linked to our website from a third party site, we cannot be responsible for the privacy policies and practices of the owners and operators of that third party site and recommend that you check the policy of that third party site. **Transferring your information outside of Europe** As part of the services offered to you through this website, the information which you provide to us may be transferred to countries outside the European Union (“EU”). Our servers are based in the UK but third-party servers may from time to time be located in a country outside of the EU. These countries may not have similar data protection laws to the UK. By submitting your personal data, you’re agreeing to this transfer, storing or processing. If your information is transmitted outside of the EU in this way, we will take steps to ensure that appropriate security measures are taken with the aim of ensuring that your privacy rights continue to be protected as outlined in this Policy. If you use our services while you are outside the EU, your information may be transferred outside the EU in order to provide you with those services. **Review of this Policy** We keep this Policy under regular review. This Policy was last updated in May 2025. --- ### [Cookie Policy](https://sg-accounting.co.uk/cookie-policy/) **Published:** September 4, 2015 **Author:** Dan Mepham **Content:** # # Cookie Policy This document was created using a Contractology template available at [http://www.freenetlaw.com](http://www.freenetlaw.com/). **About cookies** This website uses cookies. By using this website and agreeing to this policy, you consent to SG Accounting’s use of cookies in accordance with the terms of this policy. Cookies are files sent by web servers to web browsers, and stored by the web browsers. The information is then sent back to the server each time the browser requests a page from the server. This enables a web server to identify and track web browsers. There are two main kinds of cookies: session cookies and persistent cookies. Session cookies are deleted from your computer when you close your browser, whereas persistent cookies remain stored on your computer until deleted, or until they reach their expiry date. **Cookies on our website** SG Accounting uses the following cookies on this website, for the following purposes: - Google Analytics for website analyis **Google cookies** SG Accounting uses Google Analytics to analyse the use of this website. Google Analytics generates statistical and other information about website use by means of cookies, which are stored on users’ computers. The information generated relating to our website is used to create reports about the use of the website. Google will store and use this information. Google’s privacy policy is available at [http://www.google.com/privacypolicy.html](https://policies.google.com/privacy). **Refusing cookies** Most browsers allow you to refuse to accept cookies. In Internet Explorer, you can refuse all cookies by clicking “Tools”, “Internet Options”, “Privacy”, and selecting “Block all cookies” using the sliding selector. In Firefox, you can adjust your cookies settings by clicking “Tools”, “Options” and “Privacy”. Blocking cookies will have a negative impact upon the usability of some websites. --- ### [Business Insurance](https://sg-accounting.co.uk/business-insurance/) **Published:** March 26, 2019 **Author:** Dan Mepham **Content:** # BUSINESS Insurances explained Any business or agency retaining the services of a another business will likely require that business to be covered by insurance. Read on to find out more about the types of insurances your business might need. [![Click here to use our bespoke Qdos link and get a discount](https://sg-accounting.co.uk/wp-content/uploads/2024/01/qdos-button.png "| SG Accounting")](https://my.goqdos.com/) [![Click here to use our bespoke Kingsbridge link and get a discount](https://sg-accounting.co.uk/wp-content/uploads/2024/01/kingsbridge-button.png "| SG Accounting")](https://insure.kingsbridge.co.uk/Public/QuickQuoteQuestions?PackageId=27974&pageNumber=1&Partner=P-03239&utm_source=accountant&utm_medium=referral&utm_campaign=partner) [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Why do businesses need insurance? ### To get the business If you’re contracting, most clients will not sign a contract with a contractor unless they are insured – having the appropriate insurance cover in place is now seen as essential by most agencies and end clients. And as a small businesses, that will be the case if you’re providing your services to a larger company too. ### For peace of mind Insurance can be for the benefit of the business or for its employees and directors. For example, critical illness cover and life insurance can offer some security to these individuals. ### To cover mistakes If a mistake is made during a job and it costs the end client financially, they could claim against the company. This could be because of a technical error, advice that didn’t turn out to be the best, or an accident resulting in damage. ### In case of HMRC investigation All businesses are at risk of tax investigations, usually with nothing to worry about. However, with rules around IR35 changing and being confused over the years, many contractors worry about having past contracts investigated and being retrospectively found ‘inside’ IR35. ## What type of insurance do businesses need? There are a various types of insurance cover that protect against different things. It’s generally agreed that the following are the best for small businesses and contractors but your insurance provider can offer more specific advice. ### Professional Indemnity Professional indemnity insurance can help protect a business if a client claims there’s a problem with the work that’s been done. It can cover the costs of compensation to correct a mistake or settle a claim, and covers the cost of the legal defence. Professional indemnity insurance can provide invaluable cover to businesses providing professional advice or services to clients which could be challenged. ### Public Liability Covers a business if someone else is injured, or property is damaged as a result of its actions. Public liability insurance protects against the cost of any claims from third parties, such as compensation payouts and legal costs. ### Employer’s Liability Covers a business against claims from employees. All employers are required by law to have this in place at a minimum level of cover of £5,000,000. ### Fee Protection Cover Fee Protection Cover protects a company from additional costs incurred on professional fees in dealing with an HMRC enquiry (including IR35 enquiries). ## Preferential Insurance Rates When you sign up with SG Accounting, you’ll get preferential rates with a choice of insurance partners offering contractor-specific and general packages. This could be Professional Indemnity, Public Liability, Employers Liability, cyber cover or even general office insurance. And all new clients get their first 3 months of Fee Protection Cover for free. Use our bespoke links for a 10% discount with: [![Click here to use our bespoke Qdos link and receive a discount.](https://sg-accounting.co.uk/wp-content/uploads/2023/11/Qdos-click-here-button.png "Qdos click here button | SG Accounting")](https://my.goqdos.com/) [![Click here to use our bespoke Kingsbridge link and receive a discount.](https://sg-accounting.co.uk/wp-content/uploads/2023/11/Kingsbridge-click-here-button.png "Kingsbridge click here button | SG Accounting")](https://insure.kingsbridge.co.uk/Public/QuickQuoteQuestions?PackageId=27974&pageNumber=1&Partner=P-03239&utm_source=accountant&utm_medium=referral&utm_campaign=partner) Use code SG10 for Qdos ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - X/Twitter This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Careers](https://sg-accounting.co.uk/about-sg-accounting/careers/) **Published:** February 3, 2020 **Author:** Janet Bower **Content:** ![The Affinity Group](https://sg-accounting.co.uk/wp-content/uploads/2022/10/affinity-swoosh-top.png "| SG Accounting") ## # Join us and make a difference every day ![illustration of a person holding a poster with thumbs up on it](https://sg-accounting.co.uk/wp-content/uploads/2022/10/affinity-great-working-environment.png "| SG Accounting") Great working environment ![illustration of a person holding a golden star](https://sg-accounting.co.uk/wp-content/uploads/2022/10/affinity-top-benefits.png "| SG Accounting") Top benefits package ![illustration of a person holding a watering pot with droplets of water coming out onto a plant pot](https://sg-accounting.co.uk/wp-content/uploads/2022/10/affinity-ambitious-growth.png "| SG Accounting") Ambitious growth plans SG Accounting is part of [The Affinity Group](https://www.the-affinity-group.co.uk/), a vibrant, diverse and growing group of professional service companies, who offer accounting and tax services to contractors, freelancers and SME’s. [Join us our values, people and career opportunities](https://www.the-affinity-group.co.uk/) Our sociable team has grown to 60+ people, spread across 3 offices in Hampshire and Dorset, with our main office in Ferndown. We offer a wealth of opportunity for ambitious individuals looking to be a part of a Company who support professional growth and believe in nurturing their people to help them achieve their maximum potential. ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") --- ### [Business Banking Solutions](https://sg-accounting.co.uk/business-banking-solutions/) **Published:** July 26, 2023 **Author:** Janet Bower **Content:** Business banking solutions made simple ![Zempler Bank Logo and tide logo](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Tide-and-Zempler-logos-1.png "Tide and Zempler logos | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Business bank accounts for small businesses and contractors ### Why do small businesses and contractors need a business bank account? When you set up a business it’s a really good idea to set up a business bank account, but what are you options, how do you go about doing it, and how do you know what’s right for you? This page explores all your options, and how SG Accounting can help. ### Business Banking FAQs Got business banking questions? We have the answers! [Take a look at our FAQs here](https://sg-accounting.co.uk/blog/business-bank-account-faqs/). ### Your banking options We have researched a number of banks for small businesses and have close working relationships with [Tide](https://www.tide.co/partners-business-account/?ref=SGACCOUNTING) and [Zempler](https://www.zemplerbank.com/landing/business/go/generic/) in order to make the application process easier…they are all fee-free and really easy to get set up. We’re also more than happy working with other banks, so if you’re already using a different bank, simply let us know. Many of our clients have more than one account, so speak to our team about how this can benefit you. ### Integrate your bank account with FreeAgent or other software Worried about how banks will integrate with FreeAgent or other software? Fear not! With seamless connections that are updated in realtime to synchronise your business payments, you’ll always know where your money is. ![Credit cards from business banks](https://sg-accounting.co.uk/wp-content/uploads/2023/07/business-banking-cards2.jpg "| SG Accounting") ### Want to chat through your business banking options? Give us a call on 01962 867550, or get in touch. We’d love to discuss how we can help with your banking needs. ## **Free business banking – easy sign-up links** [![Click here to sign up with tide.](https://sg-accounting.co.uk/wp-content/uploads/2023/11/tide.png "tide | SG Accounting")](https://www.tide.co/partners-business-account/?ref=SGACCOUNTING) [![Business bank, Zempler logo](https://sg-accounting.co.uk/wp-content/uploads/2024/08/Zempler-logo-300x300.png "Zempler Bank Logo | SG Accounting")](https://www.zemplerbank.com/landing/business/go/generic/?PC=BAS047) --- ### [Meet the Team](https://sg-accounting.co.uk/about-sg-accounting/meet-the-team/) **Published:** September 17, 2015 **Author:** Dan Mepham **Content:** ![Meet the SG Team!](https://sg-accounting.co.uk/wp-content/uploads/2024/04/SG-Standard-web-border-scaled.jpg "Meet the SG Team! | SG Accounting") # Meet the team We’re a crack team of accounting experts with masses of experience, ready and waiting to help you with all your accounting needs. Each of our clients has an allocated Client Director, support by teams of Accounts and Tax professionals. Looking after contractors since 1995, we’ve seen it all, so we’re confident that we can advise, support and help you plan for any eventuality. We have offices in Bournemouth, Southampton, Winchester and London, but serve contracting clients all over the country over the phone, Zoom and email. So whether you’re an IT contractor in London, a plumber in Bournemouth or an Oil and Gas professional in Aberdeen, give us a call today. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) Client Directors Top Divider ![Niamh Potter](https://sg-accounting.co.uk/wp-content/uploads/2026/01/Niamh-Potter-SG-Accounting.png) Client Director Niamh Potter ![Dean Lacey](https://sg-accounting.co.uk/wp-content/uploads/2024/02/Dean-SG-Meet-the-Team.png) Client Director Dean Lacey ![Alex Gould](https://sg-accounting.co.uk/wp-content/uploads/2022/07/alex-gould.png) Client Director Alex Gould ![Frances Bridge](https://sg-accounting.co.uk/wp-content/uploads/2024/02/Frances-SG-Meet-the-Team.png) Client Director Frances Bridge Management Team All Members ![Kerry Newman](https://sg-accounting.co.uk/wp-content/uploads/2022/07/kerry-newman.png) Director of SG Accounting Kerry Newman ![Mahmoud Lababidi](https://sg-accounting.co.uk/wp-content/uploads/2026/08/Meet-the-team-mahmoud.png) Tax Manager Mahmoud Lababidi ![Amanda Griffiths](https://sg-accounting.co.uk/wp-content/uploads/2023/11/Amanda-Sg-Profile-1.1.png) Accounts Manager Amanda Griffiths ![Dan Mepham](https://sg-accounting.co.uk/wp-content/uploads/2022/07/dan-mepham.png) Director Dan Mepham ![Jon-Marc Spatcher](https://sg-accounting.co.uk/wp-content/uploads/2022/07/jon-marc-spatcher.png) Director Jon-Marc Spatcher ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - LinkedIn This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [3 months free Fee Protection Cover](https://sg-accounting.co.uk/3-months-free-fee-protection-cover/) **Published:** August 24, 2022 **Author:** Dan Mepham **Content:** # # **Get 3 months free Fee Protection Cover when you join SG Accounting** Opt in at sign-up and we’ll add Fee Protection Cover to your package, free for 3 months. This covers the costs of professional fees in the event of an HMRC enquiry (including IR35 enquiries) and includes a free business legal helpline. £100,000 of cover provided by PfP Limited. Their service includes: **IR35 Status Check** This is where HMRC write asking if it has been considered whether the client falls within the scope of IR35. The limit of indemnity for this is £2,000. **IR35 Disputes** This is where HMRC states a client should be subject to the IR35 legislation following a PAYE Compliance Visit or the issue of a notice under paragraph 24(1) Schedule 18 FA 1998. It will feature a disagreement over whether this legislation applies. **A Full Enquiry** This is an extensive examination which considers all aspects of the self assessment tax return. It will involve a comprehensive review by HMRC of all books and records relating to the entries made on the return. It will also feature the issue of a notice under S9A/S12AC TMA 1970 or paragraph 24(1) Schedule 18 FA 1998. **An Aspect Enquiry** This is where HMRC enquires into one or more aspects of the self assessment tax return, which may involve clarification of particular entries to detailed consideration of whether those entries have been treated correctly for tax purposes. It may involve a check on the records upon which the particular entries were based. It will also feature the issue of a notice under S9A/S12AC TMA 1970 or paragraph 24(1) Schedule 18 FA 1998. **A Business Inspection Notice** This is where HMRC exercise their power to request entry to a person’s business premises and inspect the business premises, assets, goods and documents. It will feature the approval of an “Authorised Officer” of Revenue & Customs and the issue of an Inspection Notice for a short notice or unannounced visit or where the proposed inspection has been approved by the First-tier Tribunal. The notice will be issued under Schedule 36 paragraph 12(2) FA 2008. **VAT/PAYE/CIS/CJRS/NMW Compliance Visit** This is where HMRC wish to carry out a routine PAYE/VAT/CIS/CJRS/NMW (National Minimum Wage) Compliance Visit where it is considered that professional representation is necessary and the matter cannot be dealt with by the client alone. The limit of indemnity for this is £2,000. **VAT Disputes** This is a challenge by HMRC to the accuracy or completeness of returns submitted. It will feature a disagreement over both the way in which VAT has been operated and over the amount of VAT due. **PAYE/NIC/CIS Disputes** This is a challenge by HMRC to the accuracy or completeness of returns submitted in accordance with Pay As You Earn/CIS Regulations. It will feature a disagreement over both the way in which PAYE/CIS has been operated and over the amount of PAYE/NIC due. **Employment Status Dispute** Where HMRC state that an individual previously classed as self-employed should have been subject to PAYE. **IHT Cover** This relates to an estate or trust where our involvement is considered necessary following the submission of an IHT return which has been wholly prepared by us. The limit of indemnity for this is £5,000. **Gift Aid Inspections** Where a registered charity operating a Gift Aid Scheme with HMRC is being reviewed. The limit of indemnity for this is £2,000. **Partners/Directors Cover** Where a partnership or limited company join we may also make a claim in the event of either an aspect or full enquiry into the personal returns of the partners and directors and their spouses and company secretaries (where we prepare the tax return). This automatic cover will not extend to rental income in excess of £50,000 per annum (before expenses) or any other business activities. We must also be the tax return agent at the time the enquiry commences. **Application for a Judicial Review** This is an application (during the course of a valid claim under the Policy) to the Administrative Court to challenge a decision of an official where no other legal recourse is available to the applicant. The limit of indemnity for this is £5,000. Code of Practice 8 Investigations This is where HMRC Specialist Investigations conduct an investigation in accordance with Code of Practice 8. The limit of indemnity for this is £5,000. **Interventions Cover (Informal Enquiries)** This is where HMRC issue a routine letter or telephone call with a view to obtaining clarification on particular points on a self assessment tax return without the issue of a statutory notice and not dealt with or excluded under any other section of this policy. The limit of indemnity for this is £2,000. **At the end of the free period, we will automatically add £14.50+VAT for Limited Companies, and £10+VAT for Sole Traders, to your monthly direct debit unless you instruct us otherwise. You can opt out of FPC any time by giving us 1 month’s notice.** ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") --- ### [IT Security Policy](https://sg-accounting.co.uk/it-security-policy/) **Published:** February 21, 2022 **Author:** Dan Mepham **Content:** # # Our IT Security Policy We have extended policies and training plans for our employees, third parties and our entire supply chain. The below is just a topline example of our approach to cyber security. If you would like any further information please get in touch. **Devices** - All company devices are protected with an adequate password - Company devices are regularly updated with the latest software releases and patches - Devices are locked when not in use or unattended - Devices are appropriately secured before employees leave desks and overnight - Approval is gained for removing devices from company premises - Staff adhere to company policy regarding the installation of third-party applications and personal use - Employees to carry out only permitted tasks on a personal device - Employees only make use of secure and private networks to log into company systems **Email Security** We ask employees to: - Verify the legitimacy of emails - Avoid opening attachments or clicking on links included in emails which appear suspicious - Look out for any significant errors relating to grammar in emails - Report any suspicious emails to the IT department **Password management** We have a clear and strict password management policy which includes: - Passwords should be a minimum of 8 characters in length - Do not use common passwords or one-word passwords – e.g. password, abcdefgh, Iloveyou - Do not reuse your company password for non-work-related purposes - Make use of multi factor authentication where it is available - Do not share passwords with another employee. You must have an individual account for any company applications or systems that you make use of - Do not write passwords down. The business has implemented a password management tool, and employees make use of this **Secure Data Transfer** - We only transfer confidential data to other employees or third parties when absolutely necessary - We only transfer confidential information over company networks - We verify information relating to the recipient and ensure that they have sufficient security measures in place on their side before sending the data - Employees gain sign off from a member of senior management for the data transfer - We ensure that data transfers take place in accordance with GDPR and any confidentiality agreements which may be in place --- ### [Thank you for getting in touch](https://sg-accounting.co.uk/contact/thank-you/) **Published:** October 12, 2018 **Author:** Dan Mepham **Content:** ![](https://sg-accounting.co.uk/wp-content/uploads/2021/08/message-sent.png "message-sent | SG Accounting") # Thank you. **We’ll be in touch shortly.** We’ll give you a call very shortly to discuss your requirements – please look out for our call and also add <newbusiness@sg-accounting.co.uk> to your safe sender list so we don’t end up in your spam! Want to speak to someone straight away? Call us now on 01962896968 --- ### [Crypto Tax](https://sg-accounting.co.uk/crypto-tax/) **Published:** October 16, 2024 **Author:** Finley Turner **Content:** # Crypto tax advice and returns - Specialist crypto tax team – always up to date with legislation - Great tech and systems – 20% discount on Recap software - Your crypto tax efficiency, our priority – get advice early to save on tax [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Crypto Tax Made Easy When you’re an SG client, you get access to our specialist Tax team who can help you with advice and returns for your Crypto assets. If you have crypto investments, use cryptocurrency, or have done so in the past, you will need to complete a tax return and declare your crypto assets. There’s been some confusion in the past around the treatment of crypto, but HMRC’s stance is now clear and we at SG Accounting have all the crypto tax knowledge to help you. We can process your crypto tax return smoothly and efficiently whilst offering the best advice on crypto tax efficiency. And we can offer you a 20% discount on ReCap crypto tax software. ![Crypto tax hand with a bitcoin](https://sg-accounting.co.uk/wp-content/uploads/2024/04/Crypto-tax-hand-with-a-bitcoin-scaled-1.png "Crypto tax hand with a bitcoin scaled | SG Accounting") ## SG Accounting Crypto Tax Service We’ll look at your entire tax situation alongside your crypto assets to offer you the most tax efficient position. An advice call to understand how your crypto activities can affect your tax position can be worth it’s weight in bitcoin, so get in touch with your SG Client Director sooner rather than later. Pricing for a crypto tax return really depends on the type of assets and volume of transactions – so please get in touch for a quote. ## Here’s how tax on crypto works and how we can help you navigate your tax situation: ### HMRC’s Position - Contrary to the initial interpretation, HMRC now explicitly states that the buying and selling of cryptoassets is not comparable to gambling but that any gains are taxable and likely subject to Capital Gains Tax. ### Paying Taxes on Crypto - Despite financial institutions not recognising cryptoassets as money or currency, HMRC treats them similarly to shares, which means they will be subject to Capital Gains Tax and/or Income Tax, depending on the type of transaction. ### Crypto Tax Calculation - The type of tax you’ll pay depends on the specific transactions you make with your crypto. For capital gains exceeding the £6,000 tax-free allowance, you’ll pay 10% or 20% tax. Additional income from crypto, surpassing the personal allowance, incurs tax rates between 20% to 45% determined by your Income Tax band. Notably, for the 2024-2025 financial year, the tax-free allowance for capital gains has been reduced to £3,000. And remember, you should always report your losses as these can be utilised against future gains. ### HMRC Can Track Crypto - HMRC has the capability to track cryptoasset transactions effectively using information from exchanges like crypto.com, through a data-sharing program with UK exchanges an through ‘Know Your Customer’ information provided during exchange or wallet sign-ups. HMRC have started sending out ‘nudge’ letters to prompt individuals and businesses to report their crypto activity. If you’re looking for help navigating your Crypto Tax situation, get in touch with your Client Director who can organise a call with our specialist tax team. If you’re not yet an SG Accounting client, [get in touch now to see how we can help you](https://sg-accounting.co.uk/contact/). ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - LinkedIn This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Contractor Accounting](https://sg-accounting.co.uk/contractor-accounting/) **Published:** January 27, 2025 **Author:** Finley Turner **Content:** # **Specialist** Contractor Accounting ![£59.50 per month plus FREE accounts catch-up](https://sg-accounting.co.uk/wp-content/uploads/2025/05/offer-price-banner-halfprice-2025c.png "offer-price-banner-halfprice-2025c | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![FreeAgent Logo](https://sg-accounting.co.uk/wp-content/uploads/2024/09/FreeAgent_Logo_Master_Blue70_RGB.png "FreeAgent_Logo_Master_Blue70_RGB | SG Accounting") ![The Contracting Awards - Best Contractor Accountancy (1,000 - 2,500) Finalist](https://sg-accounting.co.uk/wp-content/uploads/2024/09/Transparent-Best-Contractor-Accountancy-1000-2500.png "Transparent Best Contractor Accountancy (1,000 – 2,500) | SG Accounting") ## Why Choose SG Accounting? - Direct line to your personal contractor accountant - FreeAgent software included - Expert tax advice - No switching/set up fees - First 3 months half price [Find out more](/limited-company-accountants-for-contractors/#switching-accountants) ## Call us now [01962 896968](tel:01962868968) or request a quick callback: Name(Required) First Last Phone number(Required) Email(Required) Submit ![First 3 months half price](https://sg-accounting.co.uk/wp-content/uploads/2023/09/3-months-half-price-banner.png "| SG Accounting") ## Clear pricing, great value service £119 **£59.50** per month +VAT ### Limited Company Accounting £59.50 +VAT per month for the first 3 months, then £119 per month +VAT [Find out more about SG Limited Company Contractor Accounting](/prices/) £39 **£19.50** per month +VAT ### Accounting for Sole Traders, Partnerships or the Self Employed £19.50 +VAT per month for the first 3 months, then £39 per month +VAT [Find out more about SG Sole Traders, partnerships or the Self Employed](/prices/) **£12** per week +VAT ### Umbrella Company payroll service From £12 per week for the first 4 weeks, then £18 per week [Find out more about SG Umbrella](https://sg-umbrella.co.uk/) ## Our contractor’s knowledge hub - [ ![Business owner taking dividends from his limited company](https://sg-accounting.co.uk/wp-content/uploads/2024/03/Dividends-for-limited-companies-scaled.jpg "Dividends for limited companies | SG Accounting") ](https://sg-accounting.co.uk/blog/a-complete-guide-to-dividends-for-limited-companies/) ### How do dividends for Limited Company owners work? Published On: March 25th, 2024 When running your Limited Company, it's important to understand how dividends work in order to maximise your take-home pay and become more tax efficient. Whilst consulting your specialist accountant is recommended for \[...