Contractor Accountants – Specialist Support for UK Contractors
Contracting can be one of the most rewarding career paths in the UK — higher day rates, flexibility, and variety in your work. But it also comes with unique financial challenges.
Helping Contractors Maximise Income, Stay Compliant & Build Financial Security
Contracting offers freedom, flexibility, and often higher pay — but it also brings complex tax rules, HMRC deadlines, and compliance challenges.
A specialist contractor accountant ensures you:
✅ Keep more of what you earn
✅ Avoid costly HMRC mistakes
✅ Stay fully compliant with the latest rules
✅ Have time to focus on delivering your contracts
We’ve supported contractors in IT, engineering, consulting, healthcare, construction, and oil & gas — from first-time freelancers to multi-contract veterans.
Why Specialist Contractor Accounting Matters
IR35 & Off-Payroll Rules
IR35 rules decide if you’re taxed like an employee (inside IR35) or as a genuine business (outside IR35).
Public sector: Since April 2017, the client decides IR35 status.
Private sector: Since April 2021, medium/large companies decide; small companies leave it to the contractor.
2025/26 impact example:
| Contract Value (Annual) | IR35 Status | Approx. Take-Home Pay | Key Differences |
|---|---|---|---|
| £60,000 | Outside IR35 | ~£45,000 | Paid via salary & dividends, more expense claims |
| £60,000 | Inside IR35 | ~£38,000 | PAYE taxed like employment, fewer expense claims |
| £100,000 | Outside IR35 | ~£75,000 | Optimised tax planning, more take-home |
| £100,000 | Inside IR35 | ~£64,000 | PAYE taxed, limited deductions |
Check Employment Status for Tax tool (CEST)
Salary & Dividend Strategy
We structure income for maximum tax efficiency.
2025/26 tax rates for contractors operating via a limited company:
| Tax Band | Income Range | Salary Tax Rate | Dividend Tax Rate |
|---|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% | 0% |
| Basic Rate | £12,571 – £50,270 | 20% | 8.75% |
| Higher Rate | £50,271 – £125,140 | 40% | 33.75% |
| Additional Rate | Over £125,140 | 45% | 39.35% |
Example strategy: Salary around £12,570 + dividends to top up income, staying within allowances where possible.
Maximising Allowable Expenses
Specialist accountants ensure you claim everything you’re entitled to — and nothing HMRC would dispute.
Typical contractor expenses:
Travel: Mileage at 45p per mile (first 10,000 miles), public transport fares.
Home Office: Flat rate (£6/week) or percentage of bills.
Professional Fees: Accountancy, trade bodies, professional indemnity insurance.
Equipment: Laptops, monitors, software licences.
Training: Courses that maintain or improve existing skills.
Pension Contributions: Paid via company for Corporation Tax relief.
Business expenses for the self-employed
| Expense Category | Examples | Claimable?* | Notes |
|---|---|---|---|
| Travel | Train fares, mileage, parking | Yes | If not commuting to a permanent workplace |
| Equipment | Laptop, monitor, software | Yes | Must be wholly for business use |
| Training | Online courses, certifications | Yes | If relevant to current contract |
| Professional Fees | Accountant, memberships | Yes | E.g. ICAEW, IPSE |
| Home Office | Proportion of bills, broadband | Yes | Based on HMRC flat rate or calculation |
*Always check with a qualified accountant before claiming.
Choosing the Right Business Structure
| Structure | Pros | Cons | Best For |
|---|---|---|---|
| Sole Trader | Simple setup, low admin. | Unlimited liability, less tax-efficient. | Part-time/low-risk contractors. |
| Limited Company | Limited liability, tax-efficient, professional image. | More admin, IR35 risk. | Most contractors earning £30k+. |
| Umbrella Company | No admin, PAYE handled. | Lower take-home, fees. | Inside IR35 or short-term contracts. |
We’ll compare your earnings, sector, and risk profile before recommending.
Our Core Contractor Accounting Services
We cover everything you need to operate smoothly:
Company Formation & Registration – Companies House, VAT, PAYE setup.
IR35 Contract Reviews – Clauses, working practices, HMRC defence packs.
Cloud Accounting Setup – Xero, QuickBooks, FreeAgent with mobile apps.
Payroll & PAYE – Salary processing, RTI filing, pension compliance.
VAT Advice & Filing – Flat Rate Scheme evaluation, quarterly submissions.
Salary & Dividend Planning – Updated annually for new thresholds.
Tax Forecasting – Prevent surprises at year-end.
Year-End Accounts – Corporation Tax filing, Companies House submissions.
Best Practices for Contractors
Separate business bank account — Keeps records clean for HMRC.
Digitise receipts — Use your cloud accounting app.
Review quarterly — Stay ahead of IR35, VAT, and tax changes.
Stay insured — Professional indemnity and public liability strengthen IR35 position.
Compliance & Risk Management
Avoid penalties — Late filings = fines from £100+.
Prepare for IR35 audits — Keep contracts, timesheets, and evidence of independence.
Proactive tax planning — Avoid cashflow shocks.
Case Studies
1. IT Contractor – £12,300 Saved
James, earning £95,000, switched mid-year. We:
Restructured salary/dividend split.
Registered him for Flat Rate VAT.
Claimed missed expenses.
Result: £12,300 saved in 12 months.
2. Engineering Consultant – IR35 Defence Success
Amira’s contract was borderline. We:
Amended substitution clause.
Reduced client control indicators.
Produced evidence pack.
Result: Outside IR35, saving £8,400.
3. Healthcare Contractor – Overseas Work
Raj took a 6-month EU contract. We advised on:
Split-year tax treatment.
Double Tax Treaty relief.
Result: Avoided double taxation, saved ~£5,000.
Why Choose Us
90%+ Contractor Clients — We know your industry.
Qualified — ICAEW, ACCA, CIPP members.
Fixed Monthly Fees — No hidden costs.
Proven Results — Documented client savings.
Always Current — Continuous training on HMRC updates.
FAQs
Q: Do I need a contractor accountant if I’m inside IR35?
Yes — we still manage expenses, VAT (if applicable), and ensure PAYE compliance.
Q: Can I switch mid-year?
Absolutely — we handle all liaison with your old accountant.
Q: Do you work with all sectors?
Yes — IT, engineering, healthcare, finance, construction, and more.
Take the Next Step
📞 Book your Free Contractor Accounting Consultation today.
We’ll review your contracts, tax setup, and compliance, then create a tailored plan to increase your take-home pay.