News

Executive Pensions

Firstly, an Executive Pension is a one member Occupational Pension Scheme or Company Pension Scheme for an individual employee or director. An Executive Pension is allowed to accept/make pension contributions from the company i.e. an employer contribution. Employee contributions to an Executive Pension are also possible. Employer contributions can be written off fully as a tax deductible expense in the P&L (profit & loss) account. In other words it can be written off for Corporation Tax & Income Tax/USC/PRSI Tax at source each year and there is an option to fund to provide for back service. Depending on your personal circumstances a company could pay in higher levels of pension contributions into an executive pension than a normal self-employed pension.

If you are Self Employed you can contribute up to the limits below and claim tax relief, subject to a Salary Cap of €115,000.

The same limits apply to employee contributions to a company/executive pension scheme.

AGE % Salary
<30 15% 30-39 20% 40-49 25% 50-54 30% 55-59 35% 60 & Over 40% For example if you have a Salary of €60,000 and are aged 42 you can contribute €15,000 (25% x €60,000) per annum into a pension fund and get full income tax relief against your marginal/higher rate of tax. From 2018 the Tax Band for 20% Income Tax is €34,550. Therefore pension contributions on a Salary over that amount are subject to income tax relief at 40%. There is no PRSI or USC relief on employee pension contributions to an occupational pension scheme. It is a condition of approval for a scheme or executive pension scheme by revenue that the employer must contribute a meaningful contribution to the Scheme. Meaningful normally means not less than 10% of the total contributions between the employer and employee. The amount an Employer can contribute to an Executive Pension Plan for an employee is dependent on a maximum funding test. In general, if you have 10 years or more of service with an employer, the employer can make contributions that could buy a pension income for you of up to 2/3rd of Final Salary as an income for life. To determine the maximum annual contribution that can be made by an employer the following factors/variables are needed to complete the calculation; 1. Date of Birth. 2. NRA (Normal Retirement Age) 3. Term to Retirement 4. Marital Status 5. Annual Salary 6. Existing Pension Funds 7. Interest Rates 8. Annuity Rates 9. Growth Rate to NRA

News

Budget 2018

Budget-2018.pdf (1 download)

Budget 2018

Introduction
Budget 2018 was announced on 10 October 2017. This document sets out the main changes in the areas of taxation, social welfare, health, housing, education, employment and other areas. It is an overview and not a complete statement of the measures announced in Budget 2018.

Some of the changes announced in the Budget come into effect immediately. Others take effect from the beginning of January 2018 or later in 2018. Many others have to be finalised before coming into effect.

Some elements of these measures may change when the legislation required to bring them into effect is enacted.

For a full list of the Budget changes that were announced, please see the Department of Finance and Department of Public Expenditure and Reform website, budget.gov.ie.

Taxation

Income tax
• The standard rate income tax band for all earners is increasing by €750. This means, for example, an increase from €33,800 to €34,550 for single individuals and from €42,800 to €43,550 for married one-earner couples (January 2018).
• The Home Carer Tax Credit will increase from €1,100 to €1,200 (January 2018).
• The Earned Income Tax Credit will increase from €950 to €1,150. This is relevant for taxpayers earning self-employed trading or professional income in certain cases and for business owner/managers who are ineligible for a PAYE credit on their salary income (January 2018).
• Mortgage interest relief is being extended for remaining recipients (owner occupiers who took out qualifying mortgages between 2004 and 2012) on a tapered basis. 75% of the existing 2017 relief will be continued into 2018, 50% into 2019 and 25% into 2020. The relief will cease entirely from 2021.

Universal Social Charge (USC)
Incomes of €13,000 or less will continue to be exempt from USC in 2018. Once your income is over this limit, you will pay the relevant rate of USC on all of your income as follows:

• €0 to €12,012 @ 0.5%
• €12,012 to €19,372 @ 2%
• €19,372 to €70,044 @ 4.75%
• €70,044+ @ 8%

Medical card holders and individuals aged 70 years and older whose aggregate income does not exceed €60,000 will now pay a maximum USC rate of 2% (January 2018).