\] - [ ![Various cryptocurrencies](https://sg-accounting.co.uk/wp-content/uploads/2023/11/tax-on-cryptocurrency-1-scaled.jpg "tax on cryptocurrency | SG Accounting") ](https://sg-accounting.co.uk/blog/do-you-owe-tax-on-cryptocurrency-in-the-uk/) ### Do you owe tax on cryptocurrency in the UK? Published On: November 23rd, 2023 If you have, or have previously had any dealings with cryptoassets the chances are there will be a tax liability for you. There’s been some confusion in the past around the tax \[...\] ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - URL This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Limited or Umbrella?](https://sg-accounting.co.uk/limited-or-umbrella/) **Published:** July 22, 2021 **Author:** Janet Bower **Content:** # Limited or Umbrella? With SG you don’t have to choose. ![SG Accounting From £49.50 per month](https://sg-accounting.co.uk/wp-content/uploads/2022/09/offer-price-banner-halfprice.png "SG Accounting Offer | SG Accounting") ## Which business model? If you’re planning on contacting for 6 months or more, and you’re going to be earning more than £35,000 per year, the most tax efficient set-up for you will be to set up a Limited Company. You can pay yourself a combination of salary and dividends to ensure you’re more tax efficient. There’s also a lot more flexibility in the way that you can manage your expenses. If you travel or eat out while on business, some or all of this expenditure can be claimed back. Even the tools that help you to do your job can be bought through your limited company to further maximise its profitability. Working through an umbrella company tends to be for those contracting for only a short period, or if you’re not sure that contracting is a long term thing for you. Simple, right? ## The IR35 factor Regardless of the length of your contracting career, or level of earnings, you may find yourself having to work through an umbrella company for some contracts, due to the IR35 status determined by the end client. IR35 (also known as Intermediaries Legislation) is legislation created to identify individuals falsely establishing limited companies to take advantage of the tax benefits of the business model. This is often referred to as “disguised employment”. There are a number of rules that aim to determine whether your contract falls inside or outside of IR35. If your contract is ‘inside’ IR35, you will be taxed in a similar way to if you were a permanent employee – either via your client’s payroll or through an Umbrella Company. If your contract is ‘outside’ the legislation, you would be able to work through your limited company and pay yourself in a more tax efficient fashion. With IR35 determinations in the hands of end hirers, even long-term Limited contractors generally need the flexibility to switch between umbrella and limited for different contracts. SG Contractor Accounting – Limited with integrated Umbrella With SG Contractor Accounting, you don’t need to choose between the two – when you sign up, you get both Limited and Umbrella, with the ability to switch between the two seamlessly depending on the contract you’re working on. There are no additional fees, and keeping your Umbrella and Limited in one place means we have a holistic view of your finances, more effectively advising you on tax efficiencies and longer term financial planning. [Find out more about SG Umbrella](/umbrella) ## What you get with SG Accounting ![Value](https://sg-accounting.co.uk/wp-content/uploads/2021/06/value-icon.png "value-icon | SG Accounting") ### **Value for Money** **£119** - Fixed fee packages or build your own - Unlimited advice from your personal accountant - No switching, catch-up or joining fees, tie-in periods or leaving fees - [FreeAgent](https://sg-accounting.co.uk/freeagent/) included - [Free Fee Protection Cover for 3 months plus Business Legal Helpline](https://sg-accounting.co.uk/3-months-free-fee-protection-cover/) ![Advice and Information](https://sg-accounting.co.uk/wp-content/uploads/2021/06/advice-i-icon.png "Advice and Information | SG Accounting") ### **Advice that saves** **££** - Bespoke tax planning advice (including crypto) to suit individual circumstances - Wealth management review with our trusted partners to discuss pension and insurance needs - Specialist support for other business interests including buy to let and start-ups ![Reassuring Heritage](https://sg-accounting.co.uk/wp-content/uploads/2022/09/reassuring-icon.png "| SG Accounting") ### **A Reassuring Heritage** - Professional, qualified accountants working with contractors and small businesses since 1995 - Proud of our 5\* review ratings - We’ve built our business primarily on recommendation - FCSA accredited for assured high standards - Proudly independent [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) [See our prices](https://sg-accounting.co.uk/prices/) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - LinkedIn This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [IRIS OpenSpace](https://sg-accounting.co.uk/iris-openspace/) **Published:** June 24, 2025 **Author:** Janet Bower **Content:** # IRIS OpenSpace IRIS OpenSpace is accounting document management software that lets you sign, seal, and share accounting documents from anywhere. [Log into your account](https://sgaccounting.irisopenspace.co.uk/) ## Welcome to Tax Hub – Powered by IRIS OpenSpace – our secure, cloudbased document management platform. With OpenSpace, you can exchange, review, and sign documents anytime, anywhere, without installing software. This guide will take you through: - **Setting up an account** - **Account maintenance** - **Navigating OpenSpace** - **Completing the eChecklist** If you need further assistance, please contact your SG Accounting tax team: **[01962 867550](tel:01962%20867550)** \| **<tax@sg-accounting.co.uk>** - [### Setting up an Account](#tab-42d8c63ecb6092dfc4a) - [### Account Maintenance](#tab-6663faec5d81fd2d51e) - [### Navigating OpenSpace ](#tab-62b55b7761f1401d607) - [### Completing the eChecklist ](#tab-c7a1274e9d5dc1debdb) - [### Setting up an Account](#tab-42d8c63ecb6092dfc4a) **Registration Email** - You will receive an email from SG Accounting with the subject **“Activate your IRIS OpenSpace account”**. - It contains a **unique link** to set up your password and access the **Tax Hub**. **Tip:** Check your spam/junk folder if you don’t see the email. **Activating Your Account** 1. Click the link in the registration email. 2. Verify your name and email, then choose a password. This must include **at least one letter** and **one number**. 3. Click **Set Password**. 4. Upon success, you’ll see a **confirmation screen**. **First Login** - Visit <https://sgaccounting.irisopenspace.co.uk> - Enter your **email** and **new password**. - On your first login, **agree** to the IRIS Terms & Conditions. **Forgotten Password** - At the login page, click **Forgot Password** or go to: <https://www.irisopenspace.co.uk/Account/PasswordReset> - Enter your registered email and follow the emailed link to reset. - [### Account Maintenance](#tab-6663faec5d81fd2d51e) **Changing Your Email Address** 1\. Click **Account** (top right) → **User Details**. 2\. Enter your **new email** and click **Update**. 3\. You will be logged out; log in again using the **new email**. **GDPR Reminder:** Each account must have its own unique email address. If multiple users currently share one email, please provide a separate email for each additional account. **Changing Your Password** 1\. Click **Account** → **Change Password**. 2\. Enter your **current password**, **new password** (with one letter & one number), and **confirm** it. 3\. Click **Update**. **Notifications** - Whenever we upload or request documents, you’ll receive an **email alert**. - Emails contain a **direct link** to the relevant document or the main OpenSpace login. - You can also enable **browser notifications** in your profile settings. - [### Navigating OpenSpace ](#tab-62b55b7761f1401d607) **Dashboard Overview** - Upon logging in, the **Dashboard** lists: - **Folders** (e.g., “Tax Year 2024”) - **Documents** awaiting your review, signature, or upload. - **eChecklist** status (“Not started”, “In progress”, “Finalised”) **Viewing & Downloading Documents** - Click a **document name** to preview in browser. - Use the **Download** icon to save a copy locally. - Signed or approved files are autoarchived in **Completed**. **Uploading Documents** 1\. Select the **folder** or open the relevant **eChecklist** entry. 2\. Click **Upload** or **Attachments**. 3\. Browse and select your file; click **Save**. **File Size Limits:** Please compress files larger than **20 MB** as uploads exceeding this may fail. **Using the Tax Hub** - The **Tax Hub** is your central workspace for all tax related items. - Access it via the **Tax Hub** link in your welcome email or on our website. - [### Completing the eChecklist ](#tab-c7a1274e9d5dc1debdb) The eChecklist helps us gather all information needed for your Self Assessment. Follow these steps: **Note:** The eChecklist is optimised for **laptop, PC, or tablet** only. Mobile phone view is not supported. **1. Locate the Checklist** - On the Dashboard, click **eChecklist** → find your name under **Not started** or **In progress**. **2. Answer Fields** - Click the **Checklist** link to open. - Fill in each field; click **Mark as answered** once complete. **3. Additional Information** - If your scenario isn’t covered by existing fields (e.g. Residency status, foreign dividends or you have new sources of income), use the **“Additional Information”** box, or email further details to [**tax@sg-accounting.co.uk**](mailto:tax@sg-accounting.co.uk) prior to finalisation. **4. Uploading Supporting Documents** - Within the eChecklist, click **Attachments**. - Upload relevant files (e.g., P60s, dividend vouchers, rental statements). **5. Finalising** - Once all items are complete, click **Finalise eChecklist** and tick the confirmation box. - **Important:** Finalising **locks** the checklist—no further edits are possible. - If you need to add information after finalising, please email details to [**tax@sg-accounting.co.uk**](mailto:tax@sg-accounting.co.uk). ## Frequently Asked Questions #### [Q: Why has SG moved to IRIS OpenSpace? ](#6c0ad1cf3fe9cce2d) A: To **speed up** document exchange, provide **24/7 access**, and ensure all data is **securely managed**. #### [Q: Is my data secure? ](#f07e4a5e5fdabe20c) A: Yes. IRIS OpenSpace uses **industry leading encryption**, meets **GDPR** requirements, and stores data offsite. #### [Q: Do I need to install software? ](#fd2ef41cf7d839d1b) A: No. OpenSpace is fully **browser based** – accessible on desktop, laptop, tablet, or mobile. #### [Q: Can I complete the e-checklist on my mobile? ](#336a16b78e4f31173) A: Yes – However you will need to view the page in desktop view. We would recommend accessing the e-checklist via a laptop, PC or tablet. #### [Q: Browser Compatibility? ](#6aab554b95e6f1f97) A: For optimal performance, use **Chrome**, **Edge**, or **Firefox**. #### [Q: Can two people share an email address? ](#3e39d62a7b251a34c) A: No – Each individual will require a separate email address to be registered for the Tax Hub. This is a GDPR requirement. You can however give access to you account to other OpenSpace users. If you would like to add someone else, such as a partner, wealth manager or power of attorney then please let us know. #### [Q: Who can help me? ](#96c7e884280286b24) A: While IRIS Support focuses on technical issues, your **SG Accounting team** is your first point of contact for queries. ## Preparing Your Tax Return – Information Checklist Use the list below to gather documents before completing your eChecklist: | **Category** | **Examples** | |---|---| | Employment Income | P60, P45, P11D (benefits in kind) | | Self Employed Income | Sales records, expense receipts | | Property Income | Rental statements, agent fees | | Investment Income | Bank interest, dividend vouchers | | Pension & Annuities | Pension statements | | Other Income | Overseas income, miscellaneous receipts | | Allowable Expenses | Subscriptions, travel, home office costs | | Reliefs & Contributions | Pension, Gift Aid, Marriage Allowance | | Capital Gains | Acquisition/disposal dates and values | | Crypto & Digital Assets | Transaction reports | | Student Loans & Benefits | Loan statements, Child Benefit details | | Overseas Aspects | Foreign tax paid, residency details | ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Comments This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [IRIS OpenSpace](https://sg-accounting.co.uk/iris-openspace-faqs/) **Published:** March 25, 2025 **Author:** Jen Winslow **Content:** # IRIS OpenSpace IRIS OpenSpace is accounting document management software that lets you sign, seal, and share accounting documents from anywhere. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Iris OpenSpace FAQs **Q: Why are you moving to IRIS OpenSpace?** **A:** We are transitioning to IRIS OpenSpace to speed up and simplify the tax return process. This platform allows us to: - Streamline document exchange efficiently - Provide you with 24/7 access to your tax-related documents - Ensure that your data is securely managed at every step By integrating IRIS OpenSpace, we aim to deliver a faster, more secure, and convenient service experience. **Q: Is IRIS OpenSpace secure?** **A:** Yes, absolutely. IRIS OpenSpace has been built with robust security protocols designed to protect your sensitive financial information. It complies with all relevant data protection regulations, ensuring that your documents and personal data are handled with the highest level of security and confidentiality. **Q: Do I need to install any software?** **A:** No installation is required. Since IRIS OpenSpace is cloud-based, you can access it using any internet browser—whether you are on a desktop, laptop, or mobile device. There is no need to download or install any additional software, making it simple and convenient for you to use. **Q: How do I register for IRIS OpenSpace?** **A:** In early April, you will receive an email containing a unique registration link. Simply click on the link, follow the prompts to create your password, and you will be all set to access our Tax Hub through the platform. This easy registration process is designed to get you up and running quickly. **Q: What happens if I forget my password?** **A:** If you ever forget your password, there is no need to worry. You can easily reset it by clicking on the "Forgot Password" link on the IRIS OpenSpace login page. Just follow the instructions provided, and you will be able to create a new password securely. **Q: Will I still be able to contact you directly?** **A:** Absolutely. Although IRIS OpenSpace streamlines our document-sharing process, our commitment to personalised service remains unchanged. Our team is always available to assist you with any questions or concerns via phone or email, ensuring you continue to receive the support you need. **Q: When will I receive my tax return to review?** **A:** Once you have submitted your information via the Tax Hub, our team will prepare your tax return promptly. You will then receive an email notification letting you know that your return is ready for your review and approval. We strive to keep you informed every step of the way. **Q: What if I have questions while using IRIS OpenSpace?** **A:** We are here to help at every stage of your experience with IRIS OpenSpace. If you have any questions or need support while using the platform, please do not hesitate to contact our team by phone or email. We are committed to providing timely and effective assistance. **Q: Where can I find the Tax Hub?** **A:** You will receive a direct link to the Tax Hub in your registration email. Additionally, for your convenience, a permanent link to the Tax Hub will be available on our website. This ensures that you can easily access your tax documents whenever needed. **Q: Can two individuals use the same email address for IRIS OpenSpace?** **A:** While it is technically possible for two individuals to use the same email address to access IRIS OpenSpace, we strongly advise against this. To ensure GDPR compliance and protect your personal and financial data, we highly recommend that each individual sets up their own account with a unique email address. This helps to maintain confidentiality and ensures that only you have access to your own documents. ## What next? Got further questions about IRIS OpenSpace? Our team is always available to assist you with any questions or concerns via phone or email, ensuring you continue to receive the support you need. Simply get in touch with your SG Accounting Client Director. ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Company This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Contractor Accounting](https://sg-accounting.co.uk/contractor-accounting-1/) **Published:** April 17, 2020 **Author:** Dan Mepham **Content:** # **Specialist** Contractor Accounting Here at SG we specialise in the complex and unique needs of contractors. Join us and get a personal service delivered by a genuinely independent contractor accounting specialist with your best interests at heart. ![£59.50 per month plus FREE accounts catch-up](https://sg-accounting.co.uk/wp-content/uploads/2025/05/offer-price-banner-halfprice-2025c.png "offer-price-banner-halfprice-2025c | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![The Contracting Awards - Best Contractor Accountancy (1,000 - 2,500) Finalist](https://sg-accounting.co.uk/wp-content/uploads/2024/09/Transparent-Best-Contractor-Accountancy-1000-2500.png "Transparent Best Contractor Accountancy (1,000 – 2,500) | SG Accounting") ![FreeAgent](https://sg-accounting.co.uk/wp-content/uploads/2021/09/freeagent-logo.png "FreeAgent | SG Accounting") ## Why SG Accounting? Contractor’s needs are more complex than those of standard Limited Company’s, and you want to be dealing with an accountant that understands your industry, speaks your language, and knows what you’re up against when it comes to confusing tax legislation that could affect your take home pay. That’s where we come in! Founded in 1995, contractors have been our specialty, and every one of our accountants is fully trained in the challenges you’ll face when running your Limited Company. Sounds good? Get in touch to find out more. ## **Switching** accountant? - Quick and easy switching service – we catch up your current year’s accounts for free too! - Tax efficiency review and IR35 advice - Direct line to your personal contractor accountant - FreeAgent software included [Find out more](/limited-company-accountants-for-contractors/#switching-accountants) ## Just starting out? - Help with full company set-up - Advice on and preparation of all required Companies House and HMRC filings for approval - Advice on all taxes - FreeAgent software included [Find out more](/limited-company-accountants-for-contractors/#starting-out) ![First 3 months half price](https://sg-accounting.co.uk/wp-content/uploads/2023/09/3-months-half-price-banner.png "| SG Accounting") ## Clear pricing, great value service £119 **£59.50** per month +VAT ### Limited Company Accounting £59.50 +VAT per month for the first 3 months, then £119 per month +VAT [Find out more about SG Limited Company Contractor Accounting](/prices/) £39 **£19.50** per month +VAT ### Accounting for Sole Traders, Partnerships or the Self Employed £19.50 +VAT per month for the first 3 months, then £39 per month +VAT [Find out more about SG Sole Traders, partnerships or the Self Employed](/prices/) **£12** per week +VAT ### Umbrella Company payroll service From £12 per week for the first 4 weeks, then £18 per week [Find out more about SG Umbrella](https://sg-umbrella.co.uk/) ## Our contractor’s knowledge hub - [ ![Business owner taking dividends from his limited company](https://sg-accounting.co.uk/wp-content/uploads/2024/03/Dividends-for-limited-companies-scaled.jpg "Dividends for limited companies | SG Accounting") ](https://sg-accounting.co.uk/blog/a-complete-guide-to-dividends-for-limited-companies/) ### How do dividends for Limited Company owners work? Published On: March 25th, 2024 When running your Limited Company, it's important to understand how dividends work in order to maximise your take-home pay and become more tax efficient. Whilst consulting your specialist accountant is recommended for \[...\] - [ ![Various cryptocurrencies](https://sg-accounting.co.uk/wp-content/uploads/2023/11/tax-on-cryptocurrency-1-scaled.jpg "tax on cryptocurrency | SG Accounting") ](https://sg-accounting.co.uk/blog/do-you-owe-tax-on-cryptocurrency-in-the-uk/) ### Do you owe tax on cryptocurrency in the UK? Published On: November 23rd, 2023 If you have, or have previously had any dealings with cryptoassets the chances are there will be a tax liability for you. There’s been some confusion in the past around the tax \[...\] [![custom logoSG Accounting](https://sg-accounting.co.uk/wp-content/plugins/wp-review-slider-pro-premium/public/partials/imgs/google_small_icon.svg)](https://www.google.com/search?q=SG+Contractor+Accounting+Winchester+UK&ludocid=6145753469151450892#lrd=0x48740d8b3a75ace5:0x554a1a37f5e5970c,1)SG Accounting 4.6 Stars - Based on 110 User Reviews ## See what other contractors think of our service - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less - Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less - K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less - Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less - internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Andrew Faiers 3/12/2020 I have been using SG Accountants for over 2 years and from the first introductory meeting with Dan the service has been excellent. I have been really impressed with the professional, helpful and friendly approach made by all members of the team. All questions and queries have always been dealt with promptly, often on the same day which highlights their positive approach to clients. I will not be looking elsewhere! read moreread less Steve Cliff 3/12/2020 I have been with SG since starting contracting in 1996 and was impressed from the start when Richard Stilwell travelled to Warrington from Winchester to introduce himself and the company. SG have always delivered excellent service and I would not hesitate to recommend them to others. read moreread less - Steve Mcfarlane 3/12/2020 SG have been efficient, proactive and responsive in the 2 years that I have used them as my company accountancy service. My questions are always answered in a timely manner and the team I deal with are always courteous and professional in their communications. read moreread less Cubby Fox 3/12/2020 Great service from the team at SG. Personal, responsive, can explain things to someone with zero accounting knowledge! I especially like dealing with Lee - he has answered so many of my last minute questions. Highly recommend. read moreread less John Hall 3/12/2020 Setting up my new venture was made so much easier by SG. From initial advice, through setting up the limited company, to getting my accounting package prepared and bank account set up. Now that I have been up an running for a while they have been a great support with the day to day issues, so that I can get on with MY business read moreread less Becky John 3/12/2020 Fantastic support always from SG. Responsive, knowledgeable and nothing is too much trouble. I came to them via a recommendation and would recommend them to you, too read moreread less - Nanda Kumar 3/12/2020 Good and professional accounting services. They are always prompt in responding to our queries. Using them for 8 years and always awesome. read moreread less Ksenia Belova 3/12/2020 I regularly recommend SG Contractor Accounting to my friends and colleagues, as I am continuously impressed with their service standard. My initial contact and in-person meeting with Dan set the scene for an efficient and supportive working relationship. The team is extremely responsive, professional, helpful and proactive. They have never failed to provide a prompt response to many of my ad hoc queries, and in addition are always proactive when time comes to returns or any other deadlines. The ability to use accounting software as part of some of the packages is extremely helpful as it links in with SG's own systems and means information flow is streamlined. I think the services is fantastic and great value for money and I have no desire to go anywhere else. Thanks SG Team! read moreread less Andy Rose 3/12/2020 Couldn't recommend this team more. I'm a total moron when it comes to all this tax/company admin stuff, and I ask them hundreds of dumb questions quite frequently. Not only do they always go above and beyond in explaining everything to me, they also do it in a good mood. As much as is possible they do all the heavy lifting and they just tell me what I need to do in terms of transferring the right amounts from the right bank accounts. Very little is required from me, which is exactly what I want. Total pros. read moreread less Guy Hanson 3/12/2020 The team at SG are very helpful and knowledgeable. From the outset, they have covered all of my company financial requirements and have assisted with personal tax too. SG was recommended to me and I can do the same. read moreread less - John Begley 3/12/2020 SG have looked after me for 22 years and have been so reliable and professional. Queries answered promptly, tricky problems resolved intelligently and with real care and a personal touch. I have no hesitation or doubt in recommending them to anyone. read moreread less Derren Cooke 3/12/2020 I have been using SG contractor accounting for about 10 years now, I don't feel the need to go anywhere else as I always get great service and advice when needed. Even though I have seen the company grow they haven't lost that personal touch. They are very efficient in what they do which let's me get on with what I am good at. I am hoping for many more years of top quality service from them. I can highly recommend. read moreread less