Specialist Contractor Accountants: IR35, Limited Company & Tax Planning

IR35 Status Applies Contract by Contract

IR35 status is determined on a contract-by-contract basis. You can be outside IR35 for one engagement and inside IR35 for another at the same time. Each contract must be assessed individually against substitution, control, and mutuality of obligation. We review every contract individually, advise on the status of each engagement, and ensure your accounts accurately reflect the correct treatment of income from each.

Overlapping Contracts and VAT Timing

When you invoice multiple clients in the same VAT period, payment timing, VAT treatment of each supply, and reconciliation of input and output VAT all need careful management. For contractors approaching the £90,000 VAT registration threshold across combined contract income, registration timing matters. For those already registered, timely quarterly VAT returns across multiple revenue streams prevent penalties.

Multiple Contracts and Making Tax Digital

From April 2026, self-employed contractors with gross income above £50,000 must maintain digital records and submit quarterly updates under Making Tax Digital for Income Tax. For contractors working across multiple clients and contract types, record-keeping complexity increases. We set up your digital records correctly from the outset so each income stream is captured, categorised, and reported as MTD requires.

Contract Gaps, Bench Periods, and Cashflow

Contractors between contracts face a different cashflow dynamic from employees — no sick pay, no notice pay, and no statutory protections that maintain income during a gap. We advise on retained profit strategies within your limited company, payment on account management, and VAT payment dates so bench periods are manageable rather than stressful.

IR35 and Overseas Clients: A Critical Exemption

The off-payroll working rules that require medium and large private sector clients to determine IR35 status do not apply where the engager is based wholly overseas. Responsibility for IR35 determination remains with your own PSC under Chapter 8 of ITEPA 2003. This does not mean you are automatically outside IR35 — the three status tests still apply — but you must make the determination and demonstrate reasonable care. We review contracts with overseas clients, assess IR35 status under Chapter 8, and document the reasonable care your PSC has applied.

VAT on Services to Overseas Clients

For business-to-business supplies of services to clients established outside the UK, the general rule is that the supply is outside the scope of UK VAT — you do not charge VAT, but you may still need to report the supply on your VAT return under place of supply rules. Getting this wrong creates compliance risk and can affect relationships with international clients. We advise on the correct VAT treatment for every overseas engagement.

Invoicing in Foreign Currency

Contractors invoicing overseas clients typically do so in USD, EUR, AED, or other currencies. All income must be reported to HMRC in pounds sterling. We manage currency conversion correctly across your records using HMRC-approved or commercial rates, ensure your VAT return reflects the sterling equivalent of foreign currency invoices, and document the conversion methodology used.

Working in the UAE or Other Jurisdictions

Extended physical presence in another country creates residence and tax treaty questions. As a practice serving both UK and UAE clients, we advise contractors who work between the UK and UAE, manage income from UAE-based engagements, or are considering a period of residency in the UAE — covering the statutory residence test, split-year treatment, and the interaction between UK and overseas tax positions.

What IR35 Is and Why It Matters

IR35 is HMRC's off-payroll working legislation, designed to prevent contractors from using a limited company to take home significantly more than a direct employee doing equivalent work. If your arrangement would, in substance, make you an employee of the client, HMRC treats the income as employment income subject to PAYE and National Insurance — reducing your take-home by the equivalent of employment taxes.

The Three Status Tests

Substitution: can you send a genuine substitute without the client needing to consent to the specific individual?
Control: does the client control how the work is done, or only what outcome is delivered?
Mutuality of obligation: is the client obliged to offer work, and are you obliged to accept it?
Strong genuine substitution, limited control, and clear absence of mutuality all point towards outside IR35.

What Changed in April 2025 and April 2026

April 2025 raised the small company thresholds (turnover to £15 million; balance sheet to £7.5 million; employees still fewer than 50), reclassifying approximately 14,000 UK businesses from medium to small. From April 2026, for newly small clients, IR35 determination responsibility returns to your PSC — you must assess status and demonstrate reasonable care. A PAYE set-off mechanism from April 2025 also reduces double taxation risk where tax was already paid through an inside IR35 arrangement.

