For those who have your own limited company and you contract via this you will pay contractors tax in two different forms - one will be collected using your company plus the other will be collected personally. The amount is generally based on the IR35 status of the contract - this piece of tax legislation which got into force in 2000 ensures that some contractors may be taxed as though they were employees of the clients.
Although not all contractors will probably be troubled by this legislation it is still essential for them to have knowledge of it as if they are caught by it, it'll drastically grow their tax liability and can reduce their take home pay by as much as 25%. The financial impact of IR35 will probably be significant for the contractor therefore it is advisable for contractors to get specialist help to find out which their IR35 status is.
Given that many contractors are going to be affected by IR35 this will explain the main reason most of them are searching for solutions to reduce your contractors tax. There are services out there that assist contractors and freelancers to retain a larger portion of their contract value and so pay less contractor tax than they would originally count on paying.
These services permit the contractor to initiate a contract with their suppliers to supply their services. The total payment that you receive may be all the way to 85 percent of the value of the contract. Also, these organisations that help you to reduce your contractors tax can even provide assistance at the finish of the tax year when it comes to completing your self-assessment.
For the people contractors out there that are sick and tired with paying high rates of contractors tax - perhaps given that they have been caught by IR35 - it is worth remembering that there are services which could reduce this tax liability should you only look.
Although not all contractors will probably be troubled by this legislation it is still essential for them to have knowledge of it as if they are caught by it, it'll drastically grow their tax liability and can reduce their take home pay by as much as 25%. The financial impact of IR35 will probably be significant for the contractor therefore it is advisable for contractors to get specialist help to find out which their IR35 status is.
Given that many contractors are going to be affected by IR35 this will explain the main reason most of them are searching for solutions to reduce your contractors tax. There are services out there that assist contractors and freelancers to retain a larger portion of their contract value and so pay less contractor tax than they would originally count on paying.
These services permit the contractor to initiate a contract with their suppliers to supply their services. The total payment that you receive may be all the way to 85 percent of the value of the contract. Also, these organisations that help you to reduce your contractors tax can even provide assistance at the finish of the tax year when it comes to completing your self-assessment.
For the people contractors out there that are sick and tired with paying high rates of contractors tax - perhaps given that they have been caught by IR35 - it is worth remembering that there are services which could reduce this tax liability should you only look.
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To discover more about contractors tax why not stop by the Imagine FS website where you can learn how to reduce your contractors tax.