andydmead 3/12/2020 I've recently signed up with SG Accounting and have to say their on-boarding, their explanation of what is required and how and when things need to happen has been superb. They have ensured we have had both a telcon and met face to face and I feel confident I am in very safe hands. read moreread less Paul R 3/12/2020 I've been working with the SG Accounting team for a few years now. I was new to contracting & was quite daunted initially. Richard Murray was my initial point of contact and helped set up my business. Richard is very good at explaining things in a simple way. Their accountancy process is simple, and support for any queries is dealt with promptly.. I would personally recommend SG and Rich Murray, he's a very adept and professional. I look forward to continuing to work with you all. Thanks to the rest of the team. read moreread less Call us now on [01962 896968](tel:01962896968) [Enquire Now](#enquiryForm) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Name This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Contractor Accounting Free-Work](https://sg-accounting.co.uk/contractor-accounting-free-work/) **Published:** August 15, 2024 **Author:** Jen Winslow **Content:** # **Specialist** Contractor Accounting Here at SG we specialise in the complex and unique needs of contractors. Join us and get a personal service delivered by a genuinely independent contractor accounting specialist with your best interests at heart. ![£59.50 per month plus FREE accounts catch-up](https://sg-accounting.co.uk/wp-content/uploads/2025/05/offer-price-banner-halfprice-2025c.png "offer-price-banner-halfprice-2025c | SG Accounting") ![](https://sg-accounting.co.uk/wp-content/uploads/2024/08/free-work-logo.png "free-work-logo | SG Accounting") [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ![FreeAgent](https://sg-accounting.co.uk/wp-content/uploads/2021/09/freeagent-logo.png "FreeAgent | SG Accounting") ![SG Contractor Accounting - proud finalists of the 2023 Contracting Awards - best contractor accountancy](https://sg-accounting.co.uk/wp-content/uploads/2023/03/2023-Best-Contractor-Accountancy1000-2500-clients.png "The Contracting Awards 2023 Finalist | SG Accounting") ## Why SG Accounting? Contractor’s needs are more complex than those of standard Limited Company’s, and you want to be dealing with an accountant that understands your industry, speaks your language, and knows what you’re up against when it comes to confusing tax legislation that could affect your take home pay. That’s where we come in! Founded in 1995, contractors have been our specialty, and every one of our accountants is fully trained in the challenges you’ll face when running your Limited Company. Sounds good? Get in touch to find out more. ## **Switching** accountant? - Quick and easy switching service – we catch up your current year’s accounts for free too! - Tax efficiency review and IR35 advice - Direct line to your personal contractor accountant - FreeAgent software included [Find out more](/limited-company-accountants-for-contractors/#switching-accountants) ## Just starting out? - Help with full company set-up - Advice on and preparation of all required Companies House and HMRC filings for approval - Advice on all taxes - FreeAgent software included [Find out more](/limited-company-accountants-for-contractors/#starting-out) ![First 3 months half price](https://sg-accounting.co.uk/wp-content/uploads/2023/09/3-months-half-price-banner.png "| SG Accounting") ## Clear pricing, great value service £109 **£54.50** per month +VAT ### Limited Company Accounting £54.50 +VAT per month for the first 3 months, then £109 per month +VAT [Find out more about SG Limited Company Contractor Accounting](/prices/) £39 **£19.50** per month +VAT ### Accounting for Sole Traders, Partnerships or the Self Employed £19.50 +VAT per month for the first 3 months, then £39 per month +VAT [Find out more about SG Sole Traders, partnerships or the Self Employed](/prices/) £85 **£42.50** per month +VAT ### Umbrella Company payroll service £11.50 per week / £42.50 per month for the first month, then £23 per week / £85 per month [Find out more about SG Umbrella](https://sg-umbrella.co.uk/) ## Our contractor’s knowledge hub - [ ![Business owner taking dividends from his limited company](https://sg-accounting.co.uk/wp-content/uploads/2024/03/Dividends-for-limited-companies-scaled.jpg "Dividends for limited companies | SG Accounting") ](https://sg-accounting.co.uk/blog/a-complete-guide-to-dividends-for-limited-companies/) ### How do dividends for Limited Company owners work? Published On: March 25th, 2024 When running your Limited Company, it's important to understand how dividends work in order to maximise your take-home pay and become more tax efficient. Whilst consulting your specialist accountant is recommended for \[...\] - [ ![Various cryptocurrencies](https://sg-accounting.co.uk/wp-content/uploads/2023/11/tax-on-cryptocurrency-1-scaled.jpg "tax on cryptocurrency | SG Accounting") ](https://sg-accounting.co.uk/blog/do-you-owe-tax-on-cryptocurrency-in-the-uk/) ### Do you owe tax on cryptocurrency in the UK? Published On: November 23rd, 2023 If you have, or have previously had any dealings with cryptoassets the chances are there will be a tax liability for you. There’s been some confusion in the past around the tax \[...\] [![custom logoSG Accounting](https://sg-accounting.co.uk/wp-content/plugins/wp-review-slider-pro-premium/public/partials/imgs/google_small_icon.svg)](https://www.google.com/search?q=SG+Contractor+Accounting+Winchester+UK&ludocid=6145753469151450892#lrd=0x48740d8b3a75ace5:0x554a1a37f5e5970c,1)SG Accounting 4.6 Stars - Based on 110 User Reviews ## See what other contractors think of our service - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less - Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less - internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less - Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less - Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Keith Humphreys 3/12/2020 Found these guys on the internet after I'd heard some bad press about SJD. I first dealt with Dan Mepham who took me through the on-boarding process and from there on the service has always been top class. Everything I've asked them to do, they've done, from switching VAT schemes to migrating onto Freeagent. Highly recommended!!! read moreread less Leon Mediavilla 3/12/2020 An excellent firm with a comprehensive advisory service, whose are always on hand to promptly answer my questions. I needed clarification in many areas when I first started contracting, but Nadeem at SG made it easy and provided advice about all my issues. I would highly recommend their services to any contractor currently looking for an accountancy firm. read moreread less - Andy Tuthill 3/12/2020 SG have been my accountant for over 20 years. I have seen them grow and develop into the amazing service they provide today. They still retain their personal service, and have always gone above and beyond to offer any additional assistance I needed. I have recommended SG to many colleagues and will continue to do so. read moreread less andydmead 3/12/2020 I've recently signed up with SG Accounting and have to say their on-boarding, their explanation of what is required and how and when things need to happen has been superb. They have ensured we have had both a telcon and met face to face and I feel confident I am in very safe hands. read moreread less Adrian 3/12/2020 To get started, I was offered a face to face introductory meeting with Laura, my Account Manager, but as I was very busy I couldn't fit this into my diary so we did this by phone instead. Laura helpfully answered the questions I had about how I should operate tax efficiently and some other queries I had. Since then, all I've had to do is keep track of my invoices and bank account entries in Free Agent and SG take care of everything from there. Any further questions I have had have been answered very quickly. It all couldn't be easier and I can highly recommend SG. read moreread less vishal jajodia 3/12/2020 I am new to contracting and started with SG. Everything went smoothly from setting up company to getting VAT registered and raising my first invoice. They are professional, prompt and efficient. read moreread less - Ksenia Belova 3/12/2020 I regularly recommend SG Contractor Accounting to my friends and colleagues, as I am continuously impressed with their service standard. My initial contact and in-person meeting with Dan set the scene for an efficient and supportive working relationship. The team is extremely responsive, professional, helpful and proactive. They have never failed to provide a prompt response to many of my ad hoc queries, and in addition are always proactive when time comes to returns or any other deadlines. The ability to use accounting software as part of some of the packages is extremely helpful as it links in with SG's own systems and means information flow is streamlined. I think the services is fantastic and great value for money and I have no desire to go anywhere else. Thanks SG Team! read moreread less Ben Folwell 3/12/2020 Great hardworking team at SG. I've been contracting for the last couple of years and SG have helped brilliantly with not just the day to day running of the company but also the advice and help to set the company up initially. I would happily recommend SG to any colleagues requiring accounting services. Their fixed price model is very handy for controlling accounting costs. Rich Murray has been great with any queries I have and is always on hand to offer advice and support when I need it. Face to face meetings conducted in the pub always go down well. Rich however, never forgets when it's my round! read moreread less Labinot Z 3/12/2020 SG Accounting have been great at helping me setup and have managed my books continuously for me. Nadeem is my head accountant and hes been very thorough and transparent with me. Great Company. read moreread less Yosef Tilahun 3/12/2020 I just wanted to share a quick note and let you know that you guys do a really good job. I’m glad I decided to work with you. I can confidently say that I experienced the very best accounting service at SG Accounting service. It’s great how easy your spreadsheet is to update and manage. I never have any problem at all. What a remarkable staff member you have. You have a customer for life! Please keep up the great work. Yosef T. read moreread less - Steve Cliff 3/12/2020 I have been with SG since starting contracting in 1996 and was impressed from the start when Richard Stilwell travelled to Warrington from Winchester to introduce himself and the company. SG have always delivered excellent service and I would not hesitate to recommend them to others. read moreread less Becky John 3/12/2020 Fantastic support always from SG. Responsive, knowledgeable and nothing is too much trouble. I came to them via a recommendation and would recommend them to you, too read moreread less Andy Rose 3/12/2020 Couldn't recommend this team more. I'm a total moron when it comes to all this tax/company admin stuff, and I ask them hundreds of dumb questions quite frequently. Not only do they always go above and beyond in explaining everything to me, they also do it in a good mood. As much as is possible they do all the heavy lifting and they just tell me what I need to do in terms of transferring the right amounts from the right bank accounts. Very little is required from me, which is exactly what I want. Total pros. read moreread less Nadine Appiah 3/12/2020 I have recently joined the contracting world and was referred by a colleague to SG Accounting. My experience to date has been effortless. From the very introductory phone call to the team in Hampshire and meeting Laura (my personal accountant) in London. All my worries were taken care off. SG took control of the full set up and promptly responded all emails. I will most definitely refer SG to any contractor looking for a 1st class front to back service. I cannot thank you enough. read moreread less Call us now on [01962 896968](tel:01962896968) [Enquire Now](#enquiryForm) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Instagram This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Refer A Friend](https://sg-accounting.co.uk/clients/refer-a-friend-2024/) **Published:** April 17, 2020 **Author:** Dan Mepham **Content:** # credit us and we’ll credit you! £100 reward for every friend you refer this year ## A thank you for recommending us As an SG client, simply tell your friend or colleague to mention your name when they enquire and we’ll make sure that you receive your £100 credited back to the account you have with us, within 6 weeks of them joining as a monthly client. It’s as simple as that, and you can refer as many people as you like – you’ll get £100 for each and every one. Just let them know we’ll be in touch. You can even send an email from this page to multiple contacts to make it extra easy. Just add an email address, click the + icon to add more, adapt the text as you see fit and send. ### Your friend won’t miss out either They’ll get the best accounting service there is, plus their first three months half price, AND 3 months free fee protection cover. So you both get rewarded, it’s win-win! ![](https://sg-accounting.co.uk/wp-content/uploads/2024/12/SG-Main-Banner-Dec.jpg "SG Main Banner Dec | SG Accounting") #### Refer a friend (or 3) - LinkedIn This field is for validation purposes and should be left unchanged. - Your Name\* - Your Email Address\* - Your Friend's Email Address\* | | [![](https://sg-accounting.co.uk/wp-content/plugins/gravityforms/images/list-add.svg "Add a new row")](javascript:void(0);) [![](https://sg-accounting.co.uk/wp-content/plugins/gravityforms/images/list-remove.svg "Remove this row")](javascript:void(0);) | |---|---| Click on the + icon to add another email address - Your Personal Message\*Hi, I think you’ll like SG Accounting – I use them for all my accounting needs and think they’re great. I also get a direct line to my accountant for tax advice. When you join you’ll get your first three months half price, PLUS you'll get three months free fee protection cover which includes business legal helpline. You can call them on 01962 867550, email newbusiness@sg-accounting.co.uk or fill in the enquiry form here: https://sg-accounting.co.uk/contact/ Have a look and don’t forget to mention my name when you enquire. Thanks! Send Email ### Terms and Conditions Refer a friend to SG Accounting and when they join as a monthly client, you’ll receive £100 credited to your account with us within 6 weeks of them joining us. Just ask them to mention your name when joining, and let them know we’ll be in touch. There are no limits to the number of friends you can refer. ## We’re accredited and trusted [![FreeAgent logo in blue featuring a wing-like emblem to the left of the wordmark](https://sg-accounting.co.uk/wp-content/uploads/2026/08/freeagentlogo-copy.png "freeagentlogo copy | SG Accounting")](https://sg-accounting.co.uk/freeagent/) ![FCSA Limited Company Accredited Member](https://sg-accounting.co.uk/wp-content/uploads/2021/08/FCSA-ltd-company-accredited-member.png "FCSA Limited Company Accredited Member | SG Accounting") ![AAT Accredited](https://sg-accounting.co.uk/wp-content/uploads/2016/07/aat-accredited.png "AAT Accredited | SG Accounting") - Richard McCallum 5/01/2026 SG have always been highly responsive, efficient and helpful, offering great personalised advice as and when needed. Highly recommended. read moreread less James Cole 2/12/2026 I can highly recommend SG Accounting, their level of service has always impressed me. My Client Director and indeed his colleagues have always dealt with any queries I've had in a prompt & professional manner. I'm particularly impressed how they are able to convey accounting/tax advice in layman's terms, a very impressive skill. This has really helped me when it comes to decision making. Furthermore, it ensured the process of setting up a Limited Company along with managing the accounting was a smooth one. read moreread less Nigel Phillips 10/10/2024 I have worked with SG for several years now and only leaving as I am retiring. They have been really good for me, sorting out all my tax returns and issues. My only regret is I used other organisations before SG and it unfortunately cost me a lot of money. read moreread less Celeste McGill 10/10/2024 I started my company in 2023 with a solid understanding of my business but absolutely no experience on the finance side. After being let down terribly by my previous accountant, who did little more than register me for VAT, I turned to SG Accounting. Within days, I had my first meeting with Laura Hepworth, a Senior Client Director, who took me through everything step by step. Following that meeting, I was immediately contacted by various team members, gathering the necessary information and ensuring I was registered with the appropriate authorities. This highlighted just how badly my previous accountant had let me down. In no time at all, SG Accounting had everything up and running, and I was back on track with the relevant authorities. Laura and the team have been exceptional, and if I could give them a 10-star review, I would. Equally, Brandon Moody, an Accounts Associate, deserves his own 10-star review for tirelessly sorting through two years of accounts (once again, due to my previous accountant's negligence). He has patiently explained everything, chased after information, receipts, and invoices, and has been incredibly supportive throughout. If you're a contractor whose core business isn’t accounts, I highly recommend SG Accounting. They have gone above and beyond in getting my accounts sorted quickly, all for the same price I paid my previous "accountant." 5 stars all the way! read moreread less - Grace Waters 3/27/2024 I recently signed up with SG Accounting to manage the accounts for my small limited company, and am very happy with the service I've received so far. My designated account manager, Laura, has been great - very responsive to my queries via email, and thorough in our introductory call. The compliance team have also been proactive and efficient with various filing obligations, which really helps take the weight off when you're juggling multiple other things as a small business owner. I spoke with a quite a few different firms (national, local and online) before I decided to go with SG, and felt they offered the best value for money, and a more personalised service. read moreread less Lena Palmer 3/27/2024 SG Accounting provides access to FreeAgent as part of their services and the onboarding session their Accounts Consultant (Thomas A) provided was absolutely top tier. He walked me through each of the key areas step-by-step and pointed out useful information as we went. Even when I deviated the topic to some general accountancy queries linked to the FreeAgent tab we were discussing at the time, he answered my query with full knowledge & background information. He also followed up very quickly in an email a side query I had regarding VAT calculations and provided the numbers behind it. At the end of our call, not only do I feel fully comfortable with using FreeAgent, but I understood & learnt a lot more about managing my business accounts thanks to Tom. I'd also like to add that my new account director (Frances) has been wonderful with her introductory calls and answering all my self-assessment tax queries. read moreread less Andrea R 2/28/2024 I've worked with SG Accounting for various years and am thoroughly impressed. Their efficiency, professionalism, and punctuality surpass previous firms we've partnered with. Notably, Thomas and Carlotte expertly handled a critical task of reviewing all our bills submitted just 2 hours before a deadline, showcasing their ability to prioritize and execute tasks swiftly without compromising on diligence. SG Accounting consistently goes beyond our expectations, proving themselves as not just a service provider but a valuable business partner. Sarah explains information relevant to us as required and provides valuable advice as needed. Their commitment and performance are exceptional, making them highly recommendable for any business in need of reliable accounting services. read moreread less Annette Bergen 1/31/2024 Update Jan 2024: I have been with SG Accounting for almost 4 years now and would highly recommend them. They helped me with the initial process of setting up a limited company and they have done my company & personal tax returns ever since. SG Accounting are also great with ad hoc tax questions, such as my most recent query on purchasing an EV via my limited company. Olivia Stevens and Alex Gould were really helpful via phone & email and gave me all the info I needed to make an informed decision. Review from 2020: I switched to SG Accounting this year and I wish I had done it much earlier! I really feel appreciated as a client and I find them very responsive and approachable. Laura talked me through the process of setting up my own limited company and all the tax implications that come with that. The team then helped me with all the initial admin, even setting up a business bank account, which was a huge help and saved me a lot of time. I terms of day-to-day assistance, I can always email with questions and typically get a response the same day. There is a handy spreadsheet that the accounts team tally with my business bank account whenever I want, which is great. I also like their structured pricing with the different packages. I can really recommend this firm to anyone! read moreread less - Johannes 12/05/2023 I highly recommend SG Accounting. They are very professional and very helpful. Most importantly of all, they are always on time for filing returns and meeting all deadlines required. Been with them for more than a year and hope for it to stay this way for years to come. read moreread less Domagoj Lalk Vidovic 11/16/2023 SG Accounting has been taking care of my business for a year now. They are extremely professional, giving the best advice, and sending multiple reminders if needed to submit any documents. Respond to every question very fast. 11/10 read moreread less alexia fletcher 10/03/2023 I have known Rich Murray and so many of the team for about 12 years or more, before SG, and when Rich moved to SG, I moved my accounts over to them too. Everyone has always been so friendly and helpful - extremely personable and professional, they're all like a family - I cannot recommend SG Accounting enough. Nothing is a problem for anyone - fantastic communication, so responsive and flexible to my needs whether I am contracting or taking a break. Huge thanks to Alex for a really helpful discussion recently too. SG team - you are all awesome! read moreread less Shakeel Ahmad 9/12/2023 Amazing response time, a brilliant team and a really helpful account manager. What else do you need? The overall value considering the overall quality of service, including the free accounting software, is more than anywhere else. read moreread less - Chris Shearman 8/21/2023 Really excellent service and a great company to work with. They always respond to my queries promptly and helpfully. I've been contracting for about 8 years now and very happy with SG's service in that time. Thoroughly recommend. read moreread less Neil Biddlecombe 8/14/2023 A great service - have used them for years and have referred them to colleagues. read moreread less David Humphries 8/14/2023 Highly helpful and very responsive, often going above and beyond. Would very much recommend. read moreread less David Belnick 7/24/2023 I had a complex setup, with a non-trading Limited Company that was essentially mothballed for 10yrs, so when I started to take on Contract work again, I had no idea where to start. A lot of Admin was required to bring the accounts up to date, new registrations for VAT and PAYE completed and Bank and Business management taken care of with FreeAgent and Tide. SG have been absolutely brilliant, on every level, from Customer engagement, understanding the requirements, practical advice and solid delivery they have stuck with the task of bringing me back online, which has frankly saved my sanity and put me in a great position to move forward. I highly recommend their services on a personal and professional level! read moreread less - Geoffrey Beedham 3/27/2023 SG has looked after us and our company for the past 5 years. Throughout the service has been first class; an attention to detail with a friendly approach, with very reasonable fees. read moreread less Ryan Badcock 3/20/2023 SG have made my accounting very straightforward for me. They have set me up in the best way for my circumstances and manage all of my queries very efficiently. I feel as though SG have my accounts in hand very well and I do not need to worry about them. I get given clear guidance and options to make decisions with. I would and have recommended SG to friends and family. read moreread less Steve Pritchard 3/10/2023 My business was with SG Contractor Accounting for 16 years, and in all that time I've found them very helpful, and great to work with. Throroughly recommended. read moreread less Mark Riley 3/08/2023 SG Accounting have provided me with an excellent and professional service for my limited company. read moreread less - Amer Dheedan 3/08/2023 Great team and great service. I dealt with several individuals from SG Contractor Accounting, they are constantly professional, helpful,and kind. read moreread less Nick Barber 12/13/2022 I have been a very satisfied client of SG Accounting for over 20 years and am happy to give them a hearty recommendation. SG have managed my professional accounting needs in an exemplary manner throughout and I have had no issues with their work. They have always been extremely professional in their dealings with me while feeling more like friends than suppliers. Now I have retired it will be sad to lose contact with them. If you're just starting out contracting and you need an accountant, or if you're fed up with your existing accountants then give SG a call. read moreread less Marco Jean Aboav 12/12/2022 I have been with SG for more than 5 years and I can freely say that their service is top notch: professional, no delays, they always find the time with short notice when I have questions. They truly understand their customers. read moreread less Damien Stephens 12/12/2022 Exceptional service and very knowledgeable. Got me setup in no time and helped greatly with my tax and pension affairs as well. Very impressed and would highly recommend read moreread less - Tim Caldicott 10/12/2022 Having used SG for over 15 years, I thoroughly recommend them. They're very professional, efficient and have kept my company accounts (and me!) "inline". They always send timely reminders to ensure all the necessary actions are taken - very useful when running your own business. They represent very good value for money for the complete range of services they provide. If you're looking for a good accountant, look no further. read moreread less mark hew 9/12/2022 SG Accounting are a great team, always in hand to make tax related questions easy. I am 100% confident in them and would not look to go anywhere else. Thank you Sarah & Team. read moreread less Lesley Blankfield 7/12/2022 If you want a friendly, efficient and caring service from your accountant look no further. I have been a client of Stilwell