IR35 Advice For All Contractors

IR35 status is something that concerns all PSCs, and affects all contractors, public or private sector. Determining and defending your outside IR35 status has never been more challenging than it is now.

Warr & Co can provide expert IR35 advice to all PSCs across all industries. We are well equipped to help you define and defend your IR35 status and always have our fingers on the pulse of IR35 legislation changes.

MTD Compliant Bookkeeping Solutions

As most contractors earn above the VAT threshold (currently £85,000), they are required to submit VAT returns online and keep digital bookkeeping records as of April 2019.

That’s why Warr & Co have developed good working relationships with the best cloud bookkeeping services available on the market. We currently have five recommended solutions, many of which are suitable for contractors, and we’re always more than happy to advise on the best solution for your unique set of requirements.

What Is Professional Indemnity Insurance?

Professional indemnity insurance is the most important type of insurance that your business should have if you are a freelancer or contractor. This type of contractor insurance protects you against claims made by clients.

Professional indemnity insurance will cover you and your business from the everyday risks that can come with being a self employed contractor or freelancer. Imagine a mistake has been made in a project you’ve completed in the past. Now imagine the costs that are potentially applicable in correcting that mistake and the loss your client could have incurred as a result – the bigger your client, the more you could potentially be liable for.

While it’s worth noting that these cases are rare, they do happen every year. Without professional indemnity insurance, you and your business are at huge risk with every new contract you undertake. Insurance is an affordable and tax-deductible safety net for your business.

Why Do We Recommend Professional Indemnity Insurance?

If an occasion should arise where you and your client enter a dispute over an error made, work standards, or expectations, your business needs to be protected from a potential claim. It’s worth noting that even if you are in no way at fault, a claim could still be made against your business – resulting in you having to defend yourself at your own cost.

Professional indemnity insurance protects you from some of the costs associated, which is why the team at Warr & Co believe this is an essential requirement for your contracting or freelance business.

Warr & Co have teamed up with Caunce O’Hara, freelance and contractor insurance specialists, to offer professional services to our client base. Caunce O’Hara, a top 100 independent broker, were selected by our board of directors for their expertise in the freelance contractor market combining decades of specialist experience. In addition, the team at Caunce O’Hara provide a 24/7 easy purchase option. Simply fill your details in to obtain a quote and click to begin your policy.

We can’t stress enough the importance of protecting your business with professional indemnity insurance. Please click the link below to visit Caunce O’Hara for a free no-obligation quote now.

*By clicking the link above you understand that you will be directed to a third party website. If you choose to proceed to purchase insurance products from Caunce O’ Hara, Warr & Co will not receive any commission for your purchase.

What Is A Tax Enquiry?

A Tax Enquiry is an HMRC investigation into your businesses taxes. Often this is not a simple process; the investigative team from HMRC may want paperwork and face-to-face meetings to discuss your business taxes.

Anyone can be subject to an HMRC enquiry, and you must comply by law. They can target any business they wish to and do not have to have a reason to target your business, meaning that they can open an enquiry even if you’ve done nothing wrong.

This is troubling for businesses, and especially small businesses. The cost of defending your company in a tax enquiry with HMRC is significant and can easily run into thousands of pounds, in addition it’s not unusual for enquiries to last months or even years. So you need a good accountant on your side to defend you and ensure no errors are made on your behalf throughout the investigation.

What’s Included In The Tax Enquiry Service?

Warr & Co will deal with all HMRC correspondence on your behalf, we will prepare and defend your case, and we will negotiate the best possible outcome for you wherever necessary.

Did you know? Even if you are not at fault and have had no errors in your business taxes, the costs of defending your business in an HMRC enquiry are not refunded. Unfair, yes, but that’s exactly why this add-on service is highly recommended to all of our business clients.

For one small annual fee, your business is covered in case HMRC decides to open an enquiry for your business. Whatever the outcome, you’re safest if you have our Tax Enquiry Service on your side.