Our IR35 Service

We provide written contract reviews for every new or renewed engagement against the three primary tests and current client size rules. We advise on working practice documentation, respond to Status Determination Statements you disagree with (including the formal 45-day challenge process), and provide ongoing monitoring as your client portfolio and the IR35 landscape evolve.

IR35 Accountant & Contract Review Service

We review every new or renewed contract against the three IR35 status tests and provide a written assessment of your IR35 position for that engagement. We identify clauses that could weaken an outside IR35 position, advise on amendments and working practice documentation, and — following the April 2025 client reclassification changes — review the size status of each of your clients and advise on whether determination responsibility has shifted to your PSC.

Best for: All limited company contractors — IT, engineering, construction, and other sectors — before signing any new contract or renewing an existing one.

Contractor Limited Company Accountant Service

Complete PSC accounting including book-keeping, payroll, director salary and dividend planning, quarterly VAT returns, annual statutory accounts, Corporation Tax filing, Confirmation Statement submission, and your personal Self-assessment as a director. We advise on the optimal salary and dividend split, taking into account National Insurance thresholds, the employer NIC increase to 15 per cent from April 2025, the Employment Allowance, and tax-efficient profit extraction. Includes company formation support where needed.

Best for: All contractors operating through a limited company (PSC), from new formations through to established multi-year contracting businesses.

Contractor Self-Assessment Accountant

Whether you contract as a sole trader, operate through a limited company and need to report director income and dividends, or have additional income from investments, rental property, or overseas sources — we prepare your annual Self-assessment return with a full review of every income source and allowable expense. For contractors subject to Making Tax Digital from April 2026, we set up and manage your quarterly digital submissions.

Best for: Sole trader contractors, limited company directors with personal tax obligations, and contractors with additional income beyond primary contracting.

Contractor VAT Registration & Quarterly Returns

We advise on VAT registration timing, scheme selection (standard, flat rate, or cash accounting), and correct VAT treatment including cross-border services, reverse charge VAT for construction under CIS, and mixed contracts. We prepare and submit quarterly VAT returns on time and advise on reclaiming VAT on business expenses including equipment, software, and professional subscriptions.

Best for: All VAT-registered contractors and those approaching the £90,000 VAT registration threshold across their contract income.

CIS Compliance for Construction Contractors

We manage monthly CIS returns, verification of subcontractors, correct deduction rates (20 per cent standard or 30 per cent unverified), and offsetting of CIS deductions against PAYE and Corporation Tax. For subcontractors under CIS, we ensure deductions withheld at source are correctly claimed. We also advise on reverse charge VAT rules for construction services between VAT-registered businesses.

Best for: Construction contractors and sub-contractors operating under CIS — whether as main contractor or as a subcontractor having deductions made.

Contractor Tax Adviser — Year-Round Tax Planning

We review retained profits, pension contributions through the company, investment income, property, and overseas income to manage your overall tax burden across the year. This includes employer pension contributions (which reduce Corporation Tax and avoid National Insurance), home office and equipment expenses, business mileage, professional development costs, and dividend timing. See our tax planning services.

Best for: Established contractors with growing retained profits, those approaching higher rate thresholds, and contractors with diverse income sources.

Contractor Payroll & Director Remuneration

We manage your limited company payroll — processing director salary each month, submitting RTI returns to HMRC, managing auto-enrolment where applicable, and producing payslips and year-end P60s. We advise on the optimal director salary level each April as National Insurance thresholds and rates change.

Best for: All limited company contractor directors requiring managed payroll with ongoing advice on director remuneration levels.

Contractor Book-keeping — Year-Round Record Keeping

Our book-keeping for contractors covers invoice management, bank reconciliation, expense categorisation, and records that make VAT returns, payroll, Self-assessment, and Making Tax Digital submissions straightforward. We work across Xero, QuickBooks, FreeAgent, and Sage, and recommend the right platform for your income level and complexity.

Best for: Contractors who want financial records maintained accurately throughout the year rather than compiled under pressure at year end.