Monday, 7 December 2009


Responsibilities of an Accountant:
  • Prepare profit and loss statements and monthly closing and cost accounting reports.
  • Compile and analyze financial information to prepare entries to accounts, such as general ledger accounts, and document business transactions.
  • Establish, maintain, and coordinate the implementation of accounting and accounting control procedures.
  • Analyze and review budgets and expenditures for local, state, federal, and private funding, contracts, and grants.
  • Monitor and review accounting and related system reports for accuracy and completeness.
  • Prepare and review budget, revenue, expense, payroll entries, invoices, and other accounting documents.
  • Analyze revenue and expenditure trends and recommend appropriate budget levels, and ensure expenditure control.
  • Explain billing invoices and accounting policies to staff, vendors and clients.
  • Resolve accounting discrepancies.
  • Recommend, develop and maintain financial data bases, computer software systems and manual filing systems.
  • Supervise the input and handling of financial data and reports for the company's automated financial systems.
  • Interact with internal and external auditors in completing audits.
  • Other duties as assigned
Who needs an Accountant:
Simply put, If you own a Company, you would need an accountant to take care of your Company accountancy activities; invoices, payrolls, expenses, etc.

Well-known Accountancies for IT Contractors in London:
Accountancy Notes ACCA and PCG Accredited Accountant PCG Affiliate PCG Affiliate PCG Affiliate ACCA

Saturday, 5 December 2009

First Time Contractors

Terms you need to learn about:

Limited Company
Umbrella Company
Your Invoicing Company
Personal Service Company
Your Timesheets:
Your Expenses
Finance Director
  • As a Contractor you are your own Finance Director and you have responsibilitie
  • Is a law to caught Contractors whose work conditions make them to be considered as an Employee (Pays more tax) as far as law is concerned
Review Your Contract Before HMRC Do

Friday, 4 December 2009

All About IR35

Contractors who are inside IR35 pay much more tax than people who are outside, hmm?! not sure what this means and why?

Who is caught by IR35?

As a contractor you will be inspected by HMRC, on average, every 5-6 years. If you're asked to be inspected, you should take legal advice.

Your application is to be reviewed by HMRC which means all the previous contracts will be reviewed. HMRC's goal is to accuse you of a failure that might not be aware, so you must be fully prepared for the review and take legal advice.

If you are about to sign a new contract then you should immediately ask for a review to protect your own interests.

If you are caught by IR35 and receive an extra tax bill, then you may only have 3-6 months to repay 6 years of additional liabilities. This can often be very difficult and seriously affect cash flow.

Working Conditions of an Employee vs Working Conditions of a Self Employed Contractor

The Revenue’s opinion is that if you have been working for the same Client or through an Agency for the last 2 years, then you should be treated as an employee.

How to stay out of IR35?

Limited Company vs Umbrella Company vs Employee

1) As a Contractor using Limited Company

Gross: + 50,000
Rate: 250 per day
Contract length: 9 months
Expenses = - 7000 (salary) - 7000 (salary) - 2000 (Travel, etc) - 1000 (accountant) = - 17000
Company Profits: + 33000
Corporate Tax (22%): -7000
Company Net Profit (Dividend): + 26000
Dividends Tax (10%) = - 2600
Dividends Credit (10%): + 2600

Overall tax paid: -7000
Overall net: 26000 + 16000 + 1000= +43000

Take home over 85% of your gross!

Any legal issues?

2) As a Contractor using Umbrella
Gross: + 50,000

3) As an Employee

Gross: + 50,000
Length: 11 months in a year
Tax: - 14,500
Net Salary: + 34,500
Expenses: - 2000
Overall Net: + 32,500

Take home 64% of your gross!