The Shape of AI is Changing

At the end of 2022, AI became part of the conversation for people outside of computer programming.

At the time, there was an expectation in some circles (and fears in others) that it could soon mean the end of many types of job. Four years on, most employers are coming to the conclusion that AI can’t fully replace skilled jobs. Instead it now represents an opportunity, if properly handled, for contractors to work more efficiently.

AI can be used to accelerate a number of traditionally slow processes, allowing you to handle more in less time. Contractors who control their working time can take on more challenges or free up more time for other things, with obvious benefits.

However, we do have to offer a word of caution. It seems well established now that LLM-based AI will always hallucinate information at least sometimes, and that has to be caught. Use AI when you have a good idea what the outcome would be, so that you can see if something’s thrown it out of line.

JSL Rules Affect Umbrella Companies & Recruitment Agencies

Upcoming reforms to how umbrella companies work will come into play on the 6^th of April this year. This will impact a great many contractors, and while it’s designed to protect them it may mean many have to find new positions or representation.

We wrote about this in detail here, but ultimately, if you’re not sure what the impact on you will be you’re encouraged to talk to an accountant who can give you specific information.

Making Tax Digital

Also coming in on April 6^th is a new phase in the rollout of Making Tax Digital. The threshold for sole traders (and landlords, but our focus today is on freelancers) is dropping to £50,000.

For many of you, this will not be a problem as you’ve either moved to this standard already or you’re working with firms like ICS Accounting who are prepared for the switch, but those of you who do tax last-minute and earn over £50,000 should be aware you’ll be moving to quarterly last-minute deadlines instead!

Niche Skill Sets are On the Rise

All the comments we hear suggest that having specific niche skills is set to be a huge asset in the job market this year. In construction we’re hearing rumours that ‘green’ skills, making more environmentally-friendly buildings, are particularly sought after at the moment; meanwhile, IT contractors are expected more and more to build their familiarity with particular tech stacks or industries.

Older Freelancers May Encounter Pension-Related Income Tax

In April the state pension rises again, with an annual payment reaching £12,548. The personal allowance threshold for income tax remains at £12,570, just £22 ahead.

Some older contractors reaching pensionable age may have been planning a semi-retirement based on smaller contracts in addition to state and other pensions; this change, though a benefit overall, may mean these contractors want to reconsider how much additional work they take on.

Speaking to a contractor accountant may help you plan your finances more valuably.

Across the Board

Whatever your preferred role and goals, you’re going to benefit in 2026 from a deeper understanding of your own financials. Get in touch and we’ll be happy to help.

The post What Does 2026 Look Like for Contractors? first appeared on ICS Accounting.

These aren’t the only options for contractors. A contractor with a limited company working outside of IR35 can also use a PAYE payment model if they choose. Nonetheless, lately people have been comparing the two models specifically, so let’s take a look.

Tax Implications: PAYE vs. Umbrella

At the most basic level, under the agency PAYE model things are simple, with all of the responsibility falling on the agency that is engaging the contractor to make the correct deductions for income tax, National Insurance contributions (NICs), and workplace pensions. PAYE also provides full statutory benefits. Not all agencies offer this and you may work on multiple assignments with different agencies so you may prefer to choose an umbrella company.

An umbrella company becomes the employer, forming an additional level between the end client, agency and contractor. It can reduce administration for the agency, means you can work on multiple assignments with different agencies and with both options, you’ll need to ensure they’re operating compliantly.

That’s some reasons why which is better is so hotly debated – it doesn’t just depend on your own financial situation and plans.

If you’re also thinking about working through your own limited company, it’s particularly important to understand whether the role is inside or outside IR35, as that has significant ramifications for your final take-home pay.

Ease of Operation: PAYE vs. Umbrella

For the end user, a compliant umbrella solution can be simpler, reducing your administrative load; payroll, compliance, and benefits are processed by the umbrella solution itself. This is particularly useful for contractors carrying out many shorter-term assignments as it ensures you will remain compliant throughout with minimal extra work. You’ll receive the same statutory benefits as PAYE.