We have plenty of information, including a downloadable leaflet about tax enquiries and pricing for this service, on the link below.

Q. What fees do Warr & Co charge for contractor accounting services?

A. We have a few payment options on offer to contractors. Firstly, we offer a tailored service in which you pay only for the amount of work necessary. The exact amount charged will depend on the services a client requires, but a contractor who maintains reasonable records, has a turnover under £100,000 and who draws a salary once a month from his company will pay, on average, £825 plus VAT for his annual accounts and £20 per month for payroll services. Extra charges will be made for other services that may be required such as completing VAT returns.

Secondly, we offer a monthly payment plan called Encompass. Encompass includes a wide range of services that we believe will be of benefit to your business. These include: access to your choice of cloud bookkeeping software at no extra cost, quarterly VAT returns, accounts submission to HMRC & Companies House, Corporation Tax, Tax Enquiry Service, payroll (up to 2 employees with options to add more), auto enrolment, company secretarial services, annual return, registered office service, references and access to a 24/7 business legal helpline. For an average fee of £140+VAT per month, Encompass often offers the best value in the long run.

Q. What work do I have to do and how long will it take me?

A. You will deal with all aspects relating to you billing for your services and the recording of your financial transactions. We also expect you to retain prime accounting records such as bank statements and receipts. We can then help you with PAYE and VAT as necessary during the year. Most of our clients handle their own VAT but ask us to deal with PAYE.

Q. Will I have to file a tax return and, if so, is this something that you can help me with?

A. At present, HMRC require most directors to file self assessment tax returns. Because you become a director when your company is formed, you may need to file tax returns. Many people starting a company already file tax returns and for most the process is not complicated. Nevertheless, about 70% of our clients ask us to assist them in this respect and we are pleased to do so. The fee for a straightforward tax return is typically around £225 plus VAT.

Q. How do I form a company?

A. By far the cheapest way of doing this is to do it yourself at companieshouse.gov.uk. The fee is just £12. Alternatively we can do this for you. We charge £175 plus VAT, and we provide advice on the share structure and provide statutory records complete at day one. We also then assist with your first VAT return at no extra charge. Here’s the form you need to complete if you’d like us to form your company for you.

Q. What if HMRC opens an enquiry into my accounts or tax returns?

A. This does happen from time to time and we know how stressful it can be – unfortunately tax enquiries are becoming more frequent. It can take many hours to compile the information and documents that have been requested, and many more to deal with the follow-up questions that HMRC will typically ask about a case. In addition, you may need your accountant to attend meetings with tax inspectors in order to settle the investigation. The costs of all these activities are your responsibility, even if you did nothing wrong in the first place and the case is settled in your favour.

Due to these factors, and taking into account that a tax enquiry could cost you upwards of £5,000 to completely resolve, we have introduced a Tax Enquiry Service into our service portfolio. One small annual fee will cover all of Warr & Co’s potential charges for an HMRC tax investigation. Read more here.

Please note, if you are a Warr & Co ‘Encompass’ client, the cost of the Tax Enquiry Service is included in your monthly fees and you are automatically covered, no need to sign up.

Q. What if I decide that your services aren’t right for me and I want to switch to another accountant?

A. Obviously we hope this doesn’t happen but if that is what you do decide, we won’t stand in your way and won’t try to bill you for any work not yet done. We will cooperate with your new accountant by providing all the handover information he requests in a timely manner.

Looking For Help Closing Your PSC?

Closing down your PSC can be a lengthy and confusing process, the team at Warr & Co are able to assist you throughout the process to ensure your solvent contracting business is closed correctly and in a tax-efficient way.

Member’s Voluntary Liquidation Service

Warr & Co can now offer a Member’s Voluntary Liquidation service via My-MVL, a specialist software provided by our partners at Leonard Curtis Business Solutions Group. The My-MVL process provides a seamless online documentation process for our accountants and clients, which can be undertaken remotely – perfect for the current environment where face-to-face meetings are not advised.