Industry
Accountants for contractors
Limited company contractors and CIS subcontractors — status, extraction and cash flow handled properly.
Overview
Your sector, in practice
Contracting is a business model with its own tax geography. Status, expenses, extraction and the gaps between contracts all behave differently from a conventional trading company, and the rules have moved repeatedly over the last decade.
We work with contractors across engineering, construction, IT and industrial services in the Scunthorpe area — many of them supplying the large industrial employers and their supply chains on rolling contracts.
Challenges
What makes this sector different
Employment status and IR35
Whether an engagement is inside or outside IR35 changes take-home pay substantially. For medium and large end clients the determination sits with the client, but the consequences land on you.
Irregular income
Income arrives in lumps with gaps in between, which makes tax reserving and dividend planning far harder than it looks.
Expense boundaries
Travel, subsistence and the 24-month rule are common areas of challenge, particularly on long site-based engagements.
CIS deductions
Subcontractors in construction have 20% or 30% deducted at source, creating refunds that must be reclaimed correctly and promptly.
Tax and accounting
Key considerations
Company or sole trader
A limited company is usually more efficient above a certain income level, but adds administration and only makes sense outside IR35.
Salary and dividend mix
Reviewed annually against thresholds; a fixed approach set three years ago is rarely still correct.
VAT scheme choice
The flat rate scheme suited many contractors before the limited cost trader rules; for many it no longer does.
Pension contributions
Employer contributions from the company are frequently the most effective route for contractors with fluctuating income.
How we help
Our work for these businesses
- Company formation, PAYE and VAT registration
- Contract and working practice review for IR35 indicators
- CIS verification, monthly returns and refund claims
- Quarterly extraction reviews and tax reserving
- FreeAgent or Xero setup with mobile receipt capture
- Self Assessment and company accounts as one package
Watch out
Common mistakes we see
- Taking dividends without checking distributable reserves
- Treating every site as a temporary workplace beyond 24 months
- Ignoring the tax reserve until the January bill arrives
- Assuming a contract is outside IR35 without reviewing working practices
- Running personal expenditure through the company account
FAQs
Contractors questions
Above roughly the higher-rate threshold and outside IR35, a company is normally more efficient. Inside IR35, the advantage largely disappears and an umbrella arrangement may be simpler. We model both against your actual rates before you decide.
Enquire
Tell us about your business
A short conversation is usually enough for us to tell you whether we can improve on what you have now.
Related services
Services that work alongside this
- AccountingA complete accounting relationship: statutory compliance, regular reporting and someone to ring before you make a decision.
- VATRegistration, scheme selection, quarterly returns and the awkward questions — reverse charge, partial exemption and cross-border supplies.
- Self Assessment Tax ReturnsReturns prepared and filed for sole traders, directors, landlords and higher earners — early, accurate and with the reliefs claimed.
- Tax PlanningLegitimate, well-documented planning across profit extraction, capital investment, pensions, property and succession.
Related industries
Businesses we work with
- ConstructionCIS, reverse charge VAT, retentions and contract-level costing for builders and civils contractors.
- EngineeringProject costing, long-term contracts, R&D relief and skilled-labour payroll for engineering firms.
- TradesStraightforward accounting for electricians, plumbers, joiners, roofers and groundworkers.
- Limited CompaniesEverything a Scunthorpe limited company needs — accounts, tax, payroll, VAT and director planning in one place.