At the time of writing, of course, April 2026 isn’t far in the future – and at that point a number of reforms come in for umbrella tax obligations. There’s more detail in the linked article, but for the short version: you can expect to see fewer umbrella solutions available for a time, as the new legislation tightens requirements for umbrella companies. This is a positive move for contractors under umbrella solutions in general, but may mean some need to move to a more compliant Umbrella solution, such as ICS’.

One Question, Many Answers

In general, the guidance above should give you a rough idea of which solution is more likely to benefit you. However, every arrangement is different. If you’re not sure which option is best, please get in touch and we’ll help you put them both in perspective.

The post PAYE or Umbrella? first appeared on ICS Accounting.

Divide Your Time Well

As a contractor, some of your time has to go to each of the following:

• Paying work
• Finding paying work
• Administration
• Sleep
• Eating
• Free time

Eating is almost always the lowest amount of time. Depending on how many clients you contract to simultaneously and the length of those contracts, finding paying work may take up a significant chunk of time or next to none, averaged out day by day.

As much administration as is necessary to do your paying work compliantly and at a reasonable rate of return must be done; we hate to admit it but doing much more than that baseline can often be a form of procrastination.

Aside from that, the other categories fall into a balance based on your own intentions and reputation. Maximising the value you get from each of these, however, is where time management really shines.

Break Projects Down

Whether the project is ‘find a new client’, ‘secure the contract’, ‘update my accounts’, ‘chase payments’ or the paying work your client has asked you for, breaking it down into individual pieces makes life easier.

It can also help you better estimate how long a job will take. Most importantly, it helps you allocate your time. Starting out on a task you expect to take ten minutes when you have fifteen minutes before a client call is fine when your estimation was right; it’s when there turns out to be extra steps you breezed over that you have problems.

Now your momentum has halted a quarter of the way into an hour-long job so you can jump on the call; once you’re off that call, you’ll lose more time getting yourself back up to speed on what you’d been doing.

This problem is compounded if you’d booked that call, as many do, just before lunchtime. Now your afternoon plans are running behind before you even start.

Breaking projects down into smaller parts with individual deadlines allows steady, measurable progress. It also allows you to better assess your ongoing capacity, so you don’t take on contracts you shouldn’t and end up dealing with penalty clauses.

Variety is the Spice of Life

As much as possible, plan to change up the jobs you’re doing regularly. The shift from one task to a different type helps keep things fresh, which creates increased focus. That improved focus leads to better results – and it can also mean that individual tasks are achieved more quickly.

This does also mean there’s value to staking out ten or fifteen minute intervals in your day to enjoy some free time, keeping you refreshed for the next business task.

Track Time and Update Estimates

However you want to do it, it’s worth keeping an eye on your pace at different tasks, especially as you work with different clients over time. You might find that some tasks speed up as you get more practice, or that the same task takes wildly different times for two clients due to other complicating factors. Knowing how this works will make it much easier to keep pace.

Eliminate Unnecessary Time Sinks

If you can’t update your accounts quickly, efficiently, and accurately, should you be doing that yourself or would you be better off with a contractor accountant? If keeping up with the dunning cycle to receive payment for the work you’ve done takes up too much of your time, would an umbrella solution save you time?

Contractors don’t have to work solo, and sometimes bringing in experts to support you allows you to focus on what you do best. However you want to prioritise your time, businesses like ICS Accounting can give you more of it back. Get in touch today if you’d like to explore your options.

The post Time Management for Contractors first appeared on ICS Accounting.

As we work with a number of contractors and subcontractors who operate under the CIS, we thought it was worth taking a look at how tax obligations actually work within the scheme – including what you have to do to be paid correctly in the first place.

Registering for the CIS

If you qualify for the CIS as a contractor or as a subcontractor, you have to register with the scheme in order to take advantage of it. If you fulfil both roles, you must register as both.

You can register as a contractor if you pay subcontractors for construction work as a business, or if your business has spent more than £3million on construction work in a 12-month period since making your first payment.

