As a contractor in the construction industry, we are sure you would rather concentrate on your work and getting paid than worrying about the latest tax regulations. Unfortunately, navigating the intricacies of the Construction Industry Scheme (CIS) tax regulations can take time and effort. In this situation, it is advisable to hire a contractor accountant so you don’t have to worry about this any more and you will soon see how your accountant will become a valuable asset for your business.
A contractor accountant handles accounting for individual contractors and construction companies under CIS tax regulations. They can guide you through UK tax regulations, minimise the chances of mistakes, and meet stringent deadlines for tax filing. Additionally, their knowledge allows them to offer precise recommendations, improve your tax situation, and guarantee adherence to regulations.
Reasons to hire a contractor accountant
A contractor accountant is vital in helping contractors manage their tax and financial obligations in several ways.
1. Maximising tax efficiency
One proven benefit of hiring a contractor accountant is that they will maximise your tax efficiency while managing your accounts. A contractor accountant can advise on the most tax-efficient business structures, such as a sole trader, limited company or partnership company. Moreover, they can help you avoid penalties and unnecessary tax liabilities while ensuring compliance with HMRC regulations.
Also, they offer guidance to contractors with efficient tax planning strategies to minimise your tax burden by utilising all possible tax-efficient allowances, claims, and reliefs for your construction business. For registered contractors who comply, your accountant will guide you through the application process for gross payment status. It eliminates the 20% CIS deduction while paying subcontractors automatically.
2. Comprehensive accounting support
Accounting for small construction businesses is far beyond just tax filing. They can offer insights to contractors, empowering you to make informed decisions and stay on the right track. They offer full-fledged accounting and tax services tailored to construction businesses such as:
Bookkeeping services: Maintaining up-to-date and accurate financial records is crucial, regardless of your business. A contractor accountant will manage bookkeeping for contractors while freeing you from these repetitive tasks.
Payroll services: For construction businesses with employees, contractor accountants will oversee payroll operations such as providing accurate salary calculations, deductions, and other payroll management services while complying with legal requirements.
VAT returns: A contractor accountant will ensure that you strictly adhere to the VAT regulations and submit your tax returns on time.
3. Staying up-to-date on tax legislation
Navigating the transition from an employee to a self-employed contractor can be daunting due to the intricacies and uncertainties in the legal arena. With the frequent changes in UK legislation and tax changes, seeking help from a contractor accountant will help you stay in the right direction.
Beyond apparent compliance, an experienced contractor accountant will keep you updated regarding any changes to deduction rules, CIS tax rates, and tax filing deadlines. They can also help you create tax planning strategies to reduce potential tax obligations and optimise your financial gain.
If your contracts are within scope of IR35, you need to pay income tax and National Insurance Contributions as an employee. Wrong calculation in tax amount can mean penalties from HMRC. A contractor accountant can advise you on tax strategies to reduce the potential risk of HMRC penalties.
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4. Manage your HMRC queries
Communicating with HMRC can be stressful if a contractor has to do it alone. Whether you have filed taxes accurately on time or not, HMRC may contact you for additional information regarding a return you have filed, or a query regarding your tax code. The situation can become more exasperating if there is any tax return error or any missing data.
HMRC will investigate the case and can ask for a tax investigation. Having a CIS contractor accountant by your side will significantly help. A contractor accountant will communicate with HMRC while managing your queries and doing the necessary work for the tax investigation process. They will respond to assessments, handle inquiries, negotiate on your behalf in case of any dispute, and ensure your message is sent to HMRC.
5. Improved efficiency and time management
Another important benefit of hiring a contractor accountant is that they can free your time by handling your accounting and bookkeeping for construction companies. Navigating the complex tax regulations alone can be stressful for self-employed contractors. Contractor accountants can help you with repetitive and time-consuming tasks like bookkeeping, payroll processing, cash flow, account preparation, and preparing financial reports.
They can help you to file taxes accurately before the deadline, ensuring all legalities. For these tasks, a contractor accountant’s expertise in CIS regulations is invaluable. By hiring a contractor accountant, you can streamline your accounting and financial processes, reduce administrative burdens, and free up time to focus on your core business.
6. Financial expertise and compliance
A contractor accountant collaborates with you to ensure HMRC compliance, providing you with peace of mind while your business operates efficiently. Moreover, contractor accountants also provide financial planning in addition to day-to-day bookkeeping and tax return filing.
They assist contractors in establishing financial goals, budgeting for future ventures, and devising a roadmap for long-term financial strategy. Ultimately, it can help contractors make informed business decisions that align with their financial goals.
Find specialist contractor account
Hiring a specialist contractor accountant goes beyond mere compliance – it’s a strategic investment for the success of your construction business. They are a dependable resource for ensuring compliance, optimising tax strategies and creating accurate financial records. At Bradleys Accountants, our contractor accountants are well-versed in the complexities of CIS regulations.
We will streamline the entire process for you, from guiding you to complete your CIS registration to advising on financial planning. With our expertise, you can focus on your business with the assurance that your accounting and financial matters are in capable hands. Book a consultation with us today and discover how we can help you meet your unique needs.
