Contractor Accountants

Cornhill Private Wealth is ideally placed to act as Contractor Accountants. With 20 years’ experience of the contractor marketplace we know the legislation that affects contractors, and how best to work within the framework of that law to retain the best advantage for our clients. In addition we have bought in the most sophisticated tax planning strategies available, and can implement these where our clients so choose.

Creating accurate accounts is a necessity for contractors, not only from a legal perspective but also in order to ensure that tax efficiency is maximised as expenses incurred in running the business can be deducted from the overall pre-tax profits, reducing the burden of tax liability.

Accounts need to clearly show the company income, amount and the types of expenditure, dates expenses were incurred, and whether they have been deducted in calculating profit, the VAT position where the company is VAT registered, and the overall level of profit after expenses have been deducted.

Sole Trader vs Limited Company Accounts

The Companies Act mandates the preparation of company accounts to a format specified in the Companies Act, whilst sole traders have an obligation determined by the need to file an accurate personal tax return

Sole Trader Records and accounts

You must keep records showing your business income and expenses. Any profits go to you. As you are self-employed, your profits are taxed as income; you pay fixed-rate Class 2 National Insurance contributions (NICs) regardless of any profits you make in addition to Class 4 NICs on any profits. You will need to register for Self-Assessment with HMRC and complete a tax return each year calculating your income and profit between the dates of 6th April and the 5th April

As a sole trader, you are personally responsible for any debts run up by your business. This means your home or other assets may be at risk if your business runs into trouble.

Limited Company Records and Accounts

As the director of a Limited company, you are obliged to prepare a full set of accounts each year, and submit an abbreviated set of these accounts to HMRC. You must also submit a Corporation Tax return and where applicable, VAT returns and PAYE returns. Additionally you must inform Companies House of any changes to the administration or ownership of the company, and also review and confirm the information that companies house holds on record for the company on an annual basis.

By taking over company secretarial duties as well as the preparation of accounts, we can remove 95% of the administrative burden of running a Ltd company, leaving you free to concentrate on bringing in higher value contracts. For Sole Traders, we have an even simpler solution to hand.

 Glossary of Accounts Terms:

Contractor Accountants