London remains the UKs largest contractor hub with more contractors and contractor vacancies than any other city with positions across IT and Telecoms, Hospitality and Tourism and Retail. However Finance and Banking is probably one of the largest, with many of the leading UK, European and US banks having large offices in the City.

So in the rush for competitive contracts, most people will be more concerned about where the work is coming from, how much they will charge their clients and how to manage their cash flow, than the fact that they need a good accountant to not only help manage their books, but also to make them even more money from their earnings.

But do I really need an accountant?
Most people who are self employed as contractors or have formed a small limited company will greatly benefit from London contractor accountants. A good accountant in London will be experienced in managing the books of self employed people while enabling you to take advantage of all the little loop holes from claiming expenses to paying yourself in dividends.

So what’s so special about a contractor accountant in London?
Location is one thing. After all, being able to meet your accountant face to face to go over the books is an opportunity that very few small businesses or individuals can otherwise afford due to travel and distance.

Similarly, a London based accountant will be savvy in all the ways of the city. So they will also be able to help you claim back additional costs commonly incurred from working in the city, such as tube travel, parking, business lunches and business calls as well as stationary and other essential expenses which help you to keep up appearances in this fast moving and highly competitive world.

However, you must keep records of any expenses. You’ll need these records to make sure that your forms P11D, P9D and P11D(b) are accurate at the end of the tax year, and to ensure that you and any employees pay the correct amount of tax and National Insurance contributions.

But these are just a few of the expenses that can be claimed. And if you are a contractor working inside IR35, you can also claim expenses, although these tend to be fewer.

Considering how much a good contractor accountant could save you in expenses, they would cover their own costs and still net you a sizeable profit. They can also provide invaluable insights and advice which well aid your business in the long run as well. So it’s definitely a worthwhile investment

You have to arrange an appointment with a registered negotiator; they could fix all of your choices connected to your revenue from annuity, and clarify the information obviously. They could also assist you create the right choice in addition to help to discover a proper and safe retirement choice. Furthermore, they could assist you to discover the accurate supplier and bring you all over to a state where you could take the accurate quantity out. Positively they don’t need you to discuss the accurate quantity and sustain extra assessments.

Mediators are not connected to some bank or annuity earner, which means that they could meet some of the best agreements accessible in the whole market. Several mediators will provide a free assembly with a cultured monetary advisor who will evaluate your savings and validate that you acquire the correct pension drawdown proposal. They could also assist to do an arrangement with no additional responsibilities in addition to offer a complete clarification of how pension drawdown does its job.

Pension drawdown could provide you money for a timely retirement, reserves that you could use to capitalize in any scheme hereafter, a reserve of fast, tax-free revenue, and correct to make use of money. If you follow to the overall standards, then a pension drawdown could be an outstanding method for you to acquire access to capitals. Pension drawdown, moreover, assists you grow a plan for withdrawal for the reason that you know how much funds you got.

They’re as well a countless way to place more cash in your account for unanticipated expenditures. However, they could be difficult; a lot of people will attempt to discover specialists to counsel them prior to them to carry out determining on which choice they have to select if they have to do integrity to their monetary necessities.

]]> http://personalfinancebible.co.uk/personalfinance/ins-and-outs-of-pension-drawdown/feed/ 0 http://personalfinancebible.co.uk/assetmanagement/preparing-for-the-unexpected/ http://personalfinancebible.co.uk/assetmanagement/preparing-for-the-unexpected/#comments Thu, 12 Apr 2012 16:03:26 +0000 Admin ROP http://personalfinancebible.co.uk/?p=394 The world of business is crucially unforgiving when it comes to personal circumstances or unfortunate and unpredictable eventualities. Business is a constantly moving and changing structure of networks, deals and production, if your business or trading has to stop for any reason you can not expect your clients or partners to stop with you whatever the eventuality. Many businesses can even be victims of natural disasters or acts of god, but they simply must keep trading with other businesses in order to survive as a B2B company.

If anything should happen to your premises it can be greatly beneficial to have a backup in place to be able to fall back on in order to keep on working. Large corporations may have multiple offices which they can rely on or relocate to if their main premises is inaccessible for any lengthy period of time. However, for independent businesses this is not an option, which is why it can be wise to invest short term in a temporary cabin to use as a base of operations. This can be a very cheap solution to provide you and your employees with a temporary and portable office environment which you can still use whilst your main premises are being renovated, undergoing maintenance, or being repaired.

Financially it can also be very important to make sure that a business has a reasonable emergency fund where possible, outside of the regular cashflow, just to prepare for any unexpected eventualities that might arise suddenly. This emergency fund could be the saviour of any business on multiple occasions because for small and independent businesses a large expenditure could mean that they lack the funds to continue operating or to pay their employees meaning that they have to cease trading until they can recover the funds.