Assuming your business is UK based, the process to register as a contractor is based on the process for setting up as a new employer. If the business is overseas but still carries out construction work in the UK, there is a different process, for which guidance can be found on the government’s own site.

Registration as a subcontractor requires you to submit:

• Your legal business name or trading name
• Your VAT Registration (presuming you are registered for VAT)
• The date you started trading
• Your business’ Unique Taxpayer Reference (UTR)

You may also need to provide other information if appropriate, including:

• A copy of a relevant Joint Venture Agreement
• The details of a registering partner, including UTR and National Insurance Number
• Your own National Insurance Number
• Your Company Registration Number

You can register online using your UTR or a Government Gateway user ID.

If you don’t yet have a UTR, you can create this by registering as a new business for Self Assessment. If you select ‘working as a subcontractor’ when the prompt comes up, you’ll register for both Self Assessment and CIS simultaneously.

What Work is Covered by the CIS?

As always with government schemes, there are specific definitions and exceptions to the work covered. Covering these fully is beyond the scope of this article, if you believe yours is an edge case we would recommend a specific consultation.

In general the CIS covers most construction work done to permanent or temporary buildings or structures.

Construction work is further defined, covering:

• Laying foundations
• Access works
• Demolitions and dismantling
• Alterations, repairs, and decorating
• Installing electricity, heating, lighting, ventilation and plumbing systems
• Building work
• A deep clean to the interior following completion of construction

There are some jobs within this which do not fit into the CIS, and if you only do these tasks you do not need to register.

These include:

• Scaffolding hire (but not scaffolding assembly or dismantling)
• Surveying
• Architecture
• Carpet Fitting
• Delivery of Material
• Any work on-site that can be clearly said not to be construction, including running canteens, managing site facilities, etc.

For the most part, while the edges of these definitions may be somewhat loose, we would expect that you’ll already know whether you fall into an exception or not but, again, if you’re in an edge case, do check!

The CIS 340 guidance issued by the government was recently updated if you’re unsure.

The Payment Process Under CIS

Make sure that you tell the contractor paying you the specific legal business name or trading name you used while registering for the CIS, and provide them with your UTR. These are used to verify your eligibility for deductions.

A contractor should pay you with deductions made at the standard 20% rate.

However, if you have not registered, if the business name they provide is not the one you registered with, or if they can’t verify you through your UTR, deductions must instead be made at the higher rate of 30% – a significant difference!

You will be provided with monthly statements of payments and deduction. You can use these to cross-check whether you still owe tax and/or National Insurance, whether everything is already correct, or whether you’re due a refund. If you have contractor accountants working for you, we will be able to deal with this for you.

What Does Not Receive Deductions?

Certain aspects of your invoice will not receive deductions. These are:

• VAT
• Consumable stores
• Plant hired for the job
• Manufacturing or prefabricating materials
• Materials you paid for directly

Evidence may be requested for material you directly paid for. The contractor will estimate this cost if no evidence is provided, so as always, we recommend you retain all receipts.

Gross Payment Status Under CIS

You can instead avoid deductions by applying for gross payment status when you register for the CIS. Under this status your contractor will make no deductions, and you take responsibility for paying all deductions in full at the end of the year.

If you operate as a contractor limited company, you will handle all deductions in your Corporation Tax return as you otherwise would.

Paying Tax and Claiming Deductions Under CIS

Responsibility for correct tax and NI payments remains with you, even if contractors have made deductions through the year. As a sole trader, you will need to send in your Self Assessment tax return as you would otherwise. There is a ‘CIS Deductions’ field to include those deductions contractors have made on your behalf. You should also submit the full amounts for each invoice, not the amount paid after deductions.

As a limited company, if you do not have gross payment status, you must claim your deductions back through your monthly payroll scheme, not through the Corporation Tax return – attempting to claim them this way may lead to a penalty, so be careful!

Instead, send your monthly Full Payment Summary to HMRC, along with an Employer Payment Summary (EPS) in which you should include your total CIS deductions for the year to date.

