If you’re a Contractor presented with a take-it-or-leave Rate Cut decision, by focusing on your tax efficiency, things may not be as bad as they first appear.
With several large Banks recently implementing double digit rate cut across all its contingent workers, and many more organisations following suit, the turmoil around the Contractor & Freelance markets seems to persist even as the winds of recession blow away.
If you were lucky enough to remain in a contract throughout the recession, you undoubtedly had to contend with a fundamental change in the contractor market place. With unemployment rising and the number of contracts in decline, it was inevitable organisations would seek to amend contract T&C’s in their favour.
With the Contract market now showing growth in every sector, it would seem a no brainer if confronted with a take-it-or-leave ultimatum, however growth does not necessarily equate to abundance and with so many professionals still seeking contract positions, it may well be worth you assessing how you could absorb a reduction in rate by ensuring operational efficiency, prior to walking away.
A bird in hand is worth two in the bush
To be brutally honest, if you are not communicating and having update discussions with your accountant, at least once a quarter, that’s an issue which could well impact not only on your corporate tax position but also your personal tax liability come year end.
Tax planning does not happen by accident. To plan and structure your affairs efficiently requires deliberation based on an intimate knowledge of your personal and corporate affairs, structure, objectives, projections, ambitions and of course financial position. As we all know this set of variables are fluid and as such it is essential regular monitoring and review takes place to ensure plans are flexed to reality.
I am not referring to Tax panning for large companies here, or even SME’s, I am talking about Micro, Close and Owner Director Companies. Contractors, I am talking about you!
The savings enjoyed by many large organisations can just as easily translate down as a percentage to a Micro entity and in many cases make more of a difference in real terms to the cash left at your disposal. Whether that’s cash available for utilisation in the business or available for distribution, it is essential you work with your accountant to ensure you are operating at optimum efficiency.
All of the Accountants at F9 have personally worked as contractors, a fact which allows us to intimately understand your position. We are acutely aware of the impact of poor tax planning and how this can impact the cash in your pocket. We work hard to form relationships with all of our clients, we work hard to understand your business and personal situation giving us the ability to implement the most effective structures for you.
There are many Accounting firms out there, offering low fixed fees and the latest Cloud based Solution, but what is that a solution to? If you are not dealing personally with your accountant as suggested above, you may well simply be paying for a glorified bookkeeper, whose main objective is lowering their cost of data input, as opposed to lowering your tax liability.
For a free no obligation review of your position, or simply for a chat on how we work and what we can do for you, simply give us a call on +44 207 712 1684 or drop us a mail.