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Contractor Accounts

As a ‘subbie’ your financial affairs often lurk in a so-called ‘grey area’.

Individuals and companies who subcontract work out to third parties or take on sub-contract employment need to be mindful of taxation and accountancy obligations – it’s not as straightforward as it may seem.

What are contractor accounts?

A contractor (usually but not limited to) working within the construction industry can be defined as self-employed, employed or a worker (someone who works but doesn’t have a contract).

According to HMRC “individuals and their employers may have to pay unpaid tax and penalties, or lose entitlement to benefits, if their employment status is wrong” so it’s critical to understand how to record earnings and taxes and what to declare.

The good news for contractors and subcontractors working in the construction industry is that there’s a dedicated scheme in place that deducts money required by HMRC – The Construction Industry Scheme (CIS).

Specialist accountancy support for contractors and subcontractors

As a contractor or subcontractor it makes sense to work with an accountancy practice that has experience with the overlapping characteristics of self-employment, freelance work and subcontracting.

At Key Accountancy Services we have years of experience with the Construction Industry Scheme from bookkeeping to filing yearly self-assessments, and annual financial accounts and tax returns.

Knowledge of specialist taxation such as IR35, designed to combat tax avoidance by workers, is important as contractors can often be singled out for investigation.

A combination of personal taxation and business taxation may be applicable for subcontractor accounts and understanding how you and your business operate will determine the best way to log and file your accounts for compliance.

“We started a sole trader business and quickly realised we didn’t have the skills or knowledge required to ensure we were legally compliant with the minefield that is HMRC et al.”

[FAQ] How can I get help with my contractor accounts?

Your first step will be to organise a face-to-face meeting to discuss your current situation. It may be that you need help to backdate your contractor accounts or wish to plan for the future.

We’ll agree a fee to carry out any initial work required such as a self-assessment. Following this, we will agree a fixed fee to work with you on a retained basis to manage your entire (or part) accounts.

For no-nonsense accountancy support and advice, contact the Key Accountancy Services team today on 01782 405442 or send a message.