HMRC will then calculate the balance, taking your CIS deductions off what you owe in PAYE and National Insurance. The balance must be paid by the usual date – however, if your PAYE bill is at zero and there are still deductions to claim back, you can carry these forward to the next month or quarter, provided that you are still in the same tax year. You should note in this case that you have nothing to pay in your EPS.

If you have any further questions to ask about how the CIS affects you specifically, why not drop us a line and we’ll see what we can do to help?

The post Your Tax Obligations Under the CIS first appeared on ICS Accounting.

What you might not know is that there are also financial reasons to go sustainable, thanks to a range of green business tax incentives.

Understanding Green Business Tax Incentives

There is a surprising variety of different incentives which can make going green pay.

For example, if you’re installing energy-efficient equipment (LED lighting, insulation, and even some heating systems) through AIA or full expensing, you can claim 100% tax relief in the first year against capital allowances. Your equipment will need to meet HMRC criteria, but a reputable installer will already have looked into this and will be able to guide you in what is appropriate to your business and budget but also appropriate.

(You can also claim capital allowances when investing in renewable energy like solar power systems, but not through a specific green incentive. However, this can make the initial costs of installing the system more acceptable, and on average solar systems ‘earn out’ their costs for businesses in about four years, with another two decades plus of lifetime to save you money.)

It’s also worth talking to the British Business Bank about their Green Finance Initiatives, which can support you in a number of green endeavours depending on your eligibility.

Lastly, while few of our readers will qualify, if your business is particularly energy-intensive, you may qualify for the Climate Change Levy relief. This would involve committing to energy efficiency improvements and entering into a Climate Change Agreement – but if you’re already looking to improve efficiency, this is a way to make that easier.

Understanding Environmental Tax Incentives

As you would expect, you can qualify for environmental tax investments by taking actions to reduce environmental impact. This includes energy efficiencies, moving to EV (electric vehicle) fleets rather than traditional vehicles, implementing robust and effective recycling programs and even taking offices paperless.

The specifics of what targets need to be hit and how these can affect your corporation tax and local business rates will be too varied to be within the scope of this blog. If you are planning to improve your environmental impact, or if you have already done so this year, it’s worth talking to someone who understands the legislation about the specifics of your program to learn what it can do for you.

The government’s own information can be found here.

The post Tax Incentives for Sustainable Businesses first appeared on ICS Accounting.

The appeal of the contractor life is built around freedom, including the freedom to work where you choose. What you’ll need to remember as you start on your journey is that there’s plenty of responsibility to take on to go with it.

Key parts of that responsibility involve finances, from managing your finances to filing taxes in a way that’s fully compliant.

Follow our checklist below as you start out on your journey, whether you’re a contractor or self-employed starting a new business up, and you’ll be covered financially – compliant with legislation and able to manage your finances well from the off.

Choose Your Legal Structure

If you’re starting out as a small business, you might be a sole trader or a limited company. Contractors can also be sole traders, limited companies, or you can use an umbrella solution – which puts you into a legal structure as an employee.

Much has been said about the pros and cons of each, and we recommend you discuss this with an accountant as which option works best for you will vary significantly based on your specific plans and circumstances.

In brief, however, which you choose will affect your personal liability, how you get paid (and how much) and what your tax obligations are. You can see why it’s important to get this right!

Get Registered with HMRC

Registering with HMRC is a requirement for all businesses in their first year of trading, but depending on which model you chose, you might have a little more time.

A limited company must be registered with Companies House and signed up for Corporation Tax, and this should be done before the first payday – and yes, that’s true even if the only person you’re paying is yourself!

On the other end, you can’t register more than two months before the first payday.

As a sole trader, you should be registered before October 5^th in your first tax year. You’ll want to register for self-assessment and for Class 2 NICs (National Insurance Contributions).

These are the first deadlines that you can be penalised for missing, so make sure you hit them. Set reminders ahead of each other deadline you’ll have to file for – tax returns, etc. – to ensure they’re done and done correctly. We recommend this even if you’re keeping your records up to date, for peace of mind.

For example, your income tax Payments on Account will be due on January 31^st and July 31^st each year.