Gray for almost 20 years and it has been a great relationship. They respond quickly to requests for advice and never miss a deadline. Highly recommended. read moreread less paramjeet sodhi 7/12/2022 I was them over 3 year and the are lovely bunch of people. I have used them on two occasions and always find the team helpful especially Sarah. I wish them good luck and keep the service as is. Thanks read moreread less - Sam 6/12/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Sam G 5/20/2022 I have been using SG since 2010 and they have been very helpful. They have a good team with deep knowledge and always respond quickly to any queries/issues. read moreread less Tahir Rashid 5/12/2022 SG accounting have a superb team who make the whole world of accounting seem really easy, they have great knowledge and are extremely passionate about customer support. I've used them before when I was contracting and didn't hesitate to use them again, top top team read moreread less John Butt 5/12/2022 I moved from SJD accounting to SG last year and the difference in levels of service, efficiency and professional communications is like night and day. I'm having a really great experience with SG. What a relief after years of pain! read moreread less - Mahmoud Lababidi 4/12/2022 If you're looking for an accountant who handles your affairs (from accounts to personal tax returns, yearly reports and review of financial position...etc), very professionally and with genuine trustworthiness, then SG is the one for you. Had flawless service from them for over 2 years now and I don't think I will be going anywhere else anytime soon!! read moreread less Harvey jones 4/11/2022 Amazing response rate! I started with SG as my first contactor accountants a year ago. It being my first time contracting using a Ltd company I naturally had plenty of questions to ask. SG helped guide me through every process and took almost all of the day to day accountancy out of my hands. read moreread less Elliot Herman 3/12/2021 I first started using this company back in 2009, and haven't regretted it for a second. My only regret is that I left the UK and had to close my UK Ltd company. Like everything else they've done for me over the years, they handled it swiftly and efficiently. I can't recommend them highly enough! Questions are answered quickly and fully, and often at unusual hours (in one case, I got a reply to an email at 3:30am, and when i asked him if he was working from abroad, he just explained that he couldn't sleep, so decided to do some work!). Until you've dealt with accountants in another country, you won't realise just how good SG are! I miss them so much. They're not the cheapest, but absolutely worth every penny. read moreread less Oliver Dunne 3/12/2021 I found Nadeem and his colleagues quickly respond to any questions,queries that I have had and have been very helpful. I would thoroughly recommend SG Accounting to anyone starting a business as it takes away the hassle of the bureaucracy and worries allowing more time to concentrate on other things . read moreread less - Iryna Kostiuchenko 3/12/2021 I would recommend SG as a contractor accountant. Excellent customer service and very professional. read moreread less Roland Swan 3/12/2021 I have now been with SG Accounting for 2 months and I do not regret the move. Their service so far has been prompt, clear, and accurate. Right from the first conversation with Laura I felt like I was in good hands, and Amanda has been a great support with any questions or guidance I might need as well. I would highly recommend SG Accounting to any other contractor looking for a reliable accountant. read moreread less K Bene 3/12/2021 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less Sam Lundqvist 3/12/2021 I have found SG Accounting very easy to work with, and the relationship has made managing my company efficient and straightforward. read moreread less - Paul Denson 3/12/2021 Been with them for nearly two years and they've been professional, helpful and accurate. Thumbs up. read moreread less Maria Ball 3/12/2021 I found this accountant by chance when doing a Google search for more local contractor accountants, who also provide FreeAgent access. What a find! They may not have been as local as I was originally looking for, but their good reviews and impressive website were enough to tempt me to give them a call. Right from the very first contact with them, I have been nothing but impressed with their helpfulness and professionalism. We were assigned Laura to be our main contact. We had an initial Zoom video meeting with her, and any further questions have been dealt with really quickly by email. I've found Laura to be friendly, professional, knowledgeable, helpful and efficient. Nothing seems too much trouble, and I'm left feeling really confident that all of our accounting needs will be taken care of in the best possible way. We previously used a different contractor accountant for 8 years, and immediately after starting to use SG Accounting, it became apparent just how little help and support my previous accountant gave us over the years. They always used to make me feel like it was an inconvenience if I phoned them, and every service used to incur an extra add-on charge, such as incorporating a new company, having access to FreeAgent, using their business address, etc. Using SG Accounting has been like a breath of fresh air. There's a great support team, who all seem to be helpful and good at what they do. Everything we need is included in a set monthly price, so no hidden extras. All those things I used to pay extra for, and more, are now part of our package. It even includes a really good level of business insurance, so it works out cheaper than having to buy separate cover. All in all, a great success. I'm really glad to have found SG Accounting, and would wholeheartedly recommend them to anyone. And no, I haven't been paid for leaving this review, or been given any discounts with them. I just think this great business deserves recognition, and I wanted to share what my user experience has been like. read moreread less Konstantin K 3/12/2021 I have been working with SG for a few years now and I must say that they have proved themselves to be very professional and reliable. Laura is always very quick to respond to any request. Highly recommended! read moreread less internetoutcome 3/12/2021 Couldn’t recommend SG highly enough. They made my SE tax return process so easy and it was done in no time at all. Top marks. read moreread less - Hugh Davey 3/12/2021 Good contractor accountant. You get a personal point of contact and an easy smart spreadsheet which you can use to track your business ins and outs, calculating what you can spend. Laura has always been very friendly, helpful and quick to reply to any questions even small ones, and the accounts team in general have been the same read moreread less K B 5/15/2020 I consider myself lucky to have come across SG Accounting by sheer chance. I was looking for a contractor in my area which is Reading and I looked on FreeAgent's website and I accidentally clicked on SG's contact details - who are definitely not even near Reading - and that's how I came into contact with them. They were so welcoming during the first conversation that I have decided to go with them and I am very pleased I did. Every person I have been in contact with so far have been wonderful and they all offer impeccable service. This is a rare treasure in today's world and if it was up to me I would set this as the gold standard for all companies and I'd refuse to do business with anyone not hitting this standard. I fear 90% of companies would not live up to this expectation... If all - or at least more companies operated like SG, the world would be a much more pleasant place. This is my genuine, unsolicited opinion and I can only wish to find service providers half this good in other walks of life as well. I am looking forward to continue working with the SG team. read moreread less andydmead 3/12/2020 I've recently signed up with SG Accounting and have to say their on-boarding, their explanation of what is required and how and when things need to happen has been superb. They have ensured we have had both a telcon and met face to face and I feel confident I am in very safe hands. read moreread less John Begley 3/12/2020 SG have looked after me for 22 years and have been so reliable and professional. Queries answered promptly, tricky problems resolved intelligently and with real care and a personal touch. I have no hesitation or doubt in recommending them to anyone. read moreread less - Jon L 3/12/2020 I've been with SG for about 22 years now, I initially dealt with Sarah and Richard directly, but SG have grown a lot in recent times. I have recommended them to many colleagues and they remain good value, offering a timely, personal service. read moreread less Derren Cooke 3/12/2020 I have been using SG contractor accounting for about 10 years now, I don't feel the need to go anywhere else as I always get great service and advice when needed. Even though I have seen the company grow they haven't lost that personal touch. They are very efficient in what they do which let's me get on with what I am good at. I am hoping for many more years of top quality service from them. I can highly recommend. read moreread less Paul R 3/12/2020 I've been working with the SG Accounting team for a few years now. I was new to contracting & was quite daunted initially. Richard Murray was my initial point of contact and helped set up my business. Richard is very good at explaining things in a simple way. Their accountancy process is simple, and support for any queries is dealt with promptly.. I would personally recommend SG and Rich Murray, he's a very adept and professional. I look forward to continuing to work with you all. Thanks to the rest of the team. read moreread less Riccardo Reato 3/12/2020 Just started 2 months ago my work relationship with SG accounting. The setup of my business has been very quick and smooth, communication has been great, and SG professionals are very knowledgeable and helpful! Really happy of my choice, and would recommend SG to anyone looking for a reliable accountancy partner. read moreread less - Nadine Appiah 3/12/2020 I have recently joined the contracting world and was referred by a colleague to SG Accounting. My experience to date has been effortless. From the very introductory phone call to the team in Hampshire and meeting Laura (my personal accountant) in London. All my worries were taken care off. SG took control of the full set up and promptly responded all emails. I will most definitely refer SG to any contractor looking for a 1st class front to back service. I cannot thank you enough. read moreread less Labinot Z 3/12/2020 SG Accounting have been great at helping me setup and have managed my books continuously for me. Nadeem is my head accountant and hes been very thorough and transparent with me. Great Company. read moreread less Guy Hanson 3/12/2020 The team at SG are very helpful and knowledgeable. From the outset, they have covered all of my company financial requirements and have assisted with personal tax too. SG was recommended to me and I can do the same. read moreread less Steve Mcfarlane 3/12/2020 SG have been efficient, proactive and responsive in the 2 years that I have used them as my company accountancy service. My questions are always answered in a timely manner and the team I deal with are always courteous and professional in their communications. read moreread less - Keith Humphreys 3/12/2020 Found these guys on the internet after I'd heard some bad press about SJD. I first dealt with Dan Mepham who took me through the on-boarding process and from there on the service has always been top class. Everything I've asked them to do, they've done, from switching VAT schemes to migrating onto Freeagent. Highly recommended!!! read moreread less Harpender Singh 3/12/2020 I was referred by my family to SG and they are the best. I am glad I switched over. I am on the top package which works nicely for me with less to do. read moreread less Steve Cliff 3/12/2020 I have been with SG since starting contracting in 1996 and was impressed from the start when Richard Stilwell travelled to Warrington from Winchester to introduce himself and the company. SG have always delivered excellent service and I would not hesitate to recommend them to others. read moreread less Andrew Faiers 3/12/2020 I have been using SG Accountants for over 2 years and from the first introductory meeting with Dan the service has been excellent. I have been really impressed with the professional, helpful and friendly approach made by all members of the team. All questions and queries have always been dealt with promptly, often on the same day which highlights their positive approach to clients. I will not be looking elsewhere! read moreread less --- ### [SG Accounting Signup Form](https://sg-accounting.co.uk/sg-accounting-signup-form/) **Published:** April 17, 2020 **Author:** Janet Bower **Content:** # Sign up now for the best accounting service you can ask for At SG Accounting, we like to keep things simple so you can sign up for our Sole Trader, Limited Company or Self Assessment Tax Return services online. Simply select which service you need, choose your extras and hit submit. We’ll then get in touch to confirm that we’ve received your form and explain the next steps. Sign up for: [ Sole Trader services](#q2) [ Limited Company services](#q2) [ Personal Tax Services](#q2) ## Sign up for SG Accounting Sole Trader Services Step 1 of 6 16% ### Sole Trader Services - £49 per month +VAT - Set-up or Switch Service Set-up: We’ll register you with HMRC for your Self Assessment Tax return and any other taxes required. Switch: we’ll get your records from your existing accountant. - FCSA accreditation - One Self Assessment Tax Return We will prepare, send for approval and submit the Personal Self Assessment Tax Return (SA100) to HMRC. One simple tax return included (including salary, dividends and one rental property if needed). Additional fees may apply for more complex returns - Sole Trader Accounts Year-end income and expenditure accounts. - FreeAgent software or spreadsheet option Our simple to use bookkeeping spreadsheet is all most sole traders will need. If you would prefer an online portal, we can include FreeAgent at no extra cost. - Free financial reviews & wealth management advice Our contractor and small business specialist partner financial advisors are happy to advise you on pensions, mortgages, investments and life cover. - £100 reward for every new client you refer As a client, you simply tell your friend or colleague to mention your name when they enquire and we’ll credit £100 to your account with us once they’ve been on board for 6 weeks. It’s as simple as that, and you can refer as many people as you like – you’ll get £100 for each and every one. - Preferential rates for small business, personal, crypto and buy to let accounting and tax Our sister company Vantage Accounting specialises in small business, personal and buy-to-let accounting. Our contractor clients can therefore benefit from discounted rates plus a more holistic approach to their finances. - References We can provide standard format income references for mortgages, tenancy, student loan purposes etc. - Video Calls Chat to your Client Director via Zoom or Teams – all part of the service. Got a FreeAgent account already? Please give us your URL here: ### Extras Select any added extras now, or we can discuss your specific needs as part of your welcome call. Fee protection cover Fee Protection Cover: £10.00 + VAT per month (free for your first 3 months) Payroll Payroll - per employee: £10.00 + VAT per month per employee, to advise on salary levels and RTI submissions Number of employees: VAT Submissions VAT submissions: £15 + VAT per month Not sure? Need to speak to us? No problem – just call us on 01962 896968 Next ### Business Details Business name Business Activity(Required) Trading From Date Trading Address(Required) Street Address Address Line 2 City County Postcode Country AfghanistanÅland IslandsAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua and BarbudaArgentinaArmeniaArubaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBonaire, Sint Eustatius and SabaBosnia and HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandCocos IslandsColombiaComorosCongoCongo, Democratic Republic of theCook IslandsCosta RicaCôte d'IvoireCroatiaCubaCuraçaoCyprusCzechiaDenmarkDjiboutiDominicaDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEswatiniEthiopiaFalkland IslandsFaroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern TerritoriesGabonGambiaGeorgiaGermanyGhanaGibraltarGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-BissauGuyanaHaitiHeard Island and McDonald IslandsHoly SeeHondurasHong KongHungaryIcelandIndiaIndonesiaIranIraqIrelandIsle of ManIsraelItalyJamaicaJapanJerseyJordanKazakhstanKenyaKiribatiKorea, Democratic People's Republic ofKorea, Republic ofKuwaitKyrgyzstanLao People's Democratic RepublicLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacaoMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorth MacedoniaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestine, State ofPanamaPapua New GuineaParaguayPeruPhilippinesPitcairnPolandPortugalPuerto RicoQatarRéunionRomaniaRussian FederationRwandaSaint BarthélemySaint Helena, Ascension and Tristan da CunhaSaint Kitts and NevisSaint LuciaSaint MartinSaint Pierre and MiquelonSaint Vincent and the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia and the South Sandwich IslandsSouth SudanSpainSri LankaSudanSurinameSvalbard and Jan MayenSwedenSwitzerlandSyria Arab RepublicTaiwanTajikistanTanzania, the United Republic ofThailandTimor-LesteTogoTokelauTongaTrinidad and TobagoTunisiaTürkiyeTurkmenistanTurks and Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUS Minor Outlying IslandsUzbekistanVanuatuVenezuelaViet NamVirgin Islands, BritishVirgin Islands, U.S.Wallis and FutunaWestern SaharaYemenZambiaZimbabwe Previous Next ### Personal Details Name(Required) Title Dr.MissMr.Mrs.Ms.Mx.Prof.Rev. First Middle Last Preferred name (if different to First name) Home Address(Required) Street Address Address Line 2 City County Postcode Country AfghanistanÅland IslandsAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua and BarbudaArgentinaArmeniaArubaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBonaire, Sint Eustatius and SabaBosnia and HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandCocos IslandsColombiaComorosCongoCongo, Democratic Republic of theCook IslandsCosta RicaCôte d'IvoireCroatiaCubaCuraçaoCyprusCzechiaDenmarkDjiboutiDominicaDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEswatiniEthiopiaFalkland IslandsFaroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern TerritoriesGabonGambiaGeorgiaGermanyGhanaGibraltarGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-BissauGuyanaHaitiHeard Island and McDonald IslandsHoly SeeHondurasHong KongHungaryIcelandIndiaIndonesiaIranIraqIrelandIsle of ManIsraelItalyJamaicaJapanJerseyJordanKazakhstanKenyaKiribatiKorea, Democratic People's Republic ofKorea, Republic ofKuwaitKyrgyzstanLao People's Democratic RepublicLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacaoMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorth MacedoniaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestine, State ofPanamaPapua New GuineaParaguayPeruPhilippinesPitcairnPolandPortugalPuerto RicoQatarRéunionRomaniaRussian FederationRwandaSaint BarthélemySaint Helena, Ascension and Tristan da CunhaSaint Kitts and NevisSaint LuciaSaint MartinSaint Pierre and MiquelonSaint Vincent and the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia and the South Sandwich IslandsSouth SudanSpainSri LankaSudanSurinameSvalbard and Jan MayenSwedenSwitzerlandSyria Arab RepublicTaiwanTajikistanTanzania, the United Republic ofThailandTimor-LesteTogoTokelauTongaTrinidad and TobagoTunisiaTürkiyeTurkmenistanTurks and Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUS Minor Outlying IslandsUzbekistanVanuatuVenezuelaViet NamVirgin Islands, BritishVirgin Islands, U.S.Wallis and FutunaWestern SaharaYemenZambiaZimbabwe Mobile Number(Required) Home Number Email Address(Required) Date of Birth(Required) National Insurance Number Age You need to be over 18 to submit this form Unique Tax Ref Previous Next Add additional person? Add additional person connected to the company? (leave unchecked if none) ### Additional Person Details Name(Required) Title Dr.MissMr.Mrs.Ms.Mx.Prof.Rev. First Middle Last Preferred name (if different to First name) Address(Required) Street Address Address Line 2 City County Postcode Country AfghanistanÅland IslandsAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua and BarbudaArgentinaArmeniaArubaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBonaire, Sint Eustatius and SabaBosnia and HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandCocos IslandsColombiaComorosCongoCongo, Democratic Republic of theCook IslandsCosta RicaCôte d'IvoireCroatiaCubaCuraçaoCyprusCzechiaDenmarkDjiboutiDominicaDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEswatiniEthiopiaFalkland IslandsFaroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern TerritoriesGabonGambiaGeorgiaGermanyGhanaGibraltarGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-BissauGuyanaHaitiHeard Island and McDonald IslandsHoly SeeHondurasHong KongHungaryIcelandIndiaIndonesiaIranIraqIrelandIsle of ManIsraelItalyJamaicaJapanJerseyJordanKazakhstanKenyaKiribatiKorea, Democratic People's Republic ofKorea, Republic ofKuwaitKyrgyzstanLao People's Democratic RepublicLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacaoMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorth MacedoniaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestine, State ofPanamaPapua New GuineaParaguayPeruPhilippinesPitcairnPolandPortugalPuerto RicoQatarRéunionRomaniaRussian FederationRwandaSaint BarthélemySaint Helena, Ascension and Tristan da CunhaSaint Kitts and NevisSaint LuciaSaint MartinSaint Pierre and MiquelonSaint Vincent and the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia and the South Sandwich IslandsSouth SudanSpainSri LankaSudanSurinameSvalbard and Jan MayenSwedenSwitzerlandSyria Arab RepublicTaiwanTajikistanTanzania, the United Republic ofThailandTimor-LesteTogoTokelauTongaTrinidad and TobagoTunisiaTürkiyeTurkmenistanTurks and Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUS Minor Outlying IslandsUzbekistanVanuatuVenezuelaViet NamVirgin Islands, BritishVirgin Islands, U.S.Wallis and FutunaWestern SaharaYemenZambiaZimbabwe Mobile Number(Required) Home Number Email(Required) Date of Birth(Required) National Insurance Number Unique Tax Ref Previous Next Existing Accountant? Do you have a current accountant? (leave unchecked if none) ### Existing Accountant? Please provide the details below if you have an existing accountant, we will then contact them for professional clearance and to provide any handover information. Firm Name(Required) Contact(Required) Email Address(Required) Phone Number(Required) Previous Next Form complete? Click submit at the bottom to become a signed-up member of the SG family. Client copy Receive a copy of this to your email address? {all_fields:value,exclude[25,34,69,71,73,74,75,76,77,78]} Previous Submit ## Sign up for SG Accounting Limited Company Services Step 1 of 6 16% ### Limited Company Services - £59.50 +VAT per month for the first 3 months, then £119 per month +VAT - Award winning accounting service - Set-up or Switch Service Set-up: Company incorporation, Tax registration. Switch: We get your records from existing accountant, We inform Companies House and HMRC - FCSA accreditation - Dedicated Client Director You’ll get one main point of contact with your senior (Director level) accountant and you can call them whenever you like – no charge for advice. - Registered office address We do not charge any additional fees if you would like to use our office as your Company's Registered Office address and Director's service address. This will keep your personal address details off the public record. - FreeAgent software or spreadsheet option Our simple to use bookkeeping spreadsheet is all most contractors and small businesses will need. If you would prefer an online portal, we can include FreeAgent at no extra cost. - HMRC and Companies House submissions We can advise on all of the statutory obligations for your business, including: • VAT filing • Accounts • CT600 and computation • Annual confirmation statement. All HMRC and Companies House submissions will be prepared based on your records and presented to you for approval - Payroll for one employee We can deal with the payroll obligations for a Director or employee of the Limited Company. - Free financial reviews & wealth management advice Our contractor and small business specialist partner financial advisors are happy to advise you on pensions, mortgages, investments and life cover. - £100 reward for every new client you refer As a client, you simply tell your friend or colleague to mention your name when they enquire and we’ll credit £100 to your account with us once they’ve been on board for 6 weeks. It’s as simple as that, and you can refer as many people as you like – you’ll get £100 for each and every one. - Preferential rates for small business, crypto, personal and buy to let accounting Our sister company Vantage Accounting specialises in small business, personal and buy-to-let accounting. Our contractor clients can therefore benefit from discounted rates plus a more holistic approach to their finances. - One Self Assessment Tax Return We can prepare, send for approval and submit the Director's Personal Self Assessment Tax Return (SA100) to HMRC. One simple tax return included (including salary, dividends and one rental property if needed). Additional fees may apply for more complex returns - References We can provide standard format income references for mortgages, tenancy, student loan purposes etc. - Video Calls Chat to your Client Director via Zoom or Teams – all part of the service. Got a FreeAgent account already? Please give us your URL here: ### Extras Select any added extras now, or we can discuss your specific needs as part of your welcome call. Fee Protection Cover Fee Protection Cover: Free for 3 months, then £14.50 +VAT per month Payroll for an additional employee Payroll for an additional employee: £10.00 +VAT per month Number of additional employees 2nd Self Assessment Tax Return 2nd Self Assessment Tax Return: From £24 +VAT per month Management Accounts Monthly Management Accounts: £40 +VAT per month Bookkeeping Bookkeeping: From £40 +VAT per month Not sure? Need to speak to us? No problem – just call us on 01962 896968 Next ### Need us to set up (incorporate) your company for you? Need us to set up / incorporate your company for you?