How Do I Become a Contractor?
A contractor is a worker who sells services to clients through their own business rather than through an employer’s payroll. Becoming a contractor in the UK takes 3 steps: choose a working structure, complete the registrations in order, then arrange the practical items before the first contracting client signs. Moving from freelance to contract work […]
The Construction Industry Scheme (CIS) and Contractors
The Construction Industry Scheme (CIS) sets the tax rules that bind contractors: the businesses that engage and pay subcontractors for construction work in the UK. A CIS contractor registers with HMRC, verifies every subcontractor before the first payment, deducts 20%, 30% or 0% from each payment, files a monthly return by the 19th, and passes […]
What is IR35 and Does it Affect Me?
IR35 is the off-payroll working rules, the HMRC regime that decides whether you pay tax like an employee or like a business when you contract through your own limited company. IR35 affects you when you supply services through a personal service company and the engagement would have counted as employment had the client hired you […]
Who Is Responsible for my IR35 Status?
The client’s size and sector decide who is responsible for IR35 status. A medium or large private client determines status itself and issues the paperwork. A small private client leaves the decision with the contractor’s limited company. The fee-payer in the chain, usually the agency, deducts the tax either way. HMRC holds whichever party determined […]
Self Assessment for Contractors
Self Assessment for contractors is the HMRC process that reports salary, dividends, sole-trader profits and CIS deductions on a single annual tax return. The system runs on a fixed calendar: register by 5 October, file and pay by 31 January, then budget for payments on account. GOV.UK guidance, verified 19 September 2026, underpins every figure […]
The Construction Industry Scheme (CIS) and Subcontractors
The Construction Industry Scheme (CIS) changes how subcontractors in UK construction receive payment. Contractors deduct tax from subcontractor payments and send it to HMRC before the balance reaches the subcontractor’s bank account. An unregistered subcontractor has 30% of every payment withheld in advance. This guide covers the subcontractor side of the scheme: registration, the 20% […]
Best Dividend and Salary Split for Contractors in 2026/27
Salary and dividends are the two routes a limited company contractor uses to extract profit. Salary runs through PAYE and reduces Corporation Tax. Dividends distribute profit after Corporation Tax and carry no National Insurance. The best dividend and salary split for contractors in 2026/27 weighs frozen salary thresholds against the dividend tax rise that started […]
Inside vs Outside IR35: Your Take-Home Pay Explained
Inside vs Outside IR35: How Your Status Affects Your Take-Home Pay is the comparison every UK contractor runs before signing an engagement. The off-payroll rules, known as IR35, split each contract into two tax worlds: inside, where fees are taxed like employment income, and outside, where fees are taxed through a company as Corporation Tax […]
IR35 Reforms 2026: What Contractors Need to Know
The IR35 rules for contractors are unchanged in 2026. The off-payroll working rules that took effect on 6 April 2021 still apply exactly as written, according to GOV.UK guidance verified on 19 September 2026. The phrase “IR35 reforms 2026” describes the tax landscape around the rules, not new legislation: dividend tax rates rose on 6 […]
Understanding How Pay As You Earn (PAYE) Works
PAYE works by making employers deduct Income Tax and National Insurance from every employee’s pay each payday, report the figures to HMRC through payroll software on or before payday, and send the money to HMRC by the 22nd of the following tax month. Pay As You Earn (PAYE) is the UK’s payroll tax collection framework […]