Another solution to potential personal difficulties is to do with flexibility within your employees. Training employees in many different job roles benefits everyone because they receive a wealth of experience and an employer receives a safety net of a multi-trained and competent workforce should any one worker be incapable of working for any length of time. This technique is called ‘hot desking’ whereby employees get to fulfil multiple job roles over the course of their employment. This technique has also been shown to improve employee morale as it prevents them from becoming bored or tired with always performing the same job.

For any business it is important to be prepared for these types of eventualities because it is very likely that in the life of the company one or all of these circumstances will inevitably arise. A business that is prepared for them, is going to always be able to trade and will be a step  ahead of the competition .

On the other hand, the part played by debt management strategies in working together with the debts already sustained might not be reduced. A lot of people be indebted their financial existence to the debt consolidation loans that assisted them counter insolvency and other debt connected difficulties.

As the defensive part of the debt management strategy is more extensively used, we will initially deliberate the several strategies to cope with debts that a person or business has already experienced.

The most conservative technique of dealing with debts is debt alliance credits. Debt consolidation loan is fundamentally destined to assemble easy finance for defrayal the knoll of debts. A particular loan is strained after combining the several debts. One feature that differentiates debt consolidation loan from other loans is that the debtor gets assistance and help from the debt alliance loan source in the payment of debts. Professional cooperation skills and a expertise in debt settlement endorse the facilities of the debt alliance loan earner by the way.

The debt payment company assumes to pay the debts while the borrower reimburses the amount by means of small regular payments to the debt payment company. As deliberated above, the defensive approaches are similarly significant strategies employed to prevent the incidence of debts. Debt therapy purposes to inform debt management exercise to people as well as businesses. People are trained the way wherein to achieve their profits. A lot of the instructions given as a portion of the debt counseling methods are time worn. The goal of debt advising is not to evoke these methods, but to assist people by means of ground-breaking ways and means to work these methods in their life.

The self-justifying debt management tactics having reimbursed the debts do not give enough assurance of the threat of debts not rising its head again. There is a requirement to stop the cycle of the debts, and the precautionary part of debt management strategies will be particularly useful on this count.

One of the first steps towards starting a company is company registration, giving you a registered name, certain tax exemptions, the legal requirements to trade or obtain trading licenses as well as a good starting point to develop other parts of your company from. Prospective business owners could even register a company name and keep it inactive for many years just to protect the rights to the name should they choose to use it in the future. This allows small businesses that are starting up to secure a name and carry out the other preparations they need in confidence before they commit themselves full time to the venture.

A LTD company stands for ‘limited liability’ which means that your personal assets are protected if the business should fail and it allows you most of the requirements that you need in order to trade. Company formation can be quite a lengthy process to anyone who has not started a business before, particularly because it is so important to get it right from the start to prevent running into any problems later on. For this reason it is beneficial for new business owners to consider using a company formation agent who will help them negotiate all of the legal requirements and documentation involved in business start up.

Even though SIPPs have been about ever since 1990, in current years they have turned out to be far more accepted as investors intend to attain the most excellent level of pension income achievable. At the moment, an approximate 70,000 SIPP plans can be found in the UK with assets beyond £14bn. The major attraction of SIPPs is that they are able to provide you far better option and additional control over your investments in pension funds than conventional pension plans.

The most important advantage of SIPP Pension is that of tax benefits. Similar to all normal personal pension plans the investors of SIPP also can benefit from tax. These investments are involuntarily free from fundamental tax rates. In case you pay a very high rate of tax then you can additionally claim relief in your returns. In the same way if you have invested your SIPP in real estate, then income from such investments will not be subjected to tax on capital gains.

Key points for anything SIPP investors’ tax benefits:

• Government involuntarily appends fundamental tax respite rate of 20%.
• High rate of tax payers is now eligible to claim back an additional 20% or may be even 30% tax respite depending on the tax rate that you pay. It means that whether you are paying a 40% or 50% tax then you can claim additional tax relief.
• When you invest your pension money in a SIPP it can develop free of any Income tax in addition to UK Capital gains tax.
• The moment you become 55 years of age, you are entitled to obtain a 25% amount entirely tax free.

Exchange rates explained

A couple of weeks ago I went on holiday to another country for the first time and, as I’d never had to think about it before, I was completely clueless as to how the exchange rate system worked. I left it up to my friends to visit the bureau de change and get the currency we needed, but then I started to wonder just how it actually worked. Well, if you’ve found yourself in a similar situation as of late or you’re just interested in learning all about exchange rates, here’s my idiot’s guide to them.

To begin with you need to understand why different countries have different currencies, as without this there’d be no need to explain exchange rates! Basically, as countries evolved as singular nations without influence each developed its own monetary system – Japan has the yen, the USA’s got the dollar, the UK has the pound and so on and so forth.

In the past the exchange rate system followed the gold standard – this was a way of showing how much a currency was worth in real gold sat in bank vaults. This was set by the USA, which decided how much an ounce of gold was worth in dollars. This led many other countries to base their exchange rate system on this standard. This was an easy way of figuring out how much a currency was worth when set against the dollar but, after issues such as inflation, the Wall Street Crash, the First and Second World Wars and many other worldwide problems, the gold standard collapsed.