Organise Your Business Finances

Even if you’re a sole trader and your financials are inextricable from those of your company, we recommend setting up a business bank account. It’s useful to keep your finances as well separated as possible, and it makes it much easier to record business incomings and outgoings when they’re the only things associated with a single account!  You can always transfer money back into your operating account in the event you need to, but keeping clear what money is spoken for by your business and what money isn’t can help you avoid getting into that trouble to begin with.

If your business is a limited company, of course, having a separate bank account is a legal requirement.

Set Up Accounting Software

If you take away only one thing from this blog, let it be this: Don’t trust your finances to Excel or Google Sheets. While these programs are great at the things they’re designed to do, it’s easy for an error to be made just once and have done huge damage by the time that error is discovered.

If you’re working with an accountant, you may have access to cloud accountancy software as part of the package. Being able to access everything directly, wherever you are, can be a huge benefit.

Even if you’re not, there’s good reason to get familiar with accounting software from the off as Making Tax Digital phases in for sole traders and landlords earning over £50,000 annually in April 2026. More on this below.

Know Your Tax Obligations

By this we don’t necessarily mean you should keep up to date with all legislation and rulings affecting your tax (although someone involved in your accounting process should be!) but you should have enough information to be able to approximate your rough tax obligations and keep that separate from your operating expenses.

Know Your Tax Reliefs

Just as it’s important to know how much you’ll owe, it’s also important to have a good idea of where tax reliefs and expenses can help lighten the load.

Travel costs, capital allowances, and many other outgoings have reliefs associated with them, but of course it’s not quite as simple as that; there are limits to how much can be claimed. The field of expenses is a thorny one and well beyond the scope of this blog, so we will simply recommend you discuss this with an expert to be sure.

Making Tax Digital

The government’s Making Tax Digital program has been in the works for some time. With the new tax year starting in April 2026, sole traders and landlords earning over £50,000 will need to comply with this initiative.

This means your bookkeeping will need to be digital, with quarterly updates submitted only using MTD-compatible accounting software.

Those making £30,000 or more will follow on the next tax year, and most businesses are already following these guidelines.

Appropriate software does have the additional benefit of making bookkeeping much simpler for your business’ own requirements.

Schedule Time to Plan for the Future

One of the biggest advantages of self-employment is that building your brighter future is entirely in your hands, and one of the biggest advantages of accurate, ongoing bookkeeping is that it gives you the information you need to plan your business’ future.

We recommend combining these facts and regularly taking the time to consider how you can build what you’re doing for the future.

If you have any other questions, please just let us know. We’ll be happy to help.

The post Your Self-Employment Checklist for 2026 first appeared on ICS Accounting.

Any of the above (and many others) can affect your cash flow, potentially reducing profit margins. Changes to tax legislation can also affect you, potentially significantly changing your tax liability.

If an unexpected negative factor combines with a seasonal downturn in business or some other major challenge, this can have significant economic impacts.

All of this makes it important to plan for the future. Sound financial planning, especially if carried out alongside an expert accountant who can anticipate some of these challenges, allows you to build a financial resilience into your business.

Staying Liquid by Managing Cash Flow

We’ve all heard the horror stories where businesses with high valuations found themselves caught out by too little liquidity; unable to meet their expenses in a timely fashion, needing to sell assets or borrow against them, creating bigger financial challenges in the long-term for short term survival.

Cash flow is that short term buffer, but for the self-employed, it can also be the way you stay afloat in slow months. Any unnecessary borrowing should be thought of as long-term extra cost to your business, and the best way to avoid it is to stay liquid, ready for a rainy day.

However, there’s such a thing as being too liquid; just as borrowing to solve a short term problem creates new long-term costs, keeping too much money aside in case of emergency means you’re not investing in the business at the same rate, which can slow down development. It also represents money that isn’t being drawn off to pay yourself.

So how big should your rainy day fund be?  Again, the answer to that question is best determined through careful financial planning. The amount to set aside may even vary at different points in the year, especially if you know (for example) that March and April tend to be quiet months for you, or if you’re working with a client you know tends to take longer to pay their invoices.

