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News and resources for IT Contractors

  • Limited Company
    • Contracting via a limited company – advantages and disadvantages
    • How to set up a limited company as a contractor – comprehensive guide
    • Limited or umbrella company – which is best for contractors?
  • Umbrella Company
    • How to compare umbrella companies: 20 things to consider
    • Contractor umbrella company fees – how much do they charge?
    • How to find reliable umbrella company reviews
    • Umbrella Company Directory
    • Umbrella Company Calculator – calculate your net pay (2026/27)
  • IR35
    • IR35 and Off-Payroll explained – a simple beginner’s guide
    • IR35 timeline: when it was introduced and how it evolved
    • Download free IR35 contract templates and example clauses
    • Guide to IR35 contract review services for IT contractors
  • Accounting
    • Contractor accountants – what to look out for
    • Do you have to appoint an accountant for your limited company?
    • Your company annual accounts – the basics, and filing deadlines
    • Top 10 Contractor Accountants (2026)
  • Tax
    • What is the most tax-efficient director’s salary in 2025/26?
    • Corporation tax – guide for limited company contractors
    • Limited company tax basics for contractors
    • What are limited company dividends and how are they taxed?
  • Expenses
  • Insurance
    • Business insurance – what’s mandatory?
    • Professional Indemnity
    • Public liability insurance
    • Employers’ liability insurance
    • Life Insurance
    • Income Protection
    • Private Medical Cover
    • Critical Illness Cover
  • Work
  • Finances
    • Contractor Pensions
    • What is a SIPP?
    • Contractor Mortgages
    • Business Banking

Contractor Tax Guides

As a contractor, you must pay tax on the profits you generate from your contract work. I

If you are an umbrella worker, you are an ’employee’, and your umbrella company will calculate and deduct and tax from your income. You won’t have to submit any additional paperwork unless you have any untaxed income outside of your umbrella earnings.

As a limited company contractor, you are responsible for calculating the tax your business owes and paying any liabilities to HMRC on time.

Most limited contractors outsource these tasks to their accountants, however, you should be aware of how business tax works in practice.

Here are some of our most popular limited company tax guides.

  • Contractor expenses – what can a limited company claim against its Corporation Tax liability? And what costs are excluded?
  • National Insurance – what is it? – contractors are liable to pay Class 1 NICs on salaries. What are the current rates?
  • Guide to Corporation Tax – what it is, how to register, what are the deadlines, and how CT applies to limited companies.
  • Salary vs. dividends – what’s the optimum balance for limited company owners during the current tax year?
  • Value Added Tax (VAT) – what it is, how to register, and how it is collected? An overview of the various VAT options.
  • What are dividends? – most of your income as a company owner will be funded by dividends. What are they, and how are they taxed?
salary vs dividend

What is the most tax-efficient director’s salary in 2026/27?

1st April 2026
As a limited company director, what is the most tax-efficient salary to pay yourself in the 2026/27 tax year, and any other employees?
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child benefit tax charge

What is the High-Income Child Benefit Charge, and how does it work?

20th March 2026
This controversial tax rule reduces the amount of child benefit you are entitled to keep if you (or your partner) earns over £60,000 each year.
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limited company contractor car taxed

IT contractors and company car tax – with examples (2026/27)

2nd March 2026
Important tax considerations to bear in mind when deciding whether to buy a company car, or claim a mileage allowance for business use of your own car.
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Contractor VAT Schemes

Value Added Tax – VAT guide for IT contractors

27th February 2026
Practical Value Added Tax guide for contractors explaining when to register for VAT, how VAT works, and how to manage VAT schemes and quarterly returns.
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How much salary contractor

What salary should I pay myself as a limited company contractor?

17th February 2026
One of the most common questions asked by limited company contractors is what level of salary they should pay themselves.
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Self assessment

Self-Assessment – how do payments on account work for contractors?

11th February 2026
As a limited company contractor, you need to set funds aside for your annual tax return liability, which is where ‘payments on account’ come into play.
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it contractor tax

Limited company tax basics for contractors

1st February 2026
A concise guide to the taxes you will encounter as a limited company contractor - Corporation Tax, VAT, National Insurance, Income and Dividend Tax.
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Registration

Do I need to register my ltd company for VAT?

19th January 2026
At what stage do limited company contractors have to register for VAT?
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Shut down limited company

Company strike-off: can you extract profits tax efficiently?

24th August 2025
If you are considering closing down the company you have used for contracting, we look at how any remaining profits can be extracted in a tax efficient way.
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Shut Down Company

Closing down a limited company – options for contractors

11th August 2025
The different options you will face when shutting down your company - keeping the company 'ticking along', applying for a voluntary strike off, or a members voluntary liquidation.
Read More

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