(Required) Yes No ### No Current Company Name(Required) Company Number(Required) ### Yes Chosen Limited Company name:(Required) Fast-track incorporation service Fast-track incorporation service - £150+VAT ### Business Details Business Activity(Required) Trading Address(Required) Street Address Address Line 2 City County Postcode Country AfghanistanÅland IslandsAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua and BarbudaArgentinaArmeniaArubaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBonaire, Sint Eustatius and SabaBosnia and HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandCocos IslandsColombiaComorosCongoCongo, Democratic Republic of theCook IslandsCosta RicaCôte d'IvoireCroatiaCubaCuraçaoCyprusCzechiaDenmarkDjiboutiDominicaDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEswatiniEthiopiaFalkland IslandsFaroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern TerritoriesGabonGambiaGeorgiaGermanyGhanaGibraltarGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-BissauGuyanaHaitiHeard Island and McDonald IslandsHoly SeeHondurasHong KongHungaryIcelandIndiaIndonesiaIranIraqIrelandIsle of ManIsraelItalyJamaicaJapanJerseyJordanKazakhstanKenyaKiribatiKorea, Democratic People's Republic ofKorea, Republic ofKuwaitKyrgyzstanLao People's Democratic RepublicLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacaoMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorth MacedoniaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestine, State ofPanamaPapua New GuineaParaguayPeruPhilippinesPitcairnPolandPortugalPuerto RicoQatarRéunionRomaniaRussian FederationRwandaSaint BarthélemySaint Helena, Ascension and Tristan da CunhaSaint Kitts and NevisSaint LuciaSaint MartinSaint Pierre and MiquelonSaint Vincent and the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia and the South Sandwich IslandsSouth SudanSpainSri LankaSudanSurinameSvalbard and Jan MayenSwedenSwitzerlandSyria Arab RepublicTaiwanTajikistanTanzania, the United Republic ofThailandTimor-LesteTogoTokelauTongaTrinidad and TobagoTunisiaTürkiyeTurkmenistanTurks and Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUS Minor Outlying IslandsUzbekistanVanuatuVenezuelaViet NamVirgin Islands, BritishVirgin Islands, U.S.Wallis and FutunaWestern SaharaYemenZambiaZimbabwe Do you require VAT registration?(Required) Yes No Don't know Do you require Flat Rate VAT registration?(Required) Yes No Don't know Previous Next ### Personal Details Name(Required) Title Dr.MissMr.Mrs.Ms.Mx.Prof.Rev. First Middle Last Preferred name (if different from First name) Home Address Street Address Address Line 2 City County Postcode Country AfghanistanÅland IslandsAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua and BarbudaArgentinaArmeniaArubaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBonaire, Sint Eustatius and SabaBosnia and HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandCocos IslandsColombiaComorosCongoCongo, Democratic Republic of theCook IslandsCosta RicaCôte d'IvoireCroatiaCubaCuraçaoCyprusCzechiaDenmarkDjiboutiDominicaDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEswatiniEthiopiaFalkland IslandsFaroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern TerritoriesGabonGambiaGeorgiaGermanyGhanaGibraltarGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-BissauGuyanaHaitiHeard Island and McDonald IslandsHoly SeeHondurasHong KongHungaryIcelandIndiaIndonesiaIranIraqIrelandIsle of ManIsraelItalyJamaicaJapanJerseyJordanKazakhstanKenyaKiribatiKorea, Democratic People's Republic ofKorea, Republic ofKuwaitKyrgyzstanLao People's Democratic RepublicLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacaoMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorth MacedoniaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestine, State ofPanamaPapua New GuineaParaguayPeruPhilippinesPitcairnPolandPortugalPuerto RicoQatarRéunionRomaniaRussian FederationRwandaSaint BarthélemySaint Helena, Ascension and Tristan da CunhaSaint Kitts and NevisSaint LuciaSaint MartinSaint Pierre and MiquelonSaint Vincent and the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia and the South Sandwich IslandsSouth SudanSpainSri LankaSudanSurinameSvalbard and Jan MayenSwedenSwitzerlandSyria Arab RepublicTaiwanTajikistanTanzania, the United Republic ofThailandTimor-LesteTogoTokelauTongaTrinidad and TobagoTunisiaTürkiyeTurkmenistanTurks and Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUS Minor Outlying IslandsUzbekistanVanuatuVenezuelaViet NamVirgin Islands, BritishVirgin Islands, U.S.Wallis and FutunaWestern SaharaYemenZambiaZimbabwe Mobile Number(Required) Home Number Email Address(Required) Date of Birth(Required) % shareholding National Insurance Number You need to be over 18 to submit this form Personal Unique Tax Ref Previous Next Add additional person? Add additional person(s) connected to the company? (leave unchecked if none) ### Additional Person Details Additional Person Details | Name | Address | Mobile number | Home number | Email | Date of birth | % shareholding | National Insurance Number | Unique Tax Ref | Actions | |---|---|---|---|---|---|---|---|---|---| | | | | | | | | | | - Edit - Delete | | There are no People. | Add Person Maximum number of people reached. Previous Next ### Accountant Details Existing accountant? Do you have a current accountant? (leave unchecked if none) Firm Name(Required) Contact(Required) Email Address(Required) Phone Number(Required) Previous Next Form complete? Click submit at the bottom to become a signed-up member of the SG family. Client copy Receive a copy of this to your email address? ### Submit {all_fields:value,exclude[25,78,82,84,98,99,103,112,113,114,115,116,117]} Previous Submit ## Sign up for SG Accounting Personal Tax Services ### Personal Tax Return Sign up for a Self Assessment Tax Return (SA100) - Easy to complete form to send us your details - We complete your tax return and send for your approval - On approval, we submit your return to HMRC - Pay monthly or one-off - Prices for a simple tax return (salary, dividends and interest) - More complex returns may incur additional charges. Please call for a quote on 01962 896968 Personal Tax Return options From £24+VAT per month OR From £295+VAT one-off payment ### Personal Details Name(Required) Dr.MissMr.Mrs.Ms.Mx.Prof.Rev. 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(leave unchecked if not) ### Current Accountant Firm Name(Required) Contact(Required) Email(Required) Phone(Required) Client copy Receive a copy of this to your email address? Submit --- ### [SG Contractor Accounting - Promotional Offer Terms and Conditions](https://sg-accounting.co.uk/sg-contractor-accounting-promotional-offer-terms-and-conditions/) **Published:** February 6, 2023 **Author:** Dan Mepham **Content:** **SG Accounting – Promotional Offer Terms and Conditions** 1. To be eligible to receive the SG Accounting (ACCOUNTING) promotional offer (the “Offer”), applicants must first successfully open a sole trader or limited company business current account with Tide. Account opening [eligibility criteria](https://www.tide.co/faq/who-can-open-a-tide-account/) and customary [know your customer checks](https://www.tide.co/blog/tide-update/what-is-kyc/) apply. 2. The Offer includes: 1. 3 months half price, 3 months free fee protection insurance and no catch up fee for switchers within current trading year – this is subject to Minimum Deposit requirements (see para. 6 below); and 2. one year of free transfers to any UK accounts (see para. 9 below). 3. The Offer is only valid for new accounts and applicants who haven’t previously opened an account with Tide. 4. The Offer is only valid for account applications submitted on and after 13th February 2023. 5. To activate the Offer, the applicant must use the referral code: ACCOUNTING. The applicant is required to either enter the referral code while applying for a Tide account via the Tide mobile app or the Tide website ([https://web.tide.co/sign-up/](https://go.onelink.me/IS48?af_click_lookback=30d&pid=direct&af_sub1=8a3ccab9-c37c-4c8f-88bf-e9ba9475b5cc&af_web_dp=https%3A%2F%2Fweb.tide.co%2Fsign-up)) or simply let Tide know through the in-app chat within 1 week of successfully opening the account (e.g. if an applicant successfully opens a new Tide account on Monday, the applicant will have until and including the following Monday to give Tide the referral code via the in-app chat). 6. The Offer is limited to 3 months half price, 3 months free fee protection insurance and no catch up fee for switchers. To receive the reward, the applicant must credit the account with a minimum of £100 (‘minimum balance’) within three months of the account opening date. 7. The applicant must use the same email address associated with their SG Accounting subscription to set up their Tide account. Otherwise the reward may not be issued. 8. It can take up to 8 weeks from the date the applicant credits the account with the Minimum Balance for the SG Accounting offer to be applied. 9. It can take up to 8 weeks from the date the applicant credits the account with the Minimum Balance for the free transfers to be applied to the Tide members account. 10. We reserve the right to modify these terms and conditions or withdraw this Offer at any time. 11. This Offer cannot be used in conjunction with any other Tide or SG Accounting offer or promotion. 12. For enquiries relating to this offer – contact SG Accounting on 01962 867550 or email newbusiness@sg-accounting.co.uk --- ### [Our Blog](https://sg-accounting.co.uk/blog/) **Published:** August 5, 2015 **Author:** Dan Mepham **Content:** # Our Blog [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) - [ ![SG Accounting logo on the left with a framed award on the right reading ‘The Contracting Awards 2026’ and ‘Winner – Best Contractor Accountancy.’](https://sg-accounting.co.uk/wp-content/uploads/2026/10/SG-Contracting-awards-2026-winner-blog-banner.jpg "SG Accounting Wins Best Contractor Accountancy at The Contracting Awards 2026 | SG Accounting") ](https://sg-accounting.co.uk/blog/sg-accounting-wins-best-contractor-accountancy-at-the-contracting-awards-2026/) ## [SG Accounting wins Best Contractor Accountancy at the Contracting Awards 2026](https://sg-accounting.co.uk/blog/sg-accounting-wins-best-contractor-accountancy-at-the-contracting-awards-2026/) [Jen Winslow](https://sg-accounting.co.uk/blog/author/jen/)2026-10-01T11:05:50+01:00October 1st, 2026\| We're proud to be named Best Contractor Accountancy 2026 We’re delighted to announce that SG Accounting has been named Best Contractor Accountancy (1,000–3,000 Clients) at The Contracting Awards 2026! This award recognises our commitment to delivering expert contractor accountancy, \[...\] [Read More](https://sg-accounting.co.uk/blog/sg-accounting-wins-best-contractor-accountancy-at-the-contracting-awards-2026/) - [ ![Cryptocurrency tax compliance concept showing digital coins, transaction data and HMRC correspondence, representing increased crypto reporting requirements, HMRC's 81,000 warning letters, and the partnership between SG Accounting and Recap helping investors stay compliant with UK crypto tax obligations.](https://sg-accounting.co.uk/wp-content/uploads/2026/09/shutterstock_1950435487-1.jpg "81,000 HMRC Letters: What Crypto Investors Need to Know | SG Accounting") ](https://sg-accounting.co.uk/blog/81000-hmrc-letters-crypto-tax-has-entered-a-new-phase/) ## [81,000 HMRC Letters: Crypto tax has entered a new phase](https://sg-accounting.co.uk/blog/81000-hmrc-letters-crypto-tax-has-entered-a-new-phase/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-09-25T10:27:02+01:00September 16th, 2026\| If you thought crypto tax was something HMRC wasn't paying much attention to, recent events are suggesting otherwise. As reported recently by the BBC, HMRC sent 81,000 warning letters to people they believe have crypto-related tax obligations. Their message is \[...\] [Read More](https://sg-accounting.co.uk/blog/81000-hmrc-letters-crypto-tax-has-entered-a-new-phase/) - [ ![Director reviewing their Director’s Loan Account and company records, assessing loan withdrawals, repayments, and HMRC tax implications.](https://sg-accounting.co.uk/wp-content/uploads/2026/07/pexels-pabda-5277958.jpg "Director’s Loan Account – Guide for Limited Company Directors | SG Accounting") ](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) ## [Director’s loans explained: The complete guide for limited company directors](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) [Alex Gould](https://sg-accounting.co.uk/blog/author/alex/)2026-08-28T14:55:09+01:00August 26th, 2026\| Director’s Loans are still one of the most underused and misunderstood areas of running a limited company. Whether, as a limited company director you’re navigating unexpected personal expenses, managing your cash flow, or just trying to remain compliant, it’s \[...\] [Read More](https://sg-accounting.co.uk/blog/directors-loans-explained-the-complete-guide-for-limited-company-directors/) - [ ![Director reviewing pension contribution options and allowable business expenses to reduce taxable profits and Corporation Tax.](https://sg-accounting.co.uk/wp-content/uploads/2026/07/Picture1.jpg "Are Director Pension Contributions an Allowable Business Expense? | SG Accounting") ](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) ## [Are pension contributions an allowable business expense for directors?](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) [Niamh Potter](https://sg-accounting.co.uk/blog/author/niamh-potter/)2026-09-28T14:57:50+01:00August 26th, 2026\| Pension contributions are often one of the most tax-efficient expenses a limited company can pay on behalf of its directors. However, many business owners are unsure whether pension contributions qualify as an allowable business expense and how the tax relief \[...\] [Read More](https://sg-accounting.co.uk/blog/are-pension-contributions-an-allowable-business-expense-for-directors/) - [ ![Business owner reviewing VAT scheme options — Standard VAT, Cash Accounting, Flat Rate Scheme and Annual Accounting — to improve cash flow and tax efficiency.](https://sg-accounting.co.uk/wp-content/uploads/2026/07/f4d2775f-de65-6a68-7a30-ba6728aaa356.jpg "VAT Scheme Options for Small Businesses | SG Accounting") ](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) ## [VAT Schemes: Which one is right for your business?](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) [Frances Bridge](https://sg-accounting.co.uk/blog/author/frances-bridge/)2026-09-23T14:53:06+01:00August 26th, 2026\| It’s important to ensure your business is using the correct VAT scheme, as it directly affects your cash flow, admin workload, and overall tax efficiency. So, whether you’re approaching the VAT limit or you’re already registered, it’s important to \[...\] [Read More](https://sg-accounting.co.uk/blog/vat-schemes-which-one-is-right-for-your-business/) - [ ![Employees celebrating with champagne at a corporate party](https://sg-accounting.co.uk/wp-content/uploads/2026/06/Employees-celebrating.jpg "ToastChampagneInHandsAndGlassesToCelebrateAndBusiness | SG Accounting") ](https://sg-accounting.co.uk/blog/can-contractors-claim-client-entertaining-and-staff-entertainment-expenses/) ## [Can Contractors Claim Client Entertaining and Staff Entertainment Expenses](https://sg-accounting.co.uk/blog/can-contractors-claim-client-entertaining-and-staff-entertainment-expenses/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-09-28T15:38:11+01:00August 19th, 2026\| Entertainment expenses are one of the most misunderstood areas of tax for limited company directors. Many contractors assume that if an expense is business-related, it must be tax deductible. However, HMRC applies different rules depending on who receives the \[...\] [Read More](https://sg-accounting.co.uk/blog/can-contractors-claim-client-entertaining-and-staff-entertainment-expenses/) - [ ![SG Accounting graphic announcing its 2026 Contracting Awards finalist nomination for Best Contractor Accountancy in the 1,000–3,000 clients category.](https://sg-accounting.co.uk/wp-content/uploads/2026/07/SG-finalist-shortlist-announcement-2026-1.jpg "SG Accounting named a finalist in the 2026 Contracting Awards for Best Contractor Accountancy. | SG Accounting") ](https://sg-accounting.co.uk/blog/sg-accounting-announced-as-a-finalist-in-this-years-contracting-awards/) ## [SG Accounting announced as a finalist in this year’s Contracting Awards](https://sg-accounting.co.uk/blog/sg-accounting-announced-as-a-finalist-in-this-years-contracting-awards/) [Jen Winslow](https://sg-accounting.co.uk/blog/author/jen/)2026-07-09T15:57:27+01:00July 9th, 2026\| SG Accounting has been announced as a finalist in this year's Contracting Awards in the Best Contractor Accountancy (1,000 – 3,000 clients) category. We’re so pleased that our commitment to delivery nothing but the highest level of quality, compliance \[...\] [Read More](https://sg-accounting.co.uk/blog/sg-accounting-announced-as-a-finalist-in-this-years-contracting-awards/) - [ ![Contractor shaking end client's hand](https://sg-accounting.co.uk/wp-content/uploads/2025/12/happy-male-candidate-shaking-hands-with-members-human-resource-team-job-interview-office-e1766399960329.jpg "Contractor shaking end client's hand | SG Accounting") ](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) ## [Why Clients Default to Inside IR35 (and What This Means for Contractors)](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-10-06T13:37:15+01:00June 30th, 2026\| If you’ve ever had a contract assessed as inside IR35 and felt frustrated or powerless, you’re not alone. Many contractors find that roles which should fall outside IR35 are classified inside - sometimes because the client simply doesn’t want \[...\] [Read More](https://sg-accounting.co.uk/blog/why-clients-default-to-inside-ir35-and-what-this-means-for-contractors/) - [ ![Contractor talking on mobile phone outside office building](https://sg-accounting.co.uk/wp-content/uploads/2025/12/businesswoman-talking-mobile-phone.jpg "Contractor talking on mobile phone outside office building | SG Accounting") ](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/) ## [Moving Between Inside and Outside IR35](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-09-28T15:48:30+01:00June 30th, 2026\| Since the IR35 reforms in 2021, contracting has changed for good. Many professionals now move between inside and outside IR35 roles depending on the client, the project, or market conditions. If you’ve found yourself switching between the two, you’re \[...\] [Read More](https://sg-accounting.co.uk/blog/moving-between-inside-and-outside-ir35/) - [ ![Contractors working inside IR35 in an office](https://sg-accounting.co.uk/wp-content/uploads/2025/12/office-workspace-6952950_1920.jpg "Contractors working inside IR35 in an office | SG Accounting") ](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/) ## [Limited Company vs Inside IR35 – What Actually Changes?](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-09-28T15:56:44+01:00June 30th, 2026\| IR35 doesn’t stop you from contracting - it simply changes how you operate. When a role is outside IR35, you trade as an independent business through your Limited Company. When it’s inside IR35, the client or agency treats the \[...\] [Read More](https://sg-accounting.co.uk/blog/limited-company-vs-inside-ir35-what-actually-changes/) - [ ![Contractor agreeing to a contract after discussing IR35 status with end client](https://sg-accounting.co.uk/wp-content/uploads/2025/12/happy-manager-handshaking-with-candidate-after-successful-job-interview-office.jpg "Contractor agreeing to a contract after discussing IR35 status with end client | SG Accounting") ](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) ## [How to Tell if You Are Inside or Outside IR35](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-07-02T11:47:37+01:00June 30th, 2026\| Understanding whether you’re inside or outside IR35 isn’t about memorising tax law - it’s about recognising how your working relationship actually looks in practice. HMRC focuses on what you do day to day, not what your contract says on \[...\] [Read More](https://sg-accounting.co.uk/blog/how-to-tell-if-you-are-inside-or-outside-ir35/) - [ ![A contractor getting an opinion from an expert on the IR35 position of a contract](https://sg-accounting.co.uk/wp-content/uploads/2025/12/productive-working-meeting.jpg "A contractor getting an opinion from an expert on the IR35 position of a contract | SG Accounting") ](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) ## [How to Protect Your IR35 Position Before a Contract Starts](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-10-06T13:27:23+01:00June 30th, 2026\| Once a contract has begun, most of the factors that decide IR35 status are already in place. That’s why the best time to protect your position is before you sign. The end client carries the tax liability if an \[...\] [Read More](https://sg-accounting.co.uk/blog/how-to-protect-your-ir35-position-before-a-contract-starts/) - [ ![Contractor looking at IR35 legislation on laptop](https://sg-accounting.co.uk/wp-content/uploads/2025/12/smiling-businessman-using-laptop-contemplating-while-working-his-desk-office.jpg "Contractor looking at IR35 legislation on laptop | SG Accounting") ](https://sg-accounting.co.uk/blog/what-is-ir35/) ## [What Is IR35?](https://sg-accounting.co.uk/blog/what-is-ir35/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-07-01T10:37:59+01:00June 30th, 2026\| As a contractor, how you are taxed depends on how HMRC views the nature of your engagement - not just how you view it, or even how the agency or client describes it. IR35 is the legislation that governs \[...\] [Read More](https://sg-accounting.co.uk/blog/what-is-ir35/) - [ ![Business owner in a meeting with a specialist contractor accountant](https://sg-accounting.co.uk/wp-content/uploads/2025/12/happy-blonde-female-manager-has-conversation-with-male-colleague-e1766411437925.jpg "Business owner in a meeting with a specialist contractor accountant | SG Accounting") ](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) ## [Why Should I Use a Specialist Limited Company Contractor Accountant Instead of a General Accountant?](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-09-28T16:10:29+01:00June 30th, 2026\| If you're starting out as a limited company contractor, choosing the right accountant is one of the most important decisions you'll make. While a general accountant can handle standard bookkeeping and tax returns, a specialist contractor accountant understands the \[...\] [Read More](https://sg-accounting.co.uk/blog/why-should-i-use-a-specialist-limited-company-contractor-accountant-instead-of-a-general-accountant/) - [ ![Limited company director working at a desk](https://sg-accounting.co.uk/wp-content/uploads/2025/10/man-2562325_1920.jpg "man-2562325_1920 | SG Accounting") ](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) ## [What Responsibilities Do You Have as a Limited Company Director?](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) [Kerry Newman](https://sg-accounting.co.uk/blog/author/kerry/)2026-08-25T10:50:19+01:00June 30th, 2026\| If you've decided on a limited company as the best business model for you, and want to know more about what that means in terms of your directorial responsibilities, then this article is for you. As a limited company \[...\] [Read More](https://sg-accounting.co.uk/blog/what-responsibilities-do-you-have-as-a-limited-company-director/) 1[2](https://sg-accounting.co.uk/wp-cron.php/page/2/?doing_wp_cron=1791403823.7403430938720703125000)[Next](https://sg-accounting.co.uk/wp-cron.php/page/2/?doing_wp_cron=1791403823.7403430938720703125000) Load More Posts Search for: #### Categories - [Autumn Statement (2)](https://sg-accounting.co.uk/blog/category/autumn-statement/) - [Brexit (1)](https://sg-accounting.co.uk/blog/category/brexit/) - [Budget (10)](https://sg-accounting.co.uk/blog/category/budget/) - [Business Bank Accounts (1)](https://sg-accounting.co.uk/blog/category/business-bank-accounts/) - [Client IR35 Hub (4)](https://sg-accounting.co.uk/blog/category/client-ir35-hub/) - [Coronavirus (7)](https://sg-accounting.co.uk/blog/category/coronavirus-covid19/) - [Cryptocurrency (3)](https://sg-accounting.co.uk/blog/category/cryptocurrency/) - [Expenses (20)](https://sg-accounting.co.uk/blog/category/expenses/) - [Finance (40)](https://sg-accounting.co.uk/blog/category/finance/) - [Guides (25)](https://sg-accounting.co.uk/blog/category/guides/) - [IR35 (12)](https://sg-accounting.co.uk/blog/category/ir35/) - [IT Contractor (1)](https://sg-accounting.co.uk/blog/category/it-contractor/) - [limited company (32)](https://sg-accounting.co.uk/blog/category/limited-company/) - [Making Tax Digital (1)](https://sg-accounting.co.uk/blog/category/making-tax-digital/) - [New to contracting (65)](https://sg-accounting.co.uk/blog/category/new-to-contracting/) - [News (103)](https://sg-accounting.co.uk/blog/category/news/) - [Pensions (2)](https://sg-accounting.co.uk/blog/category/pensions/) - [Running your business (93)](https://sg-accounting.co.uk/blog/category/running-your-business/) - [Salary/dividends (17)](https://sg-accounting.co.uk/blog/category/salary-dividends/) - [Sole Trader (2)](https://sg-accounting.co.uk/blog/category/sole-trader/) - [Spring Forecast (1)](https://sg-accounting.co.uk/blog/category/spring-forecast/) - [Spring Statement (2)](https://sg-accounting.co.uk/blog/category/spring-statement/) - [Tax (77)](https://sg-accounting.co.uk/blog/category/tax/) - [Umbrella (3)](https://sg-accounting.co.uk/blog/category/umbrella/) - [VAT (12)](https://sg-accounting.co.uk/blog/category/vat/) ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - X/Twitter This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Financial Services](https://sg-accounting.co.uk/financial-services/) **Published:** April 15, 2021 **Author:** Janet Bower **Content:** # Personal finances and your business There are many benefits that a business can provide to its Directors and employees, such as pension, health insurance or life insurance. Organising savings and investments when you are the Director of a Limited Company can also be more challenging, as is getting a good mortgage deal. [Trustpilot](https://www.trustpilot.com/review/www.sg-accounting.co.uk) ## Free specialist advice for SG Accounting clients As an SG Accounting client, you get financial advice free as part of the service. Our specialist advisor can help the Directors and employees of your company with health and life insurance, pension planning, mortgages and more. ## Financial services for contractors ### Protection The Directors and employees of your company may be worried about financial security, so it’s worth thinking about insurance cover for their peace of mind: #### Critical illness cover Will pay out a one-off, tax-free payment that can be used to support an individual and their family if they get a serious illness and are unable to work. #### Life insurance Cover in the event of a critical accident, illness and death. If you work through a Limited Company, life insurance, sometimes called ‘Relevant Life’ can be provided tax efficiently through your business. #### Income protection insurance Should an individual be unable to work because of injury or illness, Income Protection Insurance pays them, usually until retirement, death or your return to work. #### “Save 39% by insuring through your Limited Company!”\* As the director of a limited company, say your monthly premium for insurance was £30. You could pay this personally or from your company. Premiums paid personally will be paid from your post tax income. That means that a £30 premium would actually cost you £40.13. If you made a payment to a relevant life insurance policy from your company, **the actual cost of your £30 premium would only be £24.30, saving you over £15 a month. That’s a 39% saving!** \*Based on a higher taxpayer rate of 33.75% and Corporation Tax at 19%. ### Wealth Management #### “Save 55% with a contractor pension!”