Making Your Financial Plans

You should already be maintaining scrupulous business accounts.

One of the reasons for this is to help predict the liquidity levels you’ll need to maintain, along with helping you to understand what investments could be valuable and which are likely to cost more than you get in return. It can also be helpful to fully understand ongoing operational costs when you’re not sure whether a particular contract is worth accepting; if the profit value would be marginal to none once costs are factored in, some contracts can actually hurt your financial position to accept.

Keeping these records up to date means you always have the clarity you need to react quickly when necessary. Flexibility is a key part of successful financial planning.

Expert Insight

We mentioned earlier that having an expert accountant support your financial planning is a must. It’s not just about making sure you get the numbers right, it’s also about a second pair of eyes helping to interpret what those numbers mean.

Too many self-employed individuals have run into trouble because they mistook a bad investment as an opportunity for growth, or failed to take into account how a change announced in the Budget would affect them.

At ICS Accounting, we want to give all our customers the support they need to grow successfully. Contact us to start your discussion.

The post Planning for the Future as a Contractor first appeared on ICS Accounting.

For businesses with hybrid and especially with fully remote workers, this has an impact on the process of payroll.

For the most part, these impacts are straightforward, but if your payroll people aren’t aware that they need to be taken into account, these aren’t addressed – and that can lead to compliance issues down the line.

Worker Diversity

If we set aside the question of ‘Inside IR35’ contractors for the time being, employees and contractors can be assumed to have very different tax, pay, and benefit profiles, meaning that they need to be handled differently in payroll for the employer to remain compliant. It’s easy to overlook, but location can also affect payroll in a number of different ways.

Taking a relatively common example:

If an English company employs a member of staff based in Scotland on a remote arrangement, that employee will be paying the Scottish tax rate rather than the English. So far, fairly obvious – you only need to know that the Scottish rate is different. (Tax codes are the same except for the S prefix).

However, there can be another wrinkle. There is no legal requirement to follow either the English or Scottish bank holidays, but obviously one set will have to be chosen. This obviously has knock-on effects on hours worked in a given month. (And potentially knock-on effects for scheduling!)

To go into the full range of possible challenges, especially as some employees or contractors might live or work overseas, is obviously beyond the scope of this blog, but whatever the situation, it will need to be taken into account, and this should be done by people who are already familiar with relevant legislation and other regulations.

Hybrid Benefits & Payroll

Commuter subsidies and work-from-home allowances are often offered by businesses with a hybrid workforce. As these brush up against expenses, they have tax implications, and in some situations these may be complex enough to be time-consuming. For a large enough business, this can mean payroll takes longer to run each month, or that external experts – like our outsourced payroll service – need to be brought into play.

Futureproofing Payroll

Above, we’ve pointed out a number of potential stumbling blocks that remote or hybrid work can create in payroll – but that doesn’t mean there aren’t benefits too, and those may well have more value to you than avoiding these added complexities.

Making sure those responsible for your payroll are aware of these challenges and understand how evolving legislation can affect them means your business is prepared for whatever comes in the future.

To discuss this further and identify the best solution for you, why not drop us a line? We’ll be happy to discuss the specifics relevant to your business.

The post Payroll and Remote or Hybrid Workers first appeared on ICS Accounting.

So what’s the goal of this legislation, what will it do, and what do the changes mean for contractors who are paid through umbrella solutions? Let’s break it down.

Why Reform Umbrella Tax Measures?

Over the past several years, a pattern of activity has been identified among the less reputable umbrella companies. These activities are not compliant with PAYE tax legislation, as a result of which the umbrella company can increase its profitability or offer its services (to recruitment agencies, etc) at a lower rate, becoming more competitive.

Currently, HMRC’s approach to tackling this can result in the contractor receiving an unexpected tax bill when this is discovered, even though the contractor didn’t intend to avoid PAYE and (especially if they’re not familiar with tax calculations themselves) may not have known their pay was off.

As a result of this, many contractors under these umbrella companies have had to break into savings, change plans, or find the money to pay this tax, creating unnecessary stress and placing them in a worse financial situation than they could have expected using another payment solution.

