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0845 834 0269

Head Office

0203 318 3024

info@123contracting.co.uk

The information every
freelance contractor
needs to know!

What is included as standard for a fixed fee of £65.00 + vat per month:

Full Contracting health check - is your business performing as best it could - we'll ensure it is.

If you're new to freelance contracting, we'll ensure you start trading in the right way.

Then you can sit back and relax, your ongoing HMRC & Companies House compliance will be taken care of.

The 123 Way - simple & stress-free.

The 123 Way

The 123 Guides

Business Tax

Business Structure Review

The type of tax you pay as a business depends completely on the structure of your business. If you freelance as a Sole Trader then you will pay Income Tax, if you contract through your own Limited Company then you will be liable for Corporation Tax. We have included details for both below so you can see the comparison between freelancing as a Sole Trader or through your own Limited Company.

Brief descriptions of each business tax

Sole Trader - Income Tax

If you freelance as a Sole Trader then you will need to prepare accounts each year for your business. These will show the amount of money coming in and the expenses going out with a final profit figure for the year. This figure is then turned into your Taxable Profit by adding back the expenses that are not tax deductable and taking off any capital allowances (tax reliefs due to buying large assets).

Now you have your Taxable Profit you will be liable for tax at the appropriate rates of personal tax, currently 20% for the Basic rate, 40% for the Higher rate and 50% for the Additional rate.

Addition to this you will need to pay Self-Employed National Insurance Contributions.

Limited Company - Corporation Tax

If you freelance through your own Limited Company then you will need to pay Corporation Tax on the Taxable Profits of the business. The current small business rate of corporation tax is 21%; this is being reduced to 20% from April 2011.

Which ever structure is best for you, The 123 Way includes the working out of your businesses Taxable Profit and the preparation and submission of your tax return and all supporting computations.

Running a Limited Company

Being a Sole Trader

Responsibilities

Business Bank Account

Drawings

Bookkeeping & Records

Trading Accounts

Business Tax

VAT - The Basics

VAT - The Choices

123 Income Illustrator

The 123 Income Illustrator shows you what you can expect to take home from a given contract.

It also compares the differences between freelance contracting through your own Limited Company, through an Umbrella Company, as a Sole Trader or if you were to return to full time employment.

The123 Income Illustrator

Invoicing

Expenses

Expenses - Detailed Guide P1

Expenses - Detailed Guide P2

Personal Tax/Self Assessment

Importance of Information

Important Dates

Calculators

123 Referral

We run a simple referral programme where for every client you refer to The 123 Way we will give you £123.00

For more information check out the link below:

123 Referral

FAQs

Disclaimer:
This information is for general information only. No responsibility is taken for any action taken or refrained from in consequence of its contents. Always seek professional advice before acting.