FAQ
Common questions
Answers to the questions contractors ask most often — about tax, switching accountants, and how working with us works in practice.
Tax & Compliance
Tax questions
For 2026/27, a salary around £12,570 — broadly the personal allowance level — is the recommended starting point for most one-director companies. The employer's National Insurance secondary threshold has fallen to £5,000, so salary above this incurs employer's NIC at 15%. However, the corporation tax relief on the additional salary (deductible at up to 26.5% in the marginal relief band) generally outweighs this NIC cost, which is why £12,570 typically remains more efficient than capping salary at £5,000. Above your chosen salary level, dividends are usually the more efficient route — taxed at 10.75% within the basic rate band for 2026/27, rising to 35.75% above the higher rate threshold. See our full salary vs dividends guide.
You must register once your rolling 12-month taxable turnover exceeds £90,000 (2026/27 threshold). But many contractors benefit from voluntary registration even below this — if your clients are VAT-registered businesses, they can reclaim the VAT you charge, so it costs them nothing. You meanwhile reclaim input VAT on your business costs. Whether to use the Flat Rate Scheme or standard VAT depends on your specific cost profile — see our VAT guide for the full breakdown.
IR35 (the off-payroll working rules) is legislation designed to ensure that contractors who work like employees pay similar tax to employees. The key factors are your working practices — how much control your client has, whether you can send a substitute, and whether there's mutual obligation of work. Working remotely, using your own equipment, and operating across multiple clients generally indicates lower risk. We provide IR35 awareness guidance within Standard and Premium packages and refer to specialist contract reviewers when needed. Read our full IR35 guide.
If your director's loan account is overdrawn at your company year-end and isn't repaid within 9 months, your company faces an S455 tax charge of 35.75% of the outstanding balance for 2026/27 (this rate is aligned with the higher dividend tax rate, and increased from 33.75% in 2025/26). This is significant and avoidable. If the loan exceeds £10,000 at any point during the tax year, a benefit-in-kind must also be reported on a P11D. We monitor director loan balances proactively throughout the year and flag issues before they crystallise.
HMRC requires limited companies to retain financial records for at least 6 years from the end of the relevant accounting period. In practice, this means invoices, receipts, bank statements, payroll records, and dividend vouchers/board minutes for any dividends declared. Using FreeAgent from the start makes this straightforward — receipts can be photographed and attached directly to transactions as they occur.
Switching Accountants
Onboarding & switching
Switching is straightforward and we handle most of the process. As part of professional ethics, we'll write to your current accountant requesting "professional clearance" — essentially confirming there's no reason we shouldn't act for you, and requesting handover information (accounting records, tax reference numbers, outstanding matters). You don't need to have an awkward conversation with your existing accountant — we manage that communication directly. Most switches can align with your accounting year-end for a clean handover, but mid-year switches are also common and manageable.
No — FreeAgent is our primary platform. If you already have it (which many contractors do for free via NatWest, RBS, Mettle, or Starling), we'll connect as your accountant directly and work within your existing setup. No migration, no disruption. If you don't have FreeAgent yet, we'll recommend the best route to get it and help you set it up from scratch.
At onboarding we'll ask for: proof of identity and address (required by law for all UK accountants), your company registration details, access to your FreeAgent account (or help setting one up), and authorisation to act as your agent with HMRC and Companies House. We'll guide you through each step — most of it can be completed digitally within a day or two.
Yes, though catch-up work for historical periods is treated as a separate, one-off project quoted independently of your monthly package. We'll work through bank statements and available records to reconstruct your accounts, file any overdue returns, and get you onto a clean monthly footing going forward. The sooner this is addressed, the lower any late filing penalties will be — so it's worth flagging at your discovery call.
Working Together
How we work
Yes. Get in touch and we'll arrange a free 30-minute discovery call. This call is no-obligation — a chance to discuss your situation, ask questions, and confirm the right package for your needs.
We're a remote-first practice, so all communication is via email and video call by default. This keeps costs down (reflected in our fixed fees) and means quicker turnaround — no need to coordinate diaries for travel. If there's a specific need for an in-person meeting, get in touch and we can discuss options.
Response times vary by package. The Standard package carries a 1 business day acknowledgement SLA; Premium a same-day acknowledgement SLA. Essentials is answered within standard working hours, typically within 2 business days. In all cases, SLAs refer to acknowledgement of your query — full responses are provided as soon as reasonably practicable. Routine compliance work (filings, returns) is scheduled proactively ahead of deadlines — you won't need to chase these.
Brief email queries are always included — that's part of the value of a fixed monthly fee. If a question develops into a substantial piece of advisory work (for example, modelling a company restructure or reviewing a complex contract), we'll let you know upfront and provide a separate quote before proceeding. You'll never receive a surprise bill for a conversation.