\* Say your company earns £100. You’ll have to pay 19% corporation tax, which brings the amount down to £81. To take this money out of the company, you’ll take home your income through a mixture of salary and dividends. If you took this £81 as a dividend, it’s likely you’ll incur dividend tax of 33.75%. That brings the total amount you take home down to just over £53. Take your pension from here and you’ve lost £47 of your hard-earned cash. However… Invest the £100 in a pension through your company, you can contribute the whole amount AND receive corporation tax relief. That means you have up to £119 available for investment – 55% more than if you’d taken dividends and then paid into a pension. As a contracting or small business there are a variety of tax efficient savings and investment options available to the business and its directors. Some of the areas for discussion include: #### Pensions Pensions are a great tax-efficient saving opportunity for limited company directors. Where someone becomes a director for the first time, they will have to look after their own pension arrangements, as opposed to having this organised by their employer as well as the arrangements for their employees. #### ISAs Individual Savings Accounts (ISAs) offer a tax-free structure for investments and savings be that cash, investment funds or stocks and shares. There is a limit to how much money you can put into an ISA in each tax year, and ISAs come in a number of different forms such as Junior ISAs or Help To Buy ISA so it’s worth discussing the options with a professional. #### Investments The type of investments that you may wish to choose depend on your personal circumstances, goals and attitude to risk. From cost-effective savings schemes to advanced wealth strategies, there are many investment options available so it’s essential to discuss the details. ![Financial Services](https://sg-accounting.co.uk/wp-content/uploads/2021/04/coins.jpg "coins | SG Accounting") ### Mortgages Mortgages can pose a difficulty for business owners as some lenders ask for proof of income that’s hard to provide if you’re taking a combination of salary and dividends. A financial adviser who understands how you operate will be able to source the right mortgage for you with a provider who understands your circumstances. Many people also choose to invest in property through a buy to let property or portfolio, and therefore need to source a buy to let mortgage for this purpose. There’s also the option to invest through a Limited Company, which may make better financial sense, depending on your circumstances. ![Financial Services](https://sg-accounting.co.uk/wp-content/uploads/2021/04/house-key.jpg "house-key | SG Accounting") #### Contractor buy to let mortgage Damian is a contractor purchasing a buy-to-let property. Based on the value of the house at £250,000 and a 25% deposit of £62,500, he can: Get a standard buy-to-let mortgage Pay £770 a month (or interest-only at £270/month) on a 2-year fixed rate of 1.73%. Invest through a Limited Company Pay £840 per month (or interest-only at £389/month) on a 2-year fixed rate of 2.49%. ## What next? Already an SG client? Let your client director know that you would like to talk to our financial adviser and we’ll put you in touch. Not a client yet? What are you waiting for? Check out [our packages](/prices/) – they all include free financial advice. ![Get in Touch](https://sg-accounting.co.uk/wp-content/uploads/2021/06/get-in-touch-title.png "Get in Touch | SG Accounting") We’ll contact you shortly to discuss your enquiry and answer any questions. If we’re unable to reach you by phone, we’ll email you to arrange a chat. **New enquiries:** <newbusiness@sg-accounting.co.uk> [01962 896968](tel:01962896968) **Existing clients:** <enquiries@sg-accounting.co.uk> [01962 867550](tel:01962867550) [Sign up now](https://sg-accounting.co.uk/sg-accounting-signup-form/) - Name This field is for validation purposes and should be left unchanged. - Name\* First name Last name - Email Address\* - Phone Number\* - How did you hear about us?\*SelectGoogleLinkedIn advertClient RecommendationContractorCalculator.co.ukContractorUK.co.ukITContracting.co.ukContractEye.co.ukListentothetaxman.co.ukPreviously a clientAgencyFreeagent.comChatGPT/AI search - Enquiring about\*SelectLimited CompanyUmbrella CompanyLimited and UmbrellaNot sure - Message\* - - - - - - Submit --- ### [Financial Advice](https://sg-accounting.co.uk/clients/financial-advice/) **Published:** April 19, 2024 **Author:** Janet Bower **Content:** # Financial Advice for all SG clients ![A financial advisor looking through data with a business owner](https://sg-accounting.co.uk/wp-content/uploads/2024/03/sg-accounting-financial-advicejpg.jpg "sg-accounting-financial-advicejpg | SG Accounting") Being your own boss can be very rewarding, but can also mean that you no longer have some of the safety nets that permanent employment can provide, like life or income protection, medical cover, enhanced pension contributions and sick/holiday pay. There can be tax benefits in accessing some of these financial products via your business so it’s worth having a holistic look at your situation with a financial advisor who really understands your set-up and who can help you create the most tax-efficient plan for your future. As an SG Accounting client, you get financial advice free as part of the service – we partner with a small number of specialists who really understand our clients. Simply complete the following form and we’ll ask a Financial Advisor to give you a call to discuss your needs ## Specialist financial advice referral Complete the following form, or let your Client Director know that you’d like to be referred. "\*" indicates required fields Name:\* Business name:\* Email address:\* Phone number:\* Which areas would you like to discuss?\* Pension planning Investments and wealth management Life, critical illness or income protection insurance Mortgages Business Insurance Not sure Submit --- ### [Clients](https://sg-accounting.co.uk/clients/) **Published:** April 22, 2024 **Author:** Janet Bower --- ### [Prize draw terms and conditions](https://sg-accounting.co.uk/prize-draw-terms-and-conditions/) **Published:** November 4, 2020 **Author:** Zoe Brandt **Content:** **Survey completion prize draw – terms and conditions** In order to be entered into our prize draw survey, you must have: - completed your name and email address details on the survey form - answered ‘yes’ to the question ‘Do you want to be entered into a free prize draw to win a £250 Amazon voucher?’ - completed the survey within 2 weeks of receiving it You will be entered into the draw following your survey completion, and one winner will be selected at random on Wednesday 30th November 2022. The winner will then be contacted via email, and the voucher will be sent via email within one week of the draw. --- ### [Covid-19 Statement](https://sg-accounting.co.uk/covid-19-statement/) **Published:** March 26, 2020 **Author:** Dan Mepham **Content:** **Covid-19 – we’re working to support our clients** We understand that our contracting and small business clients need our support right now, with their business being impacted by the spread of Covid-19. So we wanted to reassure you that our systems and technologies mean that apart from all working remotely, it’s business as usual in terms of our service for both current and potential clients. Everything is running smoothly and we’re here to help our clients understand their options and make the right decisions at this critical time. If you’re confused about government support measures, we’ve written a [guide to Coronavirus business support measures](https://sg-accounting.co.uk/blog/business-emergency-measures-announced/) and will be updating this as and when new measures are introduced. In the meantime whether you’re a current or potential client, please do not hesitate to contact us through the normal channels. Take care. --- ## Guides ### [Pension Auto Enrolment](https://sg-accounting.co.uk/guides/pension-auto-enrolment/) **Published:** September 22, 2015 **Author:** Jen Winslow **Content:** ### What is auto enrolment? Workplace pensions have changed and employers with at least one employee now need to be aware of their duties under Auto Enrolment. Your staff will be automatically enrolled to a pension scheme in the majority of cases and will have to “opt out” if they do not wish to contribute. Employers will need to pay a percentage of the pension contribution. We have put together some information on how much you will need to contribute and when you will need to start thinking about the scheme. ### Staging Date The staging date is the date automatic enrolment duties come into effect for the employer. They are likely to be sometime in 2016 or 2017. However you can find your start date online here: [http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx](https://www.thepensionsregulator.gov.uk/employers/) ### Point of contact Each company must provide a point of contact. ### Who needs to enrol? ![Who needs to enrol](/wp-content/uploads/2015/09/who-needs-to-enrol.png "Who needs to enrol | SG Accounting") 1 Has a right to join a pension scheme If they ask you to, you must provide a pension scheme for them, but you don’t have to pay contributions. 2 Has a right to opt in If they ask to be put into a pension scheme, you must put them in your automatic enrolment pension scheme and pay regular contributions. 3 Automatically enrol You must put these members of staff in your automatic enrolment pension scheme and pay regular contributions. You don’t need to ask their permission. If they give notice, or you give them notice, to leave employment before you have completed this process, you have a choice whether to automatically enrol them or not. ### Potential Opt out Automatic enrolment duties don’t apply when a company or individual are not considered an employer. You won’t have any duties if you meet one of the following criteria: - you’re a sole director company, with no other staff - your company has a number of directors, none of whom has an employment contract - your company has a number of directors, only one of whom has an employment contract - your company has ceased trading - your company has gone into liquidation - your company has been dissolved ### How much is paid? ![How much is paid](https://sg-accounting.co.uk/wp-content/uploads/2015/09/how-much-is-paid.png "How much is paid | SG Accounting") The minimum total contribution to the scheme is usually based on ‘**qualifying earnings**’. These are gross earnings from employment that fall between the lower and upper earnings limit. Please contact us if you would like more information on auto enrolment and how it impacts on your business. **Categories:** Guides --- ### [A guide to contracting](https://sg-accounting.co.uk/guides/a-guide-to-contracting/) **Published:** August 4, 2021 **Author:** Jen Winslow **Content:** ## Firstly welcome from SG Accounting! Do you have a burning desire to be your own boss? Have you heard about the financial benefits? Or, maybe you want to expand your skills and your current career can’t offer this? If this sounds like you, contracting maybe the right route to take. We’re sure you have many questions. So, we’ve put together this comprehensive guide to dispel any myths and to help prepare you for the journey ahead. At SG Accounting we are proud to say that we take a different approach to accounting. When we start working together we like to arrange a face to face meeting; so we can discuss your needs in greater detail. Don’t worry we are not scary and we’ll try not to bore you too much by talking about tax! We understand that all contractors’ needs are different. But the one thing that stays the same is our promise to you: we guarantee you will receive a personal, professional and expert service – every time you speak to us. People take the move to contracting for various reasons. They might: - Be looking to take the next step in their career - Need more flexibility - Greater earning potential Whatever the reason, switching to contracting is a lot simpler than you may think. To help you to understand what to expect, we’ve set out the pros and cons of contracting through a ltd company. Pros** - You’re no longer an employee. You are your own boss. - You can expect to earn more money as a contractor (in some industries this can be two or three times as much as your employee counterparts) - You can claim for more expenses that are related to working as a contractor. You now have your own business and the costs that come with this - You have greater control over who you work for, when and where - Greater opportunity to expand your skills and knowledge - You have the option to take extended breaks during contracts. Which may work better for your personal circumstances - You get to work with different people on each project (avoiding the office politics that can come with permanent employment) **Cons** - Less job security (but the same can be said about permanent roles as well) - If you don’t work, you don’t get paid - It’s your responsibility to find your next contract. Which means being proactive with job-hunting - If you are not well, you don’t get sick pay (although critical illness insurance is available) - If you want to go on holiday you don’t get holiday pay - You’re not entitled to receive company benefits, like pension contributions - You may face a longer commute for the right contract Swapping from permanent employment to contracting is not something that should be done on a whim. However, the rewards in most cases outweigh any downsides. **Time to talk numbers** What does it take to become a successful contractor? Well, we certainly would say it takes determination, drive and hard work. Making it long term as a contractor also involves being able to make enough money to live off. **What can you expect to earn?** The contracting community is massive. It covers engineering and construction, accountancy and finance, healthcare, IT and so much more. On average, a first-time contractor can expect to charge a day rate between £300 – £500, depending on the industry and geographical location. Contractors with niche skills are in greater demand and thus can charge more. For instance, some cybersecurity contractors are charging more than £500 per day. Similarly, contractors in London can charge more than their counterparts in other areas of the country, simply because there is a greater demand for them. As a contractor working through a limited company, you should expect to take home between 70% – 80% of your contract value after you’ve paid any tax liabilities owed, VAT and accountancy fees. **Which is best for you – Limited or Umbrella Company?** If you decide to become a contractor there are different ways you can operate. The two main options are through an umbrella company or via your own limited company. **What is an Umbrella Company?** Firstly, it’s got nothing to do with umbrellas! An umbrella company (such as SG Umbrella) is a company that acts as an employer to agency contractors who work under a fixed term contract assignment. When you operate through an umbrella company you effectively become an employee of that company, and they in effect ‘contract out’ your services to end clients, usually through a recruitment agency. A timesheet will need to be submitted each month to the umbrella company who will then invoice the client or agency. The umbrella company will pay you minus deductions for PAYE and NIC and their fees. **What is a Limited Company?** A limited company (or personal service company, as it is sometimes referred to) is the most popular and tax efficient way to operate as a contractor. In the process of setting up a limited company, you become the director. This means you are legally responsible for the running of the company. There are certain responsibilities that come with this. These are covered in further detail later in the guide. The limited company is legally a separate entity to yourself. So, any contract is created between the limited company and the client. Not between you and the client. | **Limited Company** | **Umbrella Company** | |---|---| | **Suitable for** | | - Contractors who intend on making contracting a long-term career choice - Contractors who earn more than £25,000 p.a. - Contractors who work outside of IR35 - Contractors who want more control over their finances - Contractors who want to be their own boss and build their own business - Contractors who want to work in the most tax efficient manner | - First time contractors who want the security that employment offers - Contractors earning less than £25,000 p.a. - If you’re intending on contracting for a short period of time - Contractors who don’t want to take care of the admin that comes with running a limited company - Contractors working inside IR35 | | **Advantages** | | - In most cases it is the most tax efficient way to operate - Presents a professional image - You have complete control over the business - Higher take home pay - Can claim for a greater number of expenses - Choose how you want to get paid – usually a mixture of a small salary and dividends - Can join the Flat Rate VAT Scheme | - Contractor receives full employment rights and benefits: sick pay, holiday pay, paternity / maternity pay - Tax and National Insurance obligations are handled by the Umbrella Company - No paperwork – contractor only needs to submit a timesheet | **Setting up a Limited Company** If you are thinking of contracting for the long term, setting up your own limited company is one of the best ways to operate. The thought of forming your company may seem scary and complicated so we’ve laid out the steps that explain what is involved in setting up a limited company. **1. Choose a business name** Every limited company needs to have a unique name. Ideally, the business name should reflect what your business does. As you may use your business name for marketing purposes, it is advisable to choose a name that is easy to remember and spell. Before you incorporate the business, it is also worthwhile checking that the name is available as a web domain, in case you decide to create a website for your business. Once your business is incorporated you must include Limited or LTD at the end. **2. Appoint a director and shareholder** A limited company must have at least one director, probably yourself. The director is responsible for running the company in accordance with all relevant legal requirements, and for completing all the necessary paperwork for HMRC. Ownership of the company is issued through shares. As the director of the company you will likely be the main shareholder as well. Unless you decide to share ownership with someone else such as a spouse. **3. Registering the company** Once you have decided on a business name, you can incorporate the company by registering it with Companies House. This can be done through the post or online. Once the incorporation is complete you’ll receive a Certificate of Incorporation, this typically takes 24 hours. A third party can also incorporate the company on your behalf. We offer this service for free as part of our monthly accounting packages. Please refer to our website for further information. **4. Informing HMRC** You must inform HMRC that you have incorporated a limited company. This must be done within three months of starting any business activity (for example advertising the business). **HMRC will ask for the:** - Company’s name - Company’s registered number - Company’s start date - Details on the type of business you will be conducting - Address you do business from HMRC also need to know the date up to which you are preparing your first set of accounts. After informing HMRC, they will forward you by a post a Unique Tax Reference number (UTR). It’s important to keep this safe. You will need it to set up an online account to pay Corporation Tax and for completing an online tax return. **5. Opening a business account** It’s important to understand that the finances of the limited company are separate to your personal finances. As the director of a limited company you are legally obliged to open a separate business bank account for the company. There are lots of options available to choose from. However, it is worthwhile taking your time to research which account can offer you the best value. **Some things to consider, include:** - Is online banking available? - Can you see an account manager (if needed)? - What transaction fees are applicable? - What interest fees are charged? **6. Find a great accountant** We have spoken to thousands of contractors in our nearly 30 years in business. It’s been a regular occurrence for us to take on clients from other accountants – our clients are often surprised at how little tax planning was done previously. Not only can an experienced contractor accountant help you to operate in the most tax efficient manner, they can save you time and also reduce the stress of running your own business. We are proud to say that most of our new clients come from recommendations. Once you join the SG Accounting Family, One of our client directors will arrange a face to face call with you to discuss it all in further detail. **Explaining expenses** What is a business expense? An expense is defined as something which is made ‘wholly and exclusively for the purposes of your business’, as these can be offset against income and so will help to reduce your tax bill. As a contractor, working through a limited company (outside of IR35) you may be able to claim for things such as those in the list below. - Computer equipment - Company bank charges and interest - Clothing (branded uniform or protective work clothing are allowable. Jeans and T-shirts aren’t allowed we’re afraid!) - Pension contributions - Accountancy fees - Business travel and hotels - Branded stationery (letterheads, business cards etc) and postage - Phone and internet costs - Business entertainment - Equipment for business use - Motoring expenses - Software - Technical books and journals - Some professional subscriptions - Use of a portion of your home as an office **What’s not allowed** If it is not intended for the sole and exclusive use of the business, the rule of thumb is that it is not an allowable business expense. Examples of what is NOT allowed might be: gym membership, medical expenses, parking fines (make sure you put enough money in the meter!) and speeding tickets. If expenses such as this are put through the company, you can end up paying even more in tax than you saved as a “benefit in kind”. **How to claim for business expenses** If you paid for it from your business account, you’ll need to keep a record of the purchase as proof. This can be in form of a receipt. If you made the purchase using your personal account, you will need to transfer the amount from your business account to your personal account, typically on a monthly basis. You need to keep all of your receipts for at least six years so that you can prove the purchase was made. This is to cover yourself in the unlikely event of a tax inspection. **Your responsibilities** Running a limited company means that there are certain things you must do. Don’t worry, these responsibilities aren’t complex, but you need to be aware of what they are. Plus, a good accountant (like ourselves) will be able to help you with these. **ANNUAL ACCOUNTS** These need to be submitted on an annual basis to Companies House. This is typically done within nine months of the year end date. **CONFIRMATION STATEMENT** Submitted to Companies House on an annual basis. It provides them with up to date information on your limited company. Such as details on directors and shareholders and the company address. Companies House charges a fee of £50 for this. **REAL TIME INFORMATION (RTI) PAYROLL RETURNS** Information must be sent to HMRC about an employee’s salary and associated deductions before, or at the same time as the payment is made. **CORPORATION TAX RETURNS** This needs to be submitted to HMRC with a set of year end accounts. It is easiest to submit this at the same time as sending documentation to Companies House. **VAT RETURNS** This can be done online with HMRC or through an appointed third party. We can help you with this. Payment can be made via BACS or via direct debit. **PAYING PAYE AND NIC** If payroll is run on a monthly basis, you need to inform HMRC via RTI of any PAYE and NIC payments due. Payment should be made by bank transfer. Most Directors would receive a salary from their company as well as dividends. **Online Self Assessment and payment of tax liabilities** Self-assessment tax returns need to be submitted and any tax liability paid in full by midnight on 31st January, following the tax year-end. There are fines and penalties for late submission and payment. Plus, interest will be applied to any outstanding amount. This can soon add-up so it’s important to get it done on time. This can be done via HMRC online services (if you have registered). It is also possible for a third party to do this for you. We offer this service as part of our monthly accounting packages. **VAT or not?** One of the most frequent questions we get asked, is “Do I need to be VAT registered?” The answer is quite simple. A business must register for VAT if at the end of any month its taxable turnover for any consecutive 12-month period is more than the VAT threshold (£90,000 as of 1st April 2024). If your turnover is below the threshold but you expect to receive a large income payment in the next 30 days which will take you over the threshold, you must register straight away. Even if you don’t expect to exceed the VAT threshold, you can voluntarily register for VAT. Some of the reasons for this are: - In some industries and professions, it is expected that businesses are VAT registered - It looks more professional to be VAT registered - If you make a lot of purchases for the business, it may be beneficial to be VAT registered as you may be able to claim the VAT back (only if they are eligible) If you decide to become VAT registered, you may find it beneficial to use the Flat Rate Scheme (FRS). This scheme is available to small businesses whose VAT turnover is £150,000 or less (excluding VAT). This scheme allows you to charge VAT at 20% to the company you are contracting for, then pay it back to HMRC at a lower rate (depending on which trade sector your business falls into). By becoming VAT registered you can also benefit from cash accounting. Cash accounting means you only pay VAT to HMRC once you have received it from your customer. This can be very helpful for company cash-flow. With accruals accounting, you must pay HMRC based on when the invoice has been raised. **IR35: In or Out** **What is it all about?