There are now two major systems for determining a currency’s exchange rate – the floating exchange rate system and the fixed exchange rate system.

The floating system is determined by a number of economic factors for each country, so its exchange rate can fluctuate depending on how strong its economy is, as well as many other factors. Most countries prefer to use the floating system as fluctuations in its exchange rate are determined by the foreign exchange market, which deals in international trade for the entire world and therefore gives a truer picture of a country’s exchange rate.

An example of a fixed exchange rate would be the Euro. In this system countries fix their currencies against another country’s currency, with the central bank (which is the European Central Bank in the case of the Eurozone) being the entity that keeps the exchange rate close to the selected target. Twelve countries use the Euro and so it is now the second most important currency in the world, behind the US dollar.

Currencies and exchange rates are vital as they help to determine a country’s economy so, the next time you visit the bureau de change, pay some attention to the exchange rates!

In principle it sounded like a great idea but when we came to investigate what types of local business were actually sourcing their products from close businesses we began to wonder if there were any of these around anymore. Yes, there are still some local growers of food and food products on a small scale in the local surroundings. We have a local brewery but that sources its raw materials from other parts of the world on the commodities market. What about undergarments? Do we have any clothing manufacturers locally? Could anyone find underwear, such as pants and bodysuits, that had been made in the region or is it all shipped from global locations where human resources are cheap? As long as oil remains inexpensive then the tendency will continue to source components around the world. But how long will it be before the price of oil goes through the roof and by then, will we have found the scientific breakthrough that will provide us with enormous quantities of fuel cells to power the changeover to electric trucks and electric aeroplanes?

Stimulating the uk economy at different locations with a local pound, as they have been doing in Totnes and Brixham, needs local organizations to work together to keep that money circulating locally. If it just leaks out as soon as it gets spent with a local business because their own purchases have to be paid in a different currency then we will continue to have a weak local economy.

Everyone knows that the most tax efficient way of contracting or freelancing is through a limited company. By registering your own limited company the only contractor tax you will pay are Limited Company Taxes and Personal Taxes.

If functioning through a limited company correctly, you will be saving a lot of money even when paying these taxes while being eligible to claim back a wide range of expenses outside of IR35.

Corporation Tax
Within a limited company, the contractor tax comes in form of a 20% corporation tax which applies to limited companies earning under £300,000 in overall profits. However, your expenses come out of your overall profit and are not taxed, which is why claiming expenses is such an important part of being a contractor.

NI Contributions
As part of contractor tax, your limited company is required to pay 13.8% on any salary paid to an employee over the amount of a hundred and thirty pounds a week. And that includes paying your own salary from the limited company which you are the owner of.

VAT
Fortunately, contractors are registered upon Value Added Tax (VAT) on a Flat Rate Scheme. This type of contractor tax scheme was bought in to simplify VAT for smaller companies and businesses, charging 20% on all invoices and then paying the HMRC back at a lesser rate.

PAYE and Income Tax
When contracting, income tax is directly deducted from your earnings as though you were employed by another company. However, there are different thresholds for income tax, so be sure to check up on the amount that you should be paying.

Employee’s NI Contribution
And finally, if you receive payment and benefits from your own limited company, you will also be required to pay Employee’s NI Contribution. So you get taxed for as an employer paying yourself from your own limited company and then you pay tax for receiving a salary as an employee of your own limited company.

As always, seek the advice of an accountant to help you with crucial dates of payment and to ensure that this does not place you inside IR35.

Create a website

Since you are already an IT contractor, you already have a great understanding of the requirements that are actually needed to construct your own company website – which is a colossal advantage. Here are a few tips to keep in mind when developing your website.

1. Less is more. Keep the design nice and simple; do not let the design override the actual functionality of the website. Also, people do not want to be bombarded with information.
2. Make it easy for your audience. The internet is well developed now, with not many sites looking tardy – and if one does it starts ringing bells. Make sure it looks professional, clickable working links and so it is easy to navigate.
3. Have a consistent theme through your site, so it is not jumbled in its meaning and signals.
4. Keep uploading recent work to your website, show people what you are doing – and update your CV regularly and keep it on there.
5. Contact details – have them displayed on your site, and make sure you have a contact page also.
6. Make sure your site works on all platforms, so just test it to be on the safe side.
7. Consult with your IT contractor accountant, and see if he has any advice to give you on your site – since they have seen a lot of them, they can advise on what is successful and what is not!

Using Social Media sites for Business

IT Contractors can use a few different platforms of social media site to promote their services, skills and background history for not even a penny. Facebook has 800 million users, which has doubled since 2010. Twitter is ever expanding as a platform to market your own services and LinkedIn has 100 million plus users in the professional industry looking to make connections.

Utilising social media platforms is key, if you want to be a thriving IT contractor in contemporary society – any good IT contractor accountant would tell you the same thing!