Excise Duties

Tobacco Products Tax
The excise duty on a packet of 20 cigarettes increased by 50 cents (including VAT) with a pro-rata increase on other tobacco products, and an additional 25 cents on roll-your-own tobacco. This took effect from midnight on 10 October 2017.

Sugar Tax
A tax on sugar sweetened drinks is to be introduced on 1 April 2018. The tax will apply to sugar sweetened drinks with a sugar content between 5 grams and 8 grams per 100ml at a rate of 20c per litre. A second rate will apply for drinks with a sugar content of 8 grams or above at 30c per litre.

Benefit in Kind on Electric Vehicles
A 0% benefit-in-kind (BIK) rate is being introduced for electric vehicles for a period of 1 year. This will allow for a comprehensive review of benefit in kind on vehicles which will inform decisions for the next Budget. Electricity used in the workplace for charging vehicles will also be exempt from benefit-in-kind (1 January 2018 to 31 December 2018).

Social Welfare
The total social protection budget in 2018 will be €20 billion.

Increases in social welfare payments
Weekly social welfare payments will increase by €5 per week with proportional increases for qualified adults and those on reduced rates of payment (see rates table below). This also applies to employment programmes such as Community Employment (CE), Tús and the Rural Social Scheme (from week beginning 26 March 2018).

• Those aged 26 and under who are getting a reduced rate of Jobseeker’s Allowance will receive the full €5 increase (from week beginning 26 March 2018).
• The weekly rate for a qualified child will increase by €2 from €29.80 to €31.80 (from week beginning 26 March 2018).
• State Pensions will increase by €5 per week with proportional increases for qualified adults and those on reduced rates of payment (from week beginning 26 March 2018).

Working Family Payment
Working Family Payment (formerly called Family Income Supplement) income thresholds will increase by €10 for families with up to 3 children (from week beginning 26 March 2018).

Back to Work Family Dividend
The Back to Work Family Dividend scheme which aims to support families to move from social welfare to employment, and which was due to end on 31 March 2018, will now be retained.

Fuel Allowance
The Fuel Allowance season will be extended by 1 week, from 26 to 27 weeks, into the first week of April 2018.
Free Travel Scheme
An additional €10 million in funding is being provided towards the Free Travel Scheme.

Christmas Bonus
A Christmas Bonus of 85% will be paid in December 2017 to people getting a long-term social welfare payment (minimum payment of €20).

Telephone Support Allowance
A new Telephone Support Allowance at a weekly rate of €2.50 will be introduced for those getting the Living Alone Allowance and who are eligible for the Fuel Allowance (June 2018).

One-Parent Families
The earnings disregard for the One-Parent Family Payment and the Jobseeker’s Transition payment will increase by €20 per week, from €110 to €130 per week (March 2018).

Rural Social Scheme
The number of places on the Rural Social Scheme will increase by 250.

School Meals Programme
An additional €1.7 million is being provided towards the School Meals Programme for newly designated DEIS schools.

Youth Employment Support Scheme
A new Youth Employment Support Scheme will be introduced in 2018 to support long-term unemployed young people back into the workplace.

Housing, Employment and Business, Education and Childcare

Housing
A total of €1.83 billion is allocated to the Department of Housing, Planning and Local Government for housing in 2017.

Social Housing Support
• An increase of €31 million has been allocated to the Social Housing Current Expenditure Programme, bringing the total to €115 million. Local authorities and approved housing bodies are to build approximately 3,800 new social houses in 2018.
• From 2019, an extra €500 million will be provided for the direct building programme, to build an additional 3,000 social houses by 2021.
• Funding for the Housing Assistance Payment (HAP) scheme is increasing by €149 million to €301 million. This will provide for an additional 17,000 households to be accommodated under HAP in 2018 and support the nationwide rollout of the HAP Place Finder Service for people who are in emergency accommodation.
• Funding of €134 million is allocated to the Rental Accommodation Scheme (RAS) to provide for an additional 600 new transfers under the scheme, as well as the ongoing cost of households already supported under RAS.
• Funding of €32 million is allocated for the Repair and Leasing Scheme, which is expected to deliver 800 vacant properties for social housing.
• Funding of €12 million is allocated for a range of Traveller-specific accommodation schemes, to deliver 110 homes in 2018.
• The energy efficiency programme for social homes receives funding of €25 million to improve a further 9,000 homes.

