Am I inside or outside IR35 as a Surrey contractor?
IR35 status depends on the working practices of each engagement, not the contract paperwork alone. Key tests are mutuality of obligation, substitution, and control. Since April 2021, medium and large clients determine status for their engagements; small clients leave it to the contractor. A specialist contractor accountant should review each new engagement with you.
Should I trade through a limited company or an umbrella?
If your engagement is outside IR35, a limited company is usually 15–25% more tax-efficient. If you're inside IR35 on most engagements, an umbrella avoids the running costs of a company. Some contractors use both — a limited company for outside-IR35 work and an umbrella for inside-IR35 contracts.
What expenses can I claim as a limited company contractor?
Wholly, exclusively and necessarily for the business: accountancy fees, business insurance, equipment, software, business mileage at 45p/mile (first 10,000), business phone, training relevant to your current trade, and pension contributions from the company. The 24-month rule restricts travel to a single workplace once it's expected to last more than two years.
Do I need an accountant or can I use online software?
FreeAgent and similar platforms make day-to-day bookkeeping straightforward — but you still need someone to file accounts at Companies House, submit the CT600, run payroll, advise on dividends and review IR35 status. The fixed monthly fee at a contractor specialist usually includes both the software licence and the advice.
What happens to my company if I take a permanent job?
You can keep the company dormant (file annual confirmation statement and dormant accounts), pay yourself remaining reserves as dividends over future tax years, or strike it off through a Members' Voluntary Liquidation to qualify for Business Asset Disposal Relief if reserves are over £25,000. Your accountant will recommend the most tax-efficient option.