** Ask any contractor, the one word that that fills them with fear, and the majority will reply ‘IR35’. IR35 is a piece of legislation that was introduced in April 2000. Its sole purpose is to guard against what HMRC refer to as ‘disguised employment’. A simple example of this would be where an employee would leave their job on a Friday and return the following Monday as a contractor. They would essentially be doing the same job but would benefit from the ‘perks’ of working via their own limited company. **Determining IR35 status** Unfortunately, it is not as simple as saying “I work through a limited company and I am a contractor”. Therefore, I must be outside IR35. HMRC is cracking down heavily on disguised employment, particularly in the public sector. New rules were passed in April 2017, which saw the responsibility of determining the IR35 status of a contract move away from the contactor to any third party who is closest to the limited company contractor’ – so in effect, the organisation that pays you. **Effect on income** If your contract is deemed to be inside IR35, then effectively you are classed an employee of the company and must pay the full amount of tax and National Insurance contributions from your income. Thus, reducing the benefit of working via a limited company. You also have a reduced allowance for expenses, meaning that you can only claim tax relief for certain things. The rules surrounding the IR35 legislation are incredibly complex. If you have any concerns about IR35, please speak with your client director and they can point you in the right direction. **Setting it straight – true or false** There are some people who may warn you against becoming a contractor, believing that it’s a risky business move. To help you to decide if contracting is the right option for you we thought we’d dispel four common myths about contracting. **CONTRACTOR INCOME IS LOWER THAN PERMANENT INCOME?** False: The average contractor can expect to earn between £300-£500 a day. Contractors in niche sectors and major cities, like London, can earn much more. Yes, there may be periods where you aren’t working (between contracts, for instance) but you can reduce risk by taking a proactive approach to finding contracts and building up cash in the company. **ONCE YOU BECOME A CONTRACTOR YOU CAN’T GO BACK TO ‘PERM’?** False: There is no stigma attached to contracting. If you do decide that contracting isn’t for you and want to return to permanent employment, the likelihood of an employer turning you down for a role because you were a contractor is unheard of. Additionally, being able to show that you are adaptable and can take ownership of projects is a plus for any employer. In fact, we find that most contractors never want to return to permanent work again out of choice! **CONTRACTING WILL TAKE OVER MY LIFE?** False: Being a contractor gives you the freedom to work for who you want and when you want. Some contractors work hard on a project and then decide to take an extended period of leave once the contract ends. They may spend this time travelling or choose to spend this time with their family. Employees don’t have this luxury. They are generally given a fixed number of leave days each year which they can’t go over. **MY SKILLS WILL BECOME OUTDATED?** False: A common myth about contracting is that your skills can become redundant after a year or so. Contractors in some sectors may have this problem, but this can also happen to permanent employees as well. As long as you keep your skills updated, you won’t have this problem. **CV tips for contractors – you’re hired!** As a contractor, your chances of getting hired largely depends on the quality of your CV. On average, a recruiter or employer only spends around 20 seconds looking at your CV. So, your CV must be able to pack a punch straightaway. If you haven’t looked at your CV for a while, or if you don’t have one, these tips can help you to stand out from the crowd. **TAILOR YOUR CV** It is essential to adapt your CV to suit the role that you are applying for. It is not uncommon for contractors to have three or four versions of their CV that they use for differing roles. A recruiter or hiring manager will easily be able to tell if it is a generalised CV. If it is, it will likely end up in the bin. **MAKE IT PERSONABLE** As we mentioned earlier, someone typically looks at your CV for 20 seconds or less so the first impression counts. If your CV contains spelling or grammar mistakes, it may swiftly end up in the ‘No’ pile. If you are struggling to put your CV together, it may be worthwhile getting it professionally written. If you prefer to do it yourself, make sure you get one or two people to look over it for mistakes. **LENGTH MATTERS** The standard length of a CV is two pages (A4 size). However, as a contractor, you may have a wider range of work experience. In that case, it is acceptable to increase the length of your CV to 4 pages. However, be careful not to exceed this as the reader may deem it to be too long and may discard it. **MAKE IT EASY TO READ** A recruiter or hiring manager doesn’t have the time to read reams of information. To make your CV easy to skim read, break it up using sub-headers and bullet points. It can be tempting to make your CV more interesting by presenting it differently, such as an interactive presentation or as a web file. However, most people, especially recruiters still prefer to receive a CV as a word document or pdf file. **CV layout** **FIRST PAGE:** **Personal details:** name, contact number, email address and postal address. **Profile:** a short summary (three – four lines is adequate) detailing who you are, what you do, what you are looking for and your core skills. **Expertise:** using bullet points list your areas of expertise that matches the requirements of the contract. Try to expand on these areas by relating it back to numbers. Such as, how much money you saved the company over a specific timeframe. **Skills:** list your skills (or key technological skills) and explain how these can be an asset to the company. **SECOND PAGE:** **Work experience**: list the name of your employer, date or time-frame you worked for them and a short detailed description of the project you worked on. **Additional information:** such as details on languages spoken or type of driving licence held. References: state that these will be available at the interview. A contractor CV differs to a standard CV as the employer is more interested in your skills and expertise and how these can benefit the company, rather than your previous work experience. By following the layout described above, your chances of being offered your ideal contract are increased. **Glossary of terms** **Annual Financial Accounts** Annual Financial Accounts often referred to as Company Accounts or Annual Accounts. They include an income statement, a balance sheet and a directors’ report. Annual Financial Accounts need to be submitted to HM Revenue & Customs (HMRC) and Companies House. **Companies House** This is the UK Registrar of Companies where you must incorporate your limited company. Each registered company is required to file Annual Financial Accounts and Confirmation statements with Companies House. **Confirmation statements** Confirmation statements must be filed annually with Companies House. It gives details of directors, secretaries, the registered office, share capital and shareholding. **Corporation Tax** Corporation Tax is a tax levied on company profits. Corporation Tax is calculated as a percentage of your profit at the end of the company year. **Dividends** Dividends are payments made by a company to its shareholders from company profits. **Payroll Year End Returns (FPS)** Each tax year (6 April – 5 April) requires a final payroll return to “close off” the year’s PAYE (pay as you earn or salary tax) submissions to HMRC by all companies that pay staff salaries, by 19 April. **Expenses** Expenses arise during the discharge of company business; they are wholly and exclusively for the business and have been paid for personally. These expenses can be claimed back from the company. Expenses paid out by the company reduce the company profit and corporation tax liability. **Flat Rate Scheme (FRS)** A scheme that was designed to simplify VAT compliance for small businesses. Businesses can charge VAT at the standard (20%) rate and pay it back to HMRC at a lower rate based on their trade sector. **HM Revenue & Customs** Her Majesty’s Revenue and Customs (HMRC), also referred to as “HM Revenue & Customs”, is the government body responsible for the collection of taxes. **IR35** IR35 is a piece of legislation that allows HMRC to collect additional payment where a contractor is an employee in all but name. **Limited company** A separate legal entity incorporated with Companies House. **National Insurance** National Insurance (NI) contributions are made based on earnings or profit. **PAYE** Pay as You Earn (PAYE) is a tax on income deduced at source by employers on behalf of HMRC. **Real Time Information payroll returns** Also known as RTI. These are monthly payroll returns that need to be submitted to HMRC declaring what salaries your company has paid yourself and/or your employees. **Turnover** Your business turnover means the total sum invoiced by your company (excluding VAT). **VAT** Value Added Tax (VAT) is an end-user tax added to products or services. Output VAT is added to invoices and collected on behalf of the government. Input VAT is what is paid to suppliers. The difference in output VAT less input VAT is required to be paid quarterly to HMRC. **Categories:** Guides --- ### [How much can I claim for using my home as an office](https://sg-accounting.co.uk/guides/how-much-can-i-claim-for-using-my-home-as-an-office/) **Published:** September 23, 2015 **Author:** Jen Winslow **Content:** Many contractors don’t have a separate office and instead will use their home as an office either using a garden office, separate room in the house or just using the kitchen table! You may complete fee earning work from home or it may just be company bookkeeping and administration. In either case, it is fair that you should make a charge to your Company for this facility however calculating how much is a fair amount to pay is crucial. ## How much can I claim? In 2012 HMRC introduced a fixed rate, which is £6 per week. This flat rate expense is published by HMRC as a fair approximation of the costs associated with using your home as an office and does not require receipts or further justification. We have not seen an increase in the amount of HMRC enquiries into use of home claims however it is worthwhile looking at a justification for claims in excess of £6 per week. There are two options: 1. Claim the £6 per week use of home as office expense as published by HMRC. This is the easiest option as does not require further justification or receipts. 2. Provide justification for a higher claim. On this basis you would add up the costs associated with running your home and apportion a claim for the amount of space and time used by your Company. ## How do I justify a higher claim? The below formula is a good basis for calculating an apportioned charge for a use of home as office claim: **B + (D% x C) x E = F** **A** Where: A = The total number of rooms in the home excluding bathrooms and hallways B = The number of rooms dedicated solely for business use C = The number of rooms used partly for business and partly for personal use D = The percentage of time spent for business use in comparison to personal use E = The total variable home expenditure such as heat and electricity ## What counts as a room when calculating B? HMRC says you should count “normal living spaces” as rooms. Therefore, you should include your kitchen, living room, dining room, bedrooms, home office, but you should exclude hallways and bathrooms from your calculation. ## What types of costs can I include in E? Bills associated with running your home which fluctuate depending on usage can be included. Examples include heating and electricity costs. Costs which are fixed and don’t change depending on usage cannot be included. This is because HMRC state that these costs would occur whether the individual worked from home or not. Examples of fixed costs are mortgage payments, rent, council tax, repairs and home insurance. ## What else do I need to consider? A business using a substantial part of their property for business use may have implications on capital gains tax, business rates and principle private residence relief. Please contact SG Accounting if you would like more information. **Categories:** Guides --- ### [A GUIDE TO buy-to-let](https://sg-accounting.co.uk/guides/a-guide-to-buy-to-let/) **Published:** July 1, 2024 **Author:** Jen Winslow **Content:** **Introduction** Investing in buy-to-let properties in the UK can be a lucrative venture, but it’s essential to understand the tax implications to maximise your returns and ensure compliance with HMRC regulations. This guide covers the key tax considerations for buy-to-let investors in the UK. **What is ‘passive income’?** If you’re not familiar with the term ‘passive income’, it refers to earning an income from something that you are not actively involved with. It is commonly associated with income that someone makes from a rental property. Although we’re sure many landlords wouldn’t describe managing a rental property as being ‘passive’! Whether you’re considering becoming a landlord for the first time, you’re on the cusp of purchasing a second property or are looking to become the next big property tycoon, we can help you achieve your goals. With 20 plus years’ experience working with individuals and small businesses, we are proud to class ourselves as experts in property Accountancy and Taxation. We understand that being a landlord is becoming a more complicated proposition and we’re sure you have many questions. So, we’ve put together this brief guide to look at the pros and cons of becoming a landlord and the options available for funding a buy-to-let property. Am I ready to become a landlord?** There are many reasons to become a landlord. From conversations we’ve had with our clients over the years, the most common reasons are: - To make use of an inherited property - As a source of additional income - For investment purposes/capital appreciation - To gain an income from the family property whilst working overseas Whatever the reason, here are some things to consider first: **Advantages** Steady Rental Income: - Buy-to-let properties provide consistent rental income, especially if you secure reliable tenants. - Rental yields can be attractive, especially in certain regions like the North of England. Potential Capital Growth: - Property prices have historically appreciated over time, offering long-term capital gains. - Even if rental yields decrease, rising property values can protect your investment. Tangible Asset: - Owning physical property provides a sense of security and diversification in your investment portfolio. **Disadvantages** Higher Tax Bill: - Changes to tax regulations mean landlords pay more tax on rental income since April 2020 - Mortgage interest relief on mortgage payments for Furnished Holiday Lets has been reduced for higher-rate taxpayers. Market Volatility and Property Risk: - Property prices can fluctuate, affecting your capital. - Property maintenance, void periods, and management responsibilities can be challenging. Regulatory Changes: - Keep up with evolving regulations, such as the Renters Reform Bill, which impacts landlords and tenants. Remember, professional financial advice is crucial before making any investment decisions. **How to purchase a buy-to-let property** There are two main ways to purchase a buy to-let property, either through personal ownership or through a limited company. Due to the many recent changes in legislation over the years which has arguably adversely affected landlords, many are considering the incorporation route; this is in part to avoid the changes in how mortgage interest (very often the biggest single expense a landlord has to face) and other finance charges are treated as expenses. A company can still claim 100% relief on interest relating to the purchase of a property, whereas an individual cannot do the same. While this may sound like a big enough reason to incorporate, there are other considerations. **Should I purchase through a limited company?** The first major obstacle to incorporation is if you already own the property. You will effectively have to sell the property to your own limited company – which will give rise to a capital gain and stamp duty. In broad terms, if you want to gain immediate access to any profit generated from your rental property, it is better to own the property personally. That way, you are only taxed on the profit you make at your relevant rate of tax. A limited company will add an additional layer of tax on your profits. Firstly, your company will be taxed on its profits, via corporation tax. Then, you will be taxed on the drawings you make – these will normally be dividends. Another consideration is that when you come to sell the property, you will as the personal owner have the benefit of a capital gains allowance to offset some of the taxable gain. This is doubled if you own the property with a partner. There is no such allowance if the company decides to sell up. If, however, you want to leave the profits in your company to build up capital and purchase more properties, then the incorporation route may be the way to go. Lastly, obtaining a mortgage for a company is sometimes a trickier proposition than as an individual, again we can help with this process by referring you to our associated financial advisers, who are specialists in buy-to-let mortgages. **Responsibilities as a personal ownership landlord** If you take ownership personally, then it’s your responsibility to keep accurate records of your income and expenses that relate to the buy-to-let property. HMRC expects details of your income and expenses to be available to them on demand if they wish to see them. With this in mind, we can help you organise and keep track of your income and out-goings by providing the tools necessary to keep a clear record of how your taxable rental income has been arrived at. As with any income that has come about through self-employment, you are responsible for submitting details of this income to HMRC through your online self-assessment and for the payment of any tax liabilities. Self-assessment tax returns need to be submitted and any tax liability paid in full by midnight on 31st January, following the tax year-end. There are fines and penalties for late submission and payment. Plus, interest will be applied to any outstanding amount. This can soon add-up so it’s important to get it done on time. Using a trusted tax advisor will help you meet all your compliance requirements. **Making Tax Digital (MTD)** If owning the property personally, in addition to filing an annual self assessment tax return, you could be required to file quarterly submissions for Making Tax Digital. From 6 April 2026 if you have self employed or property income of more than £50,000 you will need to follow the requirements for Making Tax Digital. From April 2027, the threshold reduces to £30,000. If you do meet the filing requirements for Making Tax Digital then we can help ensure you meet all the compliance obligations. **What to expect if you decide to incorporate** Purchasing a property through an incorporated company is sometimes referred to as a Special Purpose Vehicle or SPV. The first thing to think about when looking at renting a property through a limited company is that the company will be a separate legal entity to yourself. This means that any profits, assets and liabilities all belongs to the limited company rather than you as an individual. **How to fund a limited company** Below are some ways in which you can fund your company and, ultimately, fund that property purchase: **Director’s loan –** You, as the owner/director, can lend the company money to fund the purchase. Any amounts introduced to the company are simply an unsecured loan and don’t need to have any fixed terms for repayment or interest. Plus, the repayments of this loan are tax free. Sometimes it’s tax-beneficial for a director to charge interest on a loan to their company anyway and make use of their personal savings allowance. **Loan from family and friends –** A loan from family or friends works in a similar way to that of a director’s loan, but the repayment amounts would be due to the family member or friend rather than yourself as director. **Mortgage –** This is the most common way to fund your company. Your company will obtain a mortgage directly and any interest on the mortgage will qualify as a business expense in full. **Business to business loan –** If you already have another trading limited company, then you could look at lending the funds from one of your companies directly to another. The key advantage of this is that you wouldn’t pay income tax on the dividends you draw from your company in order to inject into the new company as a director’s loan. We strongly recommend that you speak to us before doing this so as to ensure you don’t accidentally give yourself a personal tax bill. **Limited company director’s responsibilities** As a director of a limited company, you must adhere to the rules set out by The Companies Act and tax legislation. These include legal and financial responsibilities, such as: **Annual accounts –** These need to be submitted on an annual basis to Companies House. This is typically done within nine months of the year end date. **Confirmation Statement –** The Confirmation Statement is submitted to Companies House on an annual basis. This provides them with up to date information on your limited company. This information includes details on directors, the shareholders, and the company’s address. **ATED Returns –** ATED Returns stands for Annual Tax on Enveloped Dwellings. This is an annual form that should be completed if your property has a value of £500,000. If your property is let on a commercial basis then there should not be any liability arising from this. If you can, it’s important to ensure that your property is exempt, as tax liabilities can become significant. If you’re unsure if your property can be exempt, we are happy to provide guidance on this. **Let’s talk about expenses** One of the questions we frequently get asked is, “How can I minimise my tax liability?” To ensure that the tax liability on your rental profit is as small as possible, it’s vital that you keep accurate records of the expenses your rental property has incurred. The rules are complex surrounding what can and can’t be claimed for as expenses for residential properties and furnished holiday lets. However, we’ve summarised it for you here: In general, allowable expenses are things you to spend money on as part of the day-to-day running of the property. This includes: - Letting agents’ fees - Legal fees for lets of a year or less, or for renewing a lease for less than 50 years - Accountants’ fees - Buildings and contents insurance - Interest on property loans - Maintenance and repairs to the property but not improvements - Utility bills - Rent, ground rent, service charges - Council Tax - Services you pay for - Other direct costs of letting the property - Replacement cost of furnishing, though not the initial purchase We hope that our guide has been useful to you. Embarking on a buy-to-let property can be challenging but, ultimately, a very rewarding experience. Careful planning of buy-to-lets is essential. We would be happy to discuss the options with you. Give us a call on 01962 867550 or send us a message through our website for further advice. Thanks for reading. **Categories:** Guides, Running your business, Tax --- ### [Expenses guide](https://sg-accounting.co.uk/guides/expenses-guide/) **Published:** August 13, 2015 **Author:** Jen Winslow **Content:** Running a business comes with its costs and sometimes it isn’t always clear which of these costs are tax deductible. To help, we have created a short and informative guide about commonly claimed expenses. **Understanding how reclaiming expenses works for a Limited Company** The hardest part is keeping track of your expenses, whether these have been paid for personally by a director or employee, or through the business directly. Using accounting software such as FreeAgent means you’ll be able to enter or scan all receipts and keep an eye on your expenses as FreeAgent will show you exactly what has been claimed at any time. If expenses are paid for personally on behalf of a company, an expense claim will need to be made to ensure that director or employee is reimbursed by the company for that cost. You should always remember to keep all of your receipts to prove that your expenses are legitimate. If you don’t want to keep paper copies of your receipts then you can keep digital copies, but make sure you’ve got a backup copy! **What expenses can be claimed for?** These are just some of the most common business expenses: - Travel expenses This could be a number of costs such as public transport, subsistence, parking expenses, flights and hotels whilst on a business trip and even temporary accommodation, if an employee or director needs to work away. If an employee or director is using their own vehicle then they can claim for business mileage at 45p for the first 10,000 business miles and 25p thereafter each tax year. The mileage allowance includes the cost of running the vehicle (such as repairs, maintenance, insurance and fuel) – so these should not be claimed on top of the mileage allowance. An employee or director will not be able to claim the cost of any travel to and from their home to their normal workplace. Any claims have to have been incurred for travel to a temporary workplace (you need to consider the 40% and 24 month rule, which you can find more in depth information on in the ‘travel and subsistence through Limited Companies’ guide). - Working from home A director or employee may work from home for some or all of their working time – if this is the case then a claim can be made for using their home as an office. How much that can be claimed depends on how much they work from home. There is an HMRC allowance of £6 per week, however if you are working from home for long periods of time, then a larger claim could be made if justified. - Phone and Internet Telephone and internet costs can be claimed by a business if the contract is in the name of that business. Employees and directors could claim for their individual costs on personal contracts but they will need to look at the itemised bill and claim the cost of any specific business calls. - Insurance costs This will vary depending on the type of business, and the risks involved. Most Limited Companies will require: - *Professional Indemnity Insurance* – this will protect the company in the event that it provides incorrect advice that causes a client financial loss. - *Public Liability Insurance* – this will protect the company if someone is injured or their property is damaged because of your business. - *Employer’s Liability Insurance* –This will cover any employees or temporary staff if they should want to make a claim against your business if they’re injured or fall ill whilst at work. - Pension contributions Any contributions made for directors and employees, will be an allowable business expense. There is a cap on the amount of personal pension contributions an individual can have each tax year and this should be discussed with a Financial Advisor to make sure you stay within the limits. - Stationery, marketing materials and advertising Stationery costs could be for business documents, such as letterheads, business cards, pens, paper, etc. Plus, any costs for promoting your business and advertising your business such as adverts in newspapers, website costs and direct mail are deductible. However remember any costs for entertaining current or prospective clients is not allowable for tax deduction. - Training courses A company can only claim for the cost of any training courses which relate to its current trade, in regards to refreshing any skills already possessed. - Professional fees, including accounting and solicitor fees Your company is likely going to pay an accountant to help with the company’s accounts and tax affairs. This can be offset against its income and therefore will reduce the corporation tax paid. A company may also claim other professional fees, such as solicitor’s if it needs any legal advice. - Equipment and software This could be any equipment that is required by a business, such as computers, printers, scanners, software, machinery and many other items. If there is significant personal use of any company equipment by an employee or director, this will need to be considered and declared on the ‘expenses and benefits’ (P11D) submission to HMRC. This could incur additional tax costs. - Salary and other staff costs This includes any costs in hiring an employee in your company. A business will need to make sure it has registered a PAYE scheme and is deducting the correct taxes, along with making the relevant submissions to HMRC. - Life insurance Life insurance can be paid to directors and employees through the company, but the policy should be discussed with a financial advisor first, as not all are tax free on the individual. Your personal accountant can also provide further details on these policies. - Staff and client entertaining A company can claim for an annual event, for up to £150 per attendee (this can include directors and employees and their partner), per year. It can be for multiple annual events, as long as the total average receipted cost comes to less than £150 per attendee. Please remember this is not an allowance, a company will actually need to have an event and claim the receipted amount. Any other entertaining, such as drinks with a current client or dining with a prospective client, can be claimed back as an expense but a company will not get any company tax relief. There are lots of other expenses not detailed here such as books, childcare costs, donations, eye tests, other insurances and subscriptions. This is not an exhaustive list and there will be other expenses that can be claimed, which specifically relate to a business. --- ### [Your IR35 Survival Guide](https://sg-accounting.co.uk/guides/your-ir35-survival-guide/) **Published:** August 4, 2021 **Author:** Jen Winslow **Content:** Everything you need to know, do and say to help you understand IR35 **Introduction** April 2021 saw the changes to IR35 rolled out across the Private sector. This guide explains what IR35 is, the recent changes, what the expected impact is on contractors, and what action you can take to protect your contracts and take home pay. At SG we’ve worked with contractors for more than 20 years and are passionate about supporting the flexible workforce through the upcoming changes. If you have any questions about what you read in this guide, please don’t hesitate to get in touch. **The basics** **What is IR35?