Supports for Homeless People
• The current allocation for homelessness services is increased by €18 million, to over €116 million.
• It is intended that there will be 3,000 exits from homelessness in 2018.
• As part of the development of the Family Hubs programme, 6 new facilities are due to become operational by the end of 2017. An additional €18 million is provided for this programme in 2018.

People in Mortgage Arrears
An extra €5 million is provided for the mortgage to rent scheme, bringing its funding to €22 million for 2018.

Housing Tax Reliefs
Mortgage Interest Relief, which only applies to mortgages taken out by 31 December 2012, was due to end on 31 December 2017. It will now be retained, on a tapered basis, for remaining recipients – owner occupiers who took out qualifying mortgages between 2004 and 2012. 75% of the existing 2017 relief will be continued into 2018, 50% into 2019 and 25% into 2020. The relief will cease entirely from 2021.

A gradual reduction in Rent Tax Relief was announced in Budget 2011. From 2018 onwards, this relief will no longer be available.

Housing Finance
Up to €750 million of the Ireland Strategic Investment Fund is being made available for commercial investment in housing finance. These funds will be made available to a new entity, to be known as Home Building Finance Ireland (HBFI), which will increase the availability of debt funding on market terms to commercially viable residential development projects.

Measures to Encourage Supply of Land for Housing
A new scheme is being introduced to refund stamp duty on property transactions in respect of commercial land bought for the development of housing. To avail of the refund scheme, developers will have to start the relevant development within 30 months of buying the land.

A Vacant Site Levy will be charged from 2019 on lands that are suitable for housing but are not being developed. A levy of 3% will apply in 2019, as already planned. The rate will now increase to 7% in the second and subsequent years.

At present, property owners can get full relief from Capital Gains Tax if they retain qualifying assets for 7 years. This period is being reduced to 4 years.

A new, time-limited tax deduction for pre-letting expenses is being introduced to encourage owners of vacant residential property to bring it into the rental market for a minimum period of 4 years. The property must have been vacant for at least 12 months to qualify. A cap on allowable expenses of €5,000 per property will apply. This relief will be available for qualifying expenses incurred up to the end of 2021. It will be subject to clawback if the property is withdrawn from the rental market within 4 years.

Affordability
An Exchequer allocation of €75 million is provided for a second phase of the Local Infrastructure Housing Activation Fund, which accelerates the provision of public infrastructure to support the development of sites for private housing in urban areas. The fund will also support the delivery of affordable housing on land owned by local authorities, using co-operative housing and similar models.

Remediation, Adaptations and Regeneration
• Funding of €30 million is allocated for the remediation of a further 430 houses affected by pyrite.
• Funding for housing adaptation grants is increased to €53 million to enable up to 11,000 home adaptations for people with disabilities and older people.
• The National Regeneration programme will receive funding of €61 million.

Private Rented Housing
The Residential Tenancies Board (RTB) receives €7 million in funding to reflect its expanded role and commitments under the Strategy for the Rental Sector, including increased inspections of rented accommodation.

Employment and Business

National Minimum Wage
The national minimum wage will increase from €9.25 per hour to €9.55 per hour (from 1 January 2018).

Key Employee Engagement Programme (KEEP)
An incentive is being introduced to facilitate the use of share-based remuneration by small and medium-sized enterprises (SMEs) to attract key employees. Gains arising to employees on the exercise of KEEP share options will be liable to Capital Gains Tax on disposal of the shares, in place of the current liability to income tax, Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) on exercise. This incentive will be available for qualifying share options granted between 1 January 2018 and 31 December 2023.

Earned Income Tax Credit
The Earned Income Tax Credit will increase from €950 to €1,150. This is relevant for taxpayers earning self-employed trading or professional income in certain cases and for business owner/managers who are ineligible for a Pay As You Earn (PAYE) credit on their salary income.