In recent times, HMRC have begun using data analysis to identify contractors whose first two months of umbrella payments suggest they may have been placed into a tax avoidance scheme and alerting them, helping them to exit the umbrella company before the tax bill grows larger.

In addition, they’re also prosecuting companies that follow these practices, but to quote their own notes on this reform, “the ease with which new umbrella companies can be created means that the individuals behind these non-compliant structures can quickly establish new ones”.

As such, the upcoming reforms look to also incentivise businesses using umbrella companies in their supply chain (including recruitment agencies) to choose more reputable umbrella solutions like ICS.

What Do the Reforms Do?

The updated measures implement JSL (Joint and Several Liability) for umbrella company PAYE incidents.

For contractors, the good news is that any surprise tax bill from these non-compliant practices will no longer be placed fully on the contractor but may also be divided across the agencies and end clients.

Those of you working under the ICS Umbrella solution will see no change to your pay and taxes, as we are already operating a compliant model. In fact, we use the service SafeRec, which verifies payslips. That allows both agency and worker to see their payslip is compliant, giving them peace of mind.

However, if you notice reductions in your take-home pay through another umbrella company following April 6^th, you may have been paid through what’s known as ‘disguised remuneration’ by a non-compliant agency.

We anticipate seeing increased vetting of umbrella companies in the near future, too, especially with agencies or end clients who operate preferred supplier lists.

In the short-term at least we would expect the number of umbrella companies on the market to drop, with most but not all of that decline being from non-compliant companies. This will mean overall better performance by umbrella companies, but for individual contractors this may necessitate switching providers, which carries with it other administrative burdens.

We would also expect that some agencies and end clients may become less comfortable working with umbrella companies in general, meaning contractors may want to create limited companies or investigate PEO (Professional Employer Organisation) solutions instead.

If you have any questions, want to investigate alternative options, or would like to switch to ICS Umbrella ahead of the change, please get in touch.

The post Understanding the Coming Umbrella Tax Reform first appeared on ICS Accounting.

This is an attempt from Companies House to clamp down on fraud to improve the reliability of the data in their systems. This is a new legal requirement to be able to prove that you are who you say you are and will deter people attempting to use companies for illegal purposes.

Companies House have already been encouraging people to voluntarily register their identity with them and has been seen as a quick, easy and free of charge service. You may have already had emails from them regarding this.

Not all companies want to do this themselves though, and are instead looking to use an Authorised Corporate Service Provider (ACSP), such as their accountant. There are strict guidelines on how you can become an ACSP, such as the firm being supervised by a UK Anti-Money Laundering (AML) supervisory body.The good news is that we expect to be registered as an ACSP shortly, at which point we’ll be able to assist.

What does this mean for you?

This means that you have several options for verifying your identity with Companies House.

Option 1: You can do this directly with Companies House yourself and will not incur a cost. There are clear guidelines and information on what you need to do / what you will need on Companies House here.

Option 2: As we will shortly be registered as an ACSP we can send you an invitation to complete an online identity check using a government-certified identity service provider (IDSP). This will enable us to ensure you have completed the sufficient checks for Companies House. There is a small fee of £40 plus VAT for this to be completed. The electronic identity check requires you uploading your ID documents and conducting a live “selfie”.

Option 3: We can complete the check in person with you if you visit one of our practices. The fee for this is £75 plus VAT.

Important: whichever method you choose, you must ensure that you provide us the code you are given. If we don’t have your code we will not be able to file documents at Companies House for you (such as annual accounts, annual confirmation statements etc).? If we are unable to file documents on your behalf, then the company will be liable to late filing penalties. 

What do I need to do? 

You need to choose one of the above-mentioned options to verify your identity. We suggest doing this as soon as you can. There is a grace period for existing companies and directors, however as detailed above – failure to be identified could result in delays and/or late filing penalties.

If you have any questions, please email your accountant or call us on 01524 580720.

The post An Important Message for Limited Company Owners first appeared on ICS Accounting.