** IR35 (also known as Intermediaries Legislation) is legislation created to identify individuals falsely establishing limited companies as a means to reduce their national insurance (NI) payments and taxes. This is often referred to as “disguised employment”. There are a number of rules that aim to determine whether your contract falls inside or outside of IR35. If your contract is ‘inside’ IR35, you will be taxed as if you were a permanent employee – either via your client’s payroll or through an Umbrella Company. If your contract is ‘outside’ the legislation, you will be considered truly “self-employed” and be able to structure your income so as to benefit from the tax efficiencies available through the use of dividend payments. For this reason, many contractors prefer to work on contracts that are found to be outside of IR35. **How is IR35 status determined?** HMRC have set out three tests that aim to identify whether the contractor is actually working as they would as a permanent employee doing the same job: **Control:** How much control do you have over what, when, how and where the services are performed? The more control you have, the more likely you are working outside of IR35 **Substitution:** Is the work personal to you as the worker or could your Limited Company send someone else to work on this project? If you are able to send a substitute, then you are likely working outside of IR35 **Mutuality of obligation:** Is the client obliged to offer you work and are you as the worker obliged to accept it? These rules relate to the way you actually work as well as what’s written in your contract and therefore need to be considered for each new contract you take on, and regularly reviewed. The basic rules are relatively easy to understand but applying them can be far more complex, as can be seen by looking at recent case-law and HMRC investigations. For this reason, some contractor accountants offer an IR35 contract and working practices review service. **Who makes the determination?** Regardless of whether you’re in the Public or Private sector, the end hirer responsible for assessing your IR35 status. They are therefore liable for any fines if they are found to have got it wrong (through an HMRC investigation). **IR35 history – what changed and when?** April 2021 saw a legislative change that shifted responsibility for determining IR35 status in the Private sector from the contractor to the end client, who will then also bear the tax risk if they get it wrong. The client must assess each assignment with ‘reasonable care’ and provide the contractor with a ‘Status Determination Sheet’ that explains the reasoning behind their decision. It is important to remember that the rules around HOW IR35 status is determined are not changing, just the party responsible for that determination. So if you are currently working on a contract that is genuinely outside of IR35, then this should in theory remain the case after April 2021. **How were the April 2021 changes expected to affect contractors?** Although the rules around status determination didn’t change, the shift in responsibility was likely to lead to a more risk-averse approach, impacting contractors in a number of ways: **Blanket assessments / bans** Sadly we saw some businesses making ‘blanket assessments’ before April 2021, essentially ignoring that the legislation demands they take reasonable care and simply suggesting that all of their contractors are inside IR35. In 2017 very similar rules were introduced to Public Sector organisations and a similar approach of blanket assessments and not using limited company contractors followed. Many contractors either renegotiated their day rates (to compensate for the additional tax) or left and found contracts elsewhere. It wasn’t long before these organisations were forced to reconsider their approach as projects ground to a halt. We expect to see a similar cycle with the Private Sector roll-out although we’d hope that Private Sector businesses would be quicker to realise the knock-on effect of their approach. **CEST** Most end-clients have little (if any) IR35 expertise. They have been told that they can use HMRC’s CEST (Check Employment Status for Tax) online tool, answer a series of questions about the contractor’s engagement and the tool will tell them whether IR35 applies. The tool has been designed by HMRC and some therefore argue that it is weighted in their favour. It is widely considered to be fundamentally flawed (indeed, HMRC investigations have regularly contradicted their own CEST tool) and yet the decision the tool arrives at will be relied upon by your end client to determine your IR35 status. **Fewer contractor roles available** Some companies made the decision to stop using limited company contractors entirely from April 2021 with the option of leaving the role, going ‘perm’ or using an umbrella company, often the suggested alternatives. We believe this approach is very short sighted – the contracting market exists because those businesses want an agile and flexible workforce in order to deliver their projects. Paying a higher day rate for ‘top talent’ without needing to provide employment benefits is a deliberate commercial strategy. The fact that tax advantages are available for contractors has always been the reward for the associated risks. **What’s the impact if a contract is deemed inside IR35?** If your contract is considered inside IR35, your future invoices will be subject to tax and National Insurance as if you were employed by your end client. Whilst it varies depending on the circumstances, for most this will mean 20-30% additional tax liability, which will be deducted at source – with you receiving the net amount. **How to challenge a client over an IR35 status determination** If you find yourself with an end-client who has either blanket assessed all contractors as inside IR35 or carries out an individual assessment but incorrectly arrives at an inside IR35 conclusion, there are steps you can take, with a ‘client-led disagreement’ process part of the legislation: 1. Request the ‘Status Determination Sheet’ (SDS) that each business is required to provide. 2. If you have a contractor accountant that offers an IR35 SDS review service (at SG we do – at no additional cost), send it to them with a copy of your latest contract for a review. 3. They’ll help you identify specific working practices that can be either used as evidence or put in place to help your case. i.e. it helps to have actually used a substitute in your work to prove that substitution is a reality rather than just a clause in the contract. 4. Alternatively, run your details through the CEST tool yourself. Whilst we acknowledge that the tool is flawed, for many contractors it will still arrive at an outside IR35 decision. 5. Provide the evidence to your end-client and the ‘client-led disagreement’ process should begin. HMRC have said that they will stand by the decision of the CEST tool provided the answers given are factually correct. So for many, an outside of IR35 decision should be enough to reassure the end-client. 6. There is no further guidance yet on a formal process, however the end client will have 45 days to respond to your appeal. **What to do if a client refuses to reconsider an incorrect assessment** If you are working with a client that will no longer engage with limited companies from April onwards then your choices are likely to be leave, accept permanent employment, use an umbrella company, or contract through your Limited Company. **Leave (and contract elsewhere through your Limited Company)** Seeking contracts with more reasonable clients was the route taken by many Public Sector contractors in similar situations in 2017. This mass migration of talent instigated a change of approach for many clients who lost time on valuable projects. **Accept permanent employment** You will need to assess your situation, the market and any offer on the table; if you are offered a fantastic package to join as permanent member of staff then you may decide to accept! However, it is likely that the package will represent a significant reduction in your income so that will need to be viewed against the positives of employment benefits. **Contract through an umbrella company** Depending on the offer (and now may be the time to negotiate a higher day rate), you could choose to use an umbrella for the contract in order to pay the tax and national insurance due. Working with a contractor accountant (like SG Accounting) that offers the use of an umbrella at an additional monthly charge whilst keeping your Limited Company running will allow you to swap between your existing Limited Company and umbrella depending on the contract and offers the level of flexibility that many contractors will now need. Any decision to close your Limited Company should be considered very carefully as you may lose some tax benefits of closing your company (Entrepreneurs Relief) if you were to open a new company within 2 years. It may be prudent to keep your Limited Company open whilst the dust settles post-April 2021 and to allow you to consider your longer term plans and options. **Contract through your Limited Company** If your end client agrees, you can continue the contract through your Limited Company, as long as you pay the relevant taxes and NI contributions. This may prove more straightforward for you if you do not have access to an umbrella solution, especially if you think that the client decision may be reversed. There are other benefits of contracting through your Limited Company; for example, you will be able to continue making pension contributions through your Limited Company (assuming you have the available profits to do so) and take dividends once your salary has been accounted for. Also (although this is likely to change in April, in line with the Public Sector), you can currently claim back 5% of income generated by your contract to cover the cost of running a company. You contractor accountant will be able to advise on all of these points and any changes that affect you. **Caution should be exercised in accepting an inside IR35 decision from an existing client where you have previously operated outside of IR35. HMRC have said that they ‘have no plans’ to open retrospective enquiries into prior years but HMRC’s behaviour recently suggests this shouldn’t be relied upon.** **Summary** At SG we have always been behind the concept of any genuine IR35 reform that would correctly tax those working in the same way as employees. However, by pushing the burden onto UK businesses, who typically have no expertise with IR35 and then telling them they’ll pay the tax liability if they get it wrong, we can expect a very risk averse approach from some end-clients. Contractors shouldn’t allow that approach to cost them 20-30% of their income unfairly. It is important to remember that these new rules do not change how IR35 should be assessed nor do they supersede the 50 years of case law on employment vs self-employment. If your contract is genuinely outside of IR35, it is very likely that will still be the case after April 2021. Don’t allow your client to decide otherwise without following the process set out in the legislation. If you need help with this, ensure that you are working with an expert Contractor Accountant like SG. **Categories:** Guides --- ### [On Shore Agency Reporting Requirements](https://sg-accounting.co.uk/guides/on-shore-agency-reporting-requirements/) **Published:** September 22, 2015 **Author:** Jen Winslow **Content:** From 6 April 2015, HMRC will require all employment intermediaries and agencies to provide a quarterly report detailing their contractor’s personal information. This is intended to clamp down on onshore intermediaries who are paying their temporary workers on a ‘bogus’ self-employed basis, thus avoiding income tax and NIC payments. The information that needs to be submitted to HMRC by the agency is: - Full name - National Insurance number (if no date of birth and gender provided) - Address - Date of birth (if not providing an NI number) - Gender (if not providing an NI number) - Passport number or ID card number (if not UK citizen) - Reason why income tax and NIC has not been deducted by the employment intermediary - Name and address of the business supplying the worker to the employment business - The number of hours to which the payment relates You may have already or if not are likely to be asked by your agency to confirm some or all of this information. The agency is under a statutory obligation to provide this information to HMRC and will be penalised if the report is late, incorrect or incomplete. Do not be surprised if your agency is pressuring you for this information or if they are not prepared to renew your contract if not provided. ### Will my Limited Company need to report? For a standard Limited Company with 1 fee earning contractor the reporting onus is on the agency that you are contracted with, so there is no need for you to complete these quarterly reports. For Limited Companies that have more than 1 fee earning contractor (including subcontractors), you will be classed as an intermediary and the reporting requirements will apply. If you are a contractor with more than 1 fee earning contractor working through the same Limited Company please contact us to discuss your options. **Categories:** Guides --- ### [Conduct of Employment Agencies regulations](https://sg-accounting.co.uk/guides/conduct-of-employment-agencies-regulations/) **Published:** September 22, 2015 **Author:** Jen Winslow **Content:** Conduct of Employment Agencies regulations were introduced in 2004 to provide a framework for the minimum standards contractors should expect from private recruitment agencies operating in the UK. The regulations are aimed at workers operating at the lower paid end of the temporary workforce and those that are controlled by the end client. Most professional contractors are businesses in their own right and therefore the regulations do not apply, however many agencies still require their contractors to “opt in” or “opt out”. ### Advantages of opting in Agencies are required to pay a worker even if they have not been paid themselves – Paid holidays (although most agencies will then say that it is a business relationship and therefore paid holidays to do apply) – Workers are not forced to work more than 48 hours per week – Workers are paid at least National Minimum wage – Typically less onerous restrictive covenants and non-compete clauses ### Our advice Our advice is that opting in to these regulations sends a negative message if HMRC were to ever carry out an IR35 enquiry, as you may be seen to be agreeing that you are subject to control. It is therefore our advice that genuine “in business” professional contractors opt out from these regulations. If you would like to discuss your specific circumstances please contact us. **Categories:** Guides --- ### [What is IR35?](https://sg-accounting.co.uk/guides/what-is-ir35/) **Published:** September 22, 2015 **Author:** Jen Winslow **Content:** IR35 (also known as Intermediaries Legislation) is legislation created to identify individuals falsely establishing limited companies as a means to reduce their national insurance (NI) payments and taxes. This is often referred to as “disguised employment”. ### What is Disguised Employment? To help here, we tend to refer to it as the “Friday to Monday” scenario i.e. if a worker leaves their permanent employment on a Friday evening but then returned to their same job at the same desk on a Monday morning as a Limited Company contractor – what would they be defined as under tax laws? As a Limited Company contractor, they would be paying far less tax. Think of IR35 as a proposal between an employee and the client. It ensures an agreement exists between the employee and the client if an employee is directly hired by the client as an employee, not as a contractor through an intermediary (limited company). If caught by IR35 legislation, a company must operate tax in a very similar manner to that if the worker would be employed directly (i.e. Income Tax and National Insurance deducted via PAYE). ### How do I know if my contract is caught under IR35? Unfortunately, there is no black and white test of whether your contract falls under IR35 or not. Instead, we must rely on Employment Legislation and IR35 case law. We apply tests of the three “principles of employment”. These are: ### Control How much control do you have over what, when, how and where the services are performed? ### Substitution Is the work personal to you as the worker or could your Limited Company send someone else to work on this project? ### Mutuality of obligation Is the client obliged to offer you work and are you as the worker obliged to accept it? There are other factors that should be taken into account when reviewing IR35 status, including: - Is the contract for a specific project? - Is there financial risk in the contract? - Do you provide your own equipment? - Are you supposed to fit in to the client organisation as an employee? E.g. staff parties, use of staff canteen, staff training etc. Knowing IR35 regulations in regards to your business isn’t always straightforward. It strengthens your contracting career to have those on your side who are available to help you through this process. Do not leave yourself open to professional trouble, financially or otherwise, due to misinterpreting any aspect of it. To find out more, [contact SG Accounting](/contact/) today. **Categories:** Guides --- ### [Cycle to Work Scheme](https://sg-accounting.co.uk/guides/cycle-to-work-scheme/) **Published:** December 3, 2015 **Author:** Janet Bower **Content:** **Who can set up a Cycle to Work scheme?** Employers of all sizes can implement a tax exempt loan scheme for their employees. To qualify for the tax exemption, the bicycles and cyclists’ safety equipment loaned by the employer under the scheme must be available to employees generally with no groups of employees excluded. **What are the tax implications of a cycle to work scheme?** Employers can loan out bicycles and cyclists’ safety equipment to employees with tax-free benefits, such as benefits in kind. The cycle to work scheme removes the tax charge that would normally apply. Resulting in lower Class 1 National Insurance Contributions (NIC). The Employer can claim back the VAT on the bicycle and cyclists’ safety equipment. Unless registered on the flat rate VAT scheme. Employers who purchase bicycles and cyclists’ safety equipment (up to £1,000 including VAT) for loan to their employees will be able to treat the cost as capital expenditure, and claim the capital allowances in the normal manner. For many businesses bicycles and cyclists’ safety equipment will qualify for Annual Investment Allowance (AIA). AIA allows businesses to write off 100% of qualifying capital expenditure against the businesses’ taxable profits. For businesses whose employees do not earn above the National Insurance thresholds the saving will just be to the Company in the form of Corporation Tax Relief at 19% for the tax year 2019/20. So, a bike costing £800 will mean a Corporation Tax saving of £152 (£800 x 19%). **Is there a mileage allowance for using a bike?** The employer can pay up to 20 pence per mile tax-free to employees who use their own bicycles for business travel however only journeys to a temporary workplace are allowable. If the bicycle is under the cycle to work scheme then employees CANNOT claim the 20 pence per mile tax-free mileage allowance for business travel. **What else do I need to watch out for?** To be eligible for the tax exemption for loaned bicycles and cyclists’ safety equipment and to comply with the Consumer Credit Act 1974 (CCA), the agreement must be a hire agreement and NOT a hire purchase agreement. **Examples of cyclists’ safety equipment allowed:** - Bicycle helmets which conform to European standard EN 1078 - Bells and bulb horns - Lights, including dynamo packs - Mirrors and mudguards to ensure riders visibility is not impaired - Bicycle clips and dress guards - Panniers, luggage carriers and straps to allow luggage to be safely carried - Child safety seats - Locks and chains to ensure bicycle can be safely secured - Pumps, puncture repair kits, bicycle tool kits and tyre sealant to allow for minor repairs - Reflective clothing along with white front reflectors and spoke reflectors **Examples of cyclists’ safety equipment NOT allowed:** - Bicycle computer - Waterproof clothing that is not reflective clothing - Cycling training The bike must remain the property of the Employer during the loan period however the employer can offer the employee the right to purchase at the end of the loan period (however this must be at fair market value). The bike must be used mostly for work purposes (i.e. cycling to work or to temporary work places). **Categories:** Guides --- ## Categories ### [News](https://sg-accounting.co.uk/blog/category/news/) --- ### [Finance](https://sg-accounting.co.uk/blog/category/finance/) --- ### [IR35](https://sg-accounting.co.uk/blog/category/ir35/) --- ### [Umbrella](https://sg-accounting.co.uk/blog/category/umbrella/) --- ### [Coronavirus](https://sg-accounting.co.uk/blog/category/coronavirus-covid19/) --- ### [New to contracting](https://sg-accounting.co.uk/blog/category/new-to-contracting/) --- ### [Salary/dividends](https://sg-accounting.co.uk/blog/category/salary-dividends/) --- ### [Tax](https://sg-accounting.co.uk/blog/category/tax/) --- ### [Expenses](https://sg-accounting.co.uk/blog/category/expenses/) --- ### [Running your business](https://sg-accounting.co.uk/blog/category/running-your-business/) --- ### [Client IR35 Hub](https://sg-accounting.co.uk/blog/category/client-ir35-hub/) --- ### [Brexit](https://sg-accounting.co.uk/blog/category/brexit/) --- ### [Budget](https://sg-accounting.co.uk/blog/category/budget/) --- ### [Guides](https://sg-accounting.co.uk/blog/category/guides/) --- ### [Spring Statement](https://sg-accounting.co.uk/blog/category/spring-statement/) --- ### [Autumn Statement](https://sg-accounting.co.uk/blog/category/autumn-statement/) --- ### [Business Bank Accounts](https://sg-accounting.co.uk/blog/category/business-bank-accounts/) --- ### [IT Contractor](https://sg-accounting.co.uk/blog/category/it-contractor/) --- ### [limited company](https://sg-accounting.co.uk/blog/category/limited-company/) --- ### [Cryptocurrency](https://sg-accounting.co.uk/blog/category/cryptocurrency/) --- ### [Sole Trader](https://sg-accounting.co.uk/blog/category/sole-trader/) --- ### [Making Tax Digital](https://sg-accounting.co.uk/blog/category/making-tax-digital/) --- ### [VAT](https://sg-accounting.co.uk/blog/category/vat/) --- ### [Pensions](https://sg-accounting.co.uk/blog/category/pensions/) --- ### [Spring Forecast](https://sg-accounting.co.uk/blog/category/spring-forecast/) --- ## Tags ### [New - Service](https://sg-accounting.co.uk/blog/tag/new-service/) **Description:** New to contracting service panel to be used for posts with this tag --- ### [Switching - Service](https://sg-accounting.co.uk/blog/tag/switching-service/) **Description:** Switching service panel to be used for posts with this tag --- ### [IR35 - Guide](https://sg-accounting.co.uk/blog/tag/ir35-guide/) **Description:** IR35 guide panel to be used for posts with this tag --- ### [New - Guide](https://sg-accounting.co.uk/blog/tag/new-guide/) **Description:** New to contracting guide panel to be used for posts with this tag --- ### [IR35](https://sg-accounting.co.uk/blog/tag/ir35/) --- ### [contractor accountant](https://sg-accounting.co.uk/blog/tag/contractor-accountant/) --- ### [furlough](https://sg-accounting.co.uk/blog/tag/furlough/) --- ### [job scheme](https://sg-accounting.co.uk/blog/tag/job-scheme/) --- ### [budget](https://sg-accounting.co.uk/blog/tag/budget/) --- ### [Company yearend](https://sg-accounting.co.uk/blog/tag/company-yearend/) --- ### [Autumn Statement](https://sg-accounting.co.uk/blog/tag/autumn-statement/) --- ### [Cryptocurrency](https://sg-accounting.co.uk/blog/tag/cryptocurrency/) --- ### [Contractors](https://sg-accounting.co.uk/blog/tag/contractors/) --- ### [Frances Bridge](https://sg-accounting.co.uk/blog/tag/frances-bridge/) --- ### [Alex Gould](https://sg-accounting.co.uk/blog/tag/alex-gould/) --- ### [Dean Lacey](https://sg-accounting.co.uk/blog/tag/dean-lacey/) --- ### [Niamh Potter](https://sg-accounting.co.uk/blog/tag/niamh-potter/) --- ### [Kerry Newman](https://sg-accounting.co.uk/blog/tag/kerry-newman/) ---