Skip to content
Contract Eye Contract Eye

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 can you find umbrella company reviews?
    • Umbrella Company Directory
    • Umbrella Company Calculator – calculate your net pay (2025/26)
  • IR35
    • IR35 and Off-Payroll explained – a simple beginner’s guide
    • When was IR35 introduced? Timeline from 1999 to 2023
    • 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 (2025)
  • 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
churchill knight recommended umbrella

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?
Shut Down Company

Closing down a limited company – options for contractors

11th August 2020
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
Gift shares to wife company

Can I gift a share in my company to my wife? Are there any tax consequences?

1st February 2019
The issue of splitting limited company shares with a spouse or partner has been the subject of much confusion and debate over the past few years.
Read More

Posts pagination

Previous page 1 2 3 4
Search Our Site
Aardvark Accounting
Aardvark AccountingAardvark Accounting - £89/month

Full monthly service, incl. FreeAgent! Find out More
SG Accounting – Special Offer
SG AccountingFirst 3 months from £59.50/month!

Bespoke planning for tax efficiency.
Find out More

IR35 Insurance – Just £99/year + PI and business liability cover
ir35 insurance

The UK's leading contractor insurer.
Find out More

top 10 umbrella companies


About Us | Terms of Use | Privacy Policy

All content © Contract Eye Limited 2006-26 | All Rights Reserved
Scroll to Top