Contracting Clarified with Our Team

To help you navigate the ins and outs of contracting, Mark, one of our key team members here at Icon Accounting, has put together some practical advice and answers to common questions from contractors. Whether you’re just starting out or have been contracting for years, these tips will help you maximise your benefits and establish solid financial habits.

1. Are there specific types of expenses that contractors commonly process, and what best practices do you recommend for managing them?

The main Expenses I would see claimed by my contractors would be their working from home expenses, mobile bills and Internet Bills. When it comes to managing their expenses I always recommend that they keep a good record of their expenses throughout the month to avoid forgetting any when it comes to month end and requesting a payroll. Alternatively, if they use the icon portal to upload expenses as they are incurred this can be a very useful tool for our clients.

2. Are there any expenses that contractors often overlook, but can be significant for tax relief?

The main one that I would see overlooked is definitely the small things like phone and broadband, while claiming 50% of these bills may seem like a small saving at the time, over the course of a year these savings really add up so its always best to claim as much as possible.

3. What is the most common mistake contractors make regarding their finances?

A common mistake that I see amongst contractors when it comes to managing their finances would be to ignore completely opening up a pension account under their limited company as they are only beneficial in the long term. I would always recommend our clients to open up a pension account under their limited company and to even put an amount of income aside for it as the pension is by far the most tax efficient way of dealing with excess funds in the company.

4. For new contractors, what steps or routines do you suggest establishing and maintain good financial habits?

For new contractors the main piece of advice I could give would be to use the tools at their disposal from Icon as much as possible. Whether this be familiarising themselves with the portal to make claiming expenses easier or reaching out to their account manager with any queries they may have. We are always happy to provide our advice to any query big or small.

5. What advice would you give to someone just starting their contracting journey?

An important thing for someone starting out their contracting journey is to begin their long-term planning or to at least have something in mind for their company over the next number of years. This can be really beneficial in terms of financial planning for the company and helps us to advise them on how best to maximise the amount of money they can make from their contracting experience.

6. How frequently should contractors review their setup to ensure it aligns with their career goals and facilitates growth?

I would recommend that they do this as often as possible, it is important that they keep on top of this as having a clear idea for how they want to operate under their limited company is of great benefit to them as it allows us to provide more tailored advice to their specific needs.

7. As a dedicated account manager at Icon Accounting, if there’s one resource you consistently recommend to your clients in the contractor community, what would it be?

The main resource that I highly recommend to all of our contractors here is our Icon Portal. The portal has been designed in a way to make our clients lives easier in terms of managing their finances. Things like uploading expenses and  getting in touch with your account manager are all just one or two clicks away using the portal. The user friendly nature of the site means that once you have familiarised yourself with the portal it will become your most useful tool while navigating your contracting journey.