Stamp Duty
• The rate of Stamp Duty on non-residential property increased from 2% to 6% from midnight on 10 October 2017.
• A new scheme is being introduced to refund stamp duty on property transactions in respect of commercial land bought for the development of housing. To avail of the refund scheme, developers will have to start the relevant development within 30 months of buying the land.
• Consanguinity stamp duty relief for family farm transfers is being maintained at 1% for a further 3 years.
• The exemption for young trained farmers from stamp duty on agricultural land transactions continues.

Brexit Loan Scheme
A new €300m Brexit Loan Scheme will provide affordable financing to Irish businesses that are either currently impacted by Brexit or will be in the future. A loan scheme of up to €300m will be made available to small and medium-sized enterprises (SMEs), along with large firms employing fewer than 500 people, to help with short-term working capital needs.

VAT Rate
The VAT rate on the tourism and services sector remains unchanged.

Education

Primary and Post-Primary Schools
• There will be an additional 1,280 teaching posts in schools in September 2018.
• In addition, a further 1,091 Special Needs Assistants will be recruited, bringing the total number to over 15,000.
• €2 million is provided to start a pilot in-school speech and language therapy programme.

Higher and Further Education
• There will be 6,000 new apprenticeships and 10 new apprenticeship schemes in 2018.
• 1,000 additional Springboard places will be introduced.
• 2,100 extra places will be provided in higher education to cater for demographic growth.

Child and Family Support

Early Childhood Care and Education Scheme (ECCE)
• From September 2018, ECCE will be extended from the current average of 61 weeks to give an entitlement of a full two years (76 weeks) of care and education.

Tusla
Additional funding will allow Tusla to recruit staff to facilitate the introduction of mandatory reporting and to make improvements to the out-of-hours social work services.

Health and Environment

Health
• From 1 January 2018, the prescription charge for medical card holders under the age of 70 will be reduced from €2.50 per item to €2 per item. The monthly cap will be reduced from €25 to €20.
• The monthly threshold for the Drugs Payment Scheme will reduce from €144 to €134, from January 2018.
• A new primary care fund will support the development of GP services, the expansion of community intervention teams and the hiring of more Occupational Therapists.
• Additional funding is provided for day services for school leavers with disabilities.
• An additional €35 million will be provided for mental health services in 2018.
• A tax on sugar-sweetened drinks will be introduced from April 2018. The tax will be 30 cent per litre on drinks with over 8g of sugar per 100ml, with a lower rate of 20 cent for drinks with between 5g and 8g per 100ml.
• VAT on sunbed services will increase from 13.5% to 23%.

Environment
• An additional €35 million is provided to expand energy efficiency programmes in the residential, commercial and public sectors.
• Funding of €7 million is allocated to roll out the Renewable Heat Incentive Scheme.
• Funding of €10 million is allocated to increase uptake of electric vehicles.

Reference: http://www.citizensinformation.ie/en/money_and_tax/budget_2018.html

News

Accounting Pro Site Features

Updates and Changes to the Website

In the last month, the Accounting Pro (Irl) website has undergone several subtle changes. This is meant to improve our clients experience and interactions with Accounting Pro. Once these changes have been completed and finalised, these improvements will be mirrored on the Accounting Pro (UK) site.

Browser Notifications

One noticeable change is the in-browser update feature. Users can choose to receive notifications from Accounting Pro, directing them to the site, when a change has been made to the site or our services. Users also have the option to unsubscribe if they wish.

Accounting Pro Live Chat

It was decided that a live chat feature would be a useful tool to interact with clients and leads. Like the notifications feature, it was as simple as downloading and configuring a WordPress plugin.

Irish Tech News Podcast

WordPress allows for considerable extension of each site to expand on offerings to Clients. It could also serve as a means of marketing to clients and leads. It could also serve as a means of marketing to Clients, both existing and potential Clients.

Timesheets and Expense Uploads

A new feature allows clients to upload their weekly timesheets and expenses.

