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VAT: The application of a 20% tax on your sales invoices.

It is compulsory for a company to register for VAT if their sales have exceeded £83,000 in the last 12 months, or if you expect to increase this threshold in the next 30 days.

Contractors have a choice of using standard VAT reporting or a simplified Flat Rate Scheme (FRS) reporting option, if they qualify. New contractors can voluntarily register for VAT and report using the Flat Rate Scheme (FRS) – this is particularly beneficial if you are not expecting to exceed the £85,000 threshold, as it allows a reduction of 1% on the FRS rate to apply in the first year of trading.

HMRC have very strict penalty regimes and will apply a percentage of the 'potential lost revenue' for failing to register for VAT if required to do so. This can range from 30% to 100% in cases of deliberate and concealed failure to notify.

Choosing a registered address

Both a business and registered address must be provided when your company is incorporated with Companies House.

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Expenses you can deduct

Do you qualify for deductions on your expenses? Contact Dhikr Accountants for more information.

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The flat rate scheme (FRS)

Flat Rate Scheme (FRS): For businesses whose forecast annual sales will be £150,000 or less in the next year.

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24 month rule

According to HMRC, contractors are entitled to claim travel and subsistence expenses if their workplace is considered temporary. This is designed for contractors whose professional position requires them to travel between sites during the course of their contract.

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Closing your company

There may come a time when contracting is no longer right for you. You may have been offered a permanent job, or you may be simply changing careers.

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Take home pay calculator

The take home pay calculator gives you an illustration of what your take home could be.

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FAQs

Get answers to the most commonly asked questions.

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© Dhikr Accountants is a trading name of Dhikr Accountants Limited

Company Number: 10500267. Place of Reg: England & Wales Registered Office: 36 Uxendon Crescent, Wembley, Middlesex, HA9 9TN
Tel: 07591 207278
Email: imran.anjum@dhikr-accountants.co.uk
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