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Contractor accountancy services in the Chester area

Small businesses are the lifeblood of the nation and there are many of them in the city of Chester. Whether are operating as a sole trader, in a partnership or as a limited company, business owners will have to comply with the respective tax and accounting regimes. It is therefore a good idea to seek advice from some of the contractor accountancy services available in Chester.

One method of operating as a contractor is under a PAYE umbrella, where the contractor is, in essence, an employee of the umbrella company. This involves sending timesheets to the umbrella company who then invoice the end client or agency for the services provided. Owners are treated as a PAYE employee and taxed accordingly, with the umbrella fee being deducted. People going down this route will generally be permitted to claim some expenses, but should be wary of umbrella companies offering eye catching advertisements which claim to offer special dispensations without the need to possess receipts. Such umbrella companies are best avoided, and HMRC has indicated that they will investigate any company which appears to be proactively enticing tax avoidance through bogus expense claims. It is estimated that businesspeople will retain in the region of 60% to 65% of their contract if they use the umbrella company route legitimately.

A slightly higher percentage of the contract may also be retainable if a business owner establishes their own limited company. This allows for control of the company and payment usually through a combination of salary and dividends, but it is advisable to seek professional advice before pursuing this.

Running a business, or being a freelance contractor, is demanding. Unlike being an employee, success depends on the availability and success of the next order or contract obtained. For entrepreneurs just setting up in business in Chester, or fully established business owners who know the Roman city inside out, a lot can be gained from contacting Wainwrights Ltd – a reliable resource for contractor accountancy services in Chester.