News

Accounting Pro and Irish Tech News

In September of this year Kevin, was interviewed by Simon Cocking from Irish Tech News. See the interview below or visit Irish Tech News: http://irishtechnews.ie/business-showcase-accounting-pro-ireland/

BUSINESS SHOWCASE : ACCOUNTING PRO IRELAND

By @SimonCocking

Describe the company – the elevator pitch …

We are Accounting Pro Ireland and we offer accounting services for contractors, startups & SMBs offering Umbrella PAYE, Limited companies & general accounting, tax & payroll services. Just like you have software as a service we offer accountancy as a service and can allow outsourcing of finance related tasks for the individual or company. It’s a pay as you go, low cost, high quality, and personal service – everything the busy contractor, SMB and Startup needs from an accounting provider.

How are you different?

We are uniquely placed as, as a former contractor with many years experience at home and abroad, I know what it is like to work in the field – I have used Umbrella services both home and abroad, I know the challenges and coupled with the fact that I know the market and as a former business analyst we have been able to build a product and a service based on the requirements of contractors and what they need from their Umbrella service. As well as that, we have priced the product at a very competitive rate (lowest in the national market) while not compromising on quality and a personal service model. We also supply alot of free add-ons like mortgage advice, pension and health care advice. We also help with banking, insurance and any other relevant areas we can help with.

Why will the company/product do well?

It is structured to put the customer, the Contractor/startup first in terms of what it provides. It is a low cost, high quality and personal service.

Where are you based?

We have an office in Cork, I have a home office in Limerick (which helps as we have a 2 year old, my partner has her own business and we have another baby due in 2 weeks) and we have an office in London.

When was the company launched?

November 2016.

What have been your biggest wins to date?

We have won the national contract for a global resourcing company – beating all the long established competitors in the tender process. We have also been winning contractor business from existing providers. We have taken on startups and are helping them with their accounting and payroll needs – it is very exciting to be able to help them out especially tech startups. Finally, we have started Accounting Pro UK and we are started to take on clients there.

What type of people (market segment) are you trying to attract to your product?

Contractors/freelancer, startups and SMBs primarily in the IT space but also in the pharma, banking, medical industries etc.

What tips would you give to others looking to build their business?

Do your research, meet other business in the area (if you can) and understand your market and make sure you provide what they need as opposed to what you want to provide.

Tell us about your team?

We have a team in Ireland and the UK. The Irish team is made up of IT, accounts, payroll, new business and social media. The UK team is Accounts and Admin. The team is Dan Sophie in the UK with their support team – myself, Mike, Damien, Jack and our support team in Ireland.

What are your long term plans for your product/company?

We plan to build out in Ireland 2017/2018 and take 10% of the market, build out the UK business in 2019 and then look to expand in other markets thereafter.

What are your favourite tech gadgets?

I am old school – my favourite tech gadget was a Palm Pilot I got in the US in 2000. I loved it!! I gave it to a pal eventually who used it to run diagnostics on his Japanese super car import.

What tech gadgets do you wish you could use to help you?

JP Morgan’s automated bot division – it automates alot of admin related functions – it would be so useful.

What drives you to do this?

I had a vision to provide a service in a market that I knew there was a lot of dissatisfaction in – people wanted a service that meets their needs – that’s a low cost, high quality and personal service. I am passionate about trying to help people out and determined that Accounting Pro will make a positive difference to their working lives.

Other question – what is the cost? We have the lowest fees in the market – 90 euros for a PAYE Umbrella and 130 for a private Limited company.

How do people get in touch with you?

You can call Accounting Pro Ireland on (061) 518264 and email info@accounting-pro.ie and contact our London office on (0044) 20 7947 4396 and info@accounting-ppro.co.uk our websites are www.accounting-pro.ie & www.accounting-pro.co.uk

UK Contractors we are here to give you the best solutions and options for your accounting needs. Please review belowhttps://t.co/XML6ctKo3A pic.twitter.com/efE1lojRuz

— Accounting Pro (@accountingproke)

News

Tax breaks in Ireland for donations to sports clubs

Irish Tax Relief for Donations to Certain Sports Bodies for
Irish PAYE workers, self-assessed and company Directors.

