3 Mistakes IT Contractor Accountants Can Help You Avoid
Taking the plunge into independent contractor status after being an employee is a very exciting moment and is often something that the new IT contractor has been thinking about for months if not years. In all the enthusiasm of starting a new business it is easy to forget that there are a lot of pitfalls in working for yourself and it isnâ€™t just a matter of having to do your own tax returns. An IT contractor accountant can help throughout your business life, but it is very important to have an experienced person on board right from the start. Penalties are heavy for companies which do not set themselves up properly and so it is vital to have the help of a firm of accountants for IT contractors working with you from the absolute outset.
Once the company is set up and your chosen IT contractor accountants are in place and dealing with the day to day issues of IR35 and payroll which are on-going, you should have a face to face meeting if possible and they will be able to explain to you how to avoid the three main problems that many small businesses starting out can encounter. Our firm are happy to discuss any worries with you, so you can run your IT contracting business correctly right from the start.
1. Not saving for the future â€“ it is all too easy to spend the money as it comes in and forget that there might be a further downturn in the economy, a new competitor in your specific market or other problems which can reduce your income, hopefully temporarily. Your IT contractor accountant can advise you on how to save, how much and where to put your money for the best return.
2. Spending the companyâ€™s money – Only spending legitimate dividends is very important; not all money coming in to a limited company is yours to spend. It is difficult without help from an expert to know what counts as income and what should be left in the account. Using a qualified accountant for IT contractors will help you to understand this issue.
3. Not opting in to IR35 â€“ many contractors doing their own accounts shy away from IR35 legislation and it certainly is very complex. This could have serious implications of cost for your company and so using an expert to help you with your tax calculations on this and other issues is a good way to save money in the long run.
Setting up an IT business is something that is not for everyone and it is a good idea to have a long chat with an expert before you embark on such a step. When you do decide to go it alone, though, do make sure that you donâ€™t lose touch with your colleagues from your days at work â€“ contacts are very important and also a great way of keeping up to date with innovations which may reach larger companies before they filter down into the general IT community.
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