Contractor Accounting

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Demand for contactor accounting is on the rise in the UK as more and more people realise that to secure work they need to seriously consider working for themselves. Over the years, the labour market in the UK has undergone considerable changes, but the pace of change has been accelerated by the current recession.

Today, in order to survive or flourish companies have to be flexible and respond quickly to opportunities. To do this they need as flexible a workforce as possible. They need to have access to an experienced workforce when they secure large contracts, but do not want the responsibility of that workforce during quieter times. Hiring and firing people is time consuming and expensive. As a result, most UK firms prefer to use freelancers and contractors whenever possible.

In addition, because there is less job security available more UK citizens are opting to work for themselves rather than search out regular jobs with traditional contracts. Whilst many are doing this by setting themselves up as sole traders or limited companies, a lot are seeing the benefits of working under the contracting system.

What the Contractor Accounting Industry Has to Offer

However, in order to ensure that they do not fall foul of the UK tax system. by doing so, they need the help of the contractor accounting industry. Employing a contractor accountant helps them, but it also protects those that employ them for encountering problems with the UK taxman.

Until 1999, it was easy to employ a contractor. However, because doing so meant that both the employer and employee paid far less tax the rules were changed in 1999. This was done primarily to stop those who were abusing the system by categorising permanent employees as contractors from continuing to do so. However, sadly, the changes also ended up categorising many genuine contractors as employees and led to them and the people who employed them paying a far higher rate of tax.

Fortunately, the contractor accounting industry rose to the challenge. Today they provide contractors with advice on setting up their companies correctly to avoid excess tax, drawing up contacts and claiming expenses as well as all of the regular accounting services, a company needs.

If you are looking for a contractor accounting service, visit the Freelancers and Contractors website. There you will find plenty of free advice as well as details of the services we offer.


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