Up Your Pay Down Your Tax

Freelance contractors enjoy greater freedom that comes with having several short term contracts rather than working for a single permanent employer. It gives them greater flexibility in the work/life balance.

• They can choose to take some time off when one contract ends, before accepting a new contract.

In comparison, a full-time employee is limited to taking time off by the number of holiday days in their contract. Also, a permanent worker cannot pick & choose what type of work they do. If their line manager gives them a task - it has to be done!

Tax Breaks

Contractors also get some tax breaks that their full time counterparts do not. There will be some business expenses that contractors can use to off-set against their tax bill. But it's critical to understand exactly what items HMRC allow contractors to claim. This can be confusing and complex - but there is a simple solution!

More and more contractors are discovering what's called an 'umbrella company'. This is an alternative to setting up & running your own one-man limited company. Not only is the umbrella company route cheaper, it is also a lot less hassle.

RIP Hassle

The umbrella company does all the administration and paperwork on behalf of the contractor. It takes care of the red-tape, deals with HMRC for you and stays up to date with the ever changing employment laws that affects contractors.

There are over 100 umbrella companies to choose from, so the choice is huge. Picking the right umbrella company that suits you means balancing price, customer service & features carefully. You don't want the cheapest company if they have terrible service and make you wait a long time for your salary to come through.

Dynamic Feed-Back

A personal recommendation is one of the best ways to decide which umbrella company service to use, but if that's not possible check out the feedback from other contractors. Contractor Supermarket collects & collates thousands of votes from contractors who have judged their own umbrella company. All this information is displayed in our umbrella company charts.

Question about tax return expenses category? What is a scale rate expense? Do you know your tax breaks when working from home? See these answers and more - Experts speak!