As a contractor you are likely to know about your responsibility surrounding taxes, and just how complicated handling them are.
Although it can seem intimidating, there are benefits for you to take advantage of, and by utilising the services of a financial advisor you can be sure to make the most of your finances. An overview of some of the taxes you might incur as a contractor are below:
Corporation Tax – This tax needs to be paid by all limited companies. The responsibility is completely in the contractors hand, as they not only have to tell HMRC that they are liable to pay corporation tax, but also have to calculate the amount they owe and pay it at the correct time. It is essentially the tax paid on the profits of the company.
Income Tax – The amount you are liable to pay will depend on your income. Regardless of how you choose to work, everyone has a personal tax allowance of £11,000. Anything that exceeds that amount will be taxed.
Dividend Tax – Contractors often have money paid to them through a salary and dividends. This is because dividends have a lower tax rate, and are not liable for National Insurance contributions. They are usually paid out of company profits which have already had tax paid on them which means they do not have to pay further taxes.
For more information and to see how a financial advisor could help you make the most of your income, please visit Contractor Wealth.
The value of investments may fall as well as rise and past performance is not a guide to future returns.
Financial advice is given by Contractor Wealth Management Limited which is an appointed representative of Quilter Mortgage Planning Limited and of Quilter Financial Planning Limited who are authorised and regulated by the Financial Conduct Authority. Quilter Financial Planning Limited and Quilter Mortgage Planning Limited are entered on the FCA Register (http://www.fca.org.uk/register) under reference 440703 and 440718.