This is a good way to pay less tax while supporting your local qualifying sports club.
TAX RELIEF ON DONATIONS TO IRISH SPORTING BODIES FOR QUALIFYING PROJECTS
What are the benefits to the tax paying entity and/or club?
Sports clubs can reclaim tax from revenue on behalf of the donor. For PAYE workers,
who contribute a minimum of €250 per annum, this contribution is paid from posttax
income and it is this tax payment that is reclaimed by the sporting body. It does
not cost the donor anything additional but provides a huge benefit to the sporting
body. Section 41 of the Finance Act 2002 provides for a scheme of tax relief for relevant
donations to an approved sports body for the funding of approved projects.
How does the scheme work for PAYE Taxpayers?
Example – Donation of €590 per year
A donation of €590 to a club from a PAYE taxpayer will be treated as having being received ‘net’ of
income tax. This means that a donation from an individual who pays income tax at the higher rate
of 41% is worth an additional 72% to the Club. The amount received by the club is calculated as
follows.
– Donation / Cost to Donor € 590
-Tax rebate reclaimed by club € 410
-Club receives € 1,000
The individual PAYE donor must complete an “Appropriate Certificate” and forward it to the approved
sports body, to allow it to claim the grossed up amount of tax associated with the donation.

How does the system work for self-employed tax payers?
If an individual pays any tax under the self-assessment scheme they can claim tax
relief on the amount themselves.
For example, an individual who pays income tax at the higher rate of 41% contributes a sum of €1,000 to
the club, the value of that donation to the Club is €1,000 and the actual cost of the donation to the individual
may be calculated as follows:
– Donation received by the Club €1,000
– Tax relief available to the donor € 410
– Actual cost of donation to the donor € 590
Scheme as it relates to Company Directors:
In the case of a company donation, the company is allowed to claim a
deduction for the donation as a trading expense.
As example would be as follows – a company makes a donation of €2,000 to a club, the value of that
donation to the Club is €2,000. However the cost of that donation to a company that pays tax at the
12.5% rate maybe calculated as
follows:
– Donation received by the Club €2,000
– Tax relief available to the donor € 250
– Actual cost of donation to the donor € 1,750
Additional information
– The minimum qualifying total donation amount by a single donor in any year is €250.
– Donations made in instalments qualify for Tax Relief.
– Where sufficient tax has not been paid to cover the donation made, the refund of
tax will be limited to the amount of the tax actually paid by the donor
– The donations must be in the form of money and must not be repayable.
How to proceed:
Complete the form:
Application for Approval of a Sports Capital Project for
Tax Relief Purposes
This is available as a PDF from the revenue website
www.revenue.ie

News

Personal tax tips for PAYE & Limited company umbrella…

Income protection policy – Tax relief is applicable when you take out an income protection policy (policy taken out in case of an accident, illness etc.) NB – The policy must be approved by Revenue as a Permanent Health Benefit Scheme.

Health insurance – If you are an umbrella contractor or if you are permanent and you pay your health insurance yourself you can benefit from tax relief at a rate of 20 per cent on the cost of your premium, reducing the net cost to yourself.

Maternity leave – Women who return to work from maternity leave may be able to benefit from unused tax credits. Ensure your umbrella payroll company or employer confirms all your tax credits are used.

DIRT – If you are a first-time buyer you can claim DIRT on the money you save for a deposit for your home.

Tax-saver commuter tickets – Do you use public transport to get to work on a daily basis? Ask your umbrella payroll provide or employer to purchase the commuter tickets on your behalf in order to claim tax relief. Depending on the mode of transport and your rate of pay you can save approximately anything between a third and half of the costs.

Flat rate expenses – Professionals such as teachers, nurses, doctors and tradesmen can claim back an annual expense allowance to cover required items like tools, uniforms etc. that you pay for yourself i.e. not covered by your employer.

Civil partnership / Marriage – Are you married or have you entered into a civil partnership in the last few years and didn’t inform Revenue? If one of you is not working and you become jointly assessed it will increase your take home pay by a few thousand (on the average industrial wage). Once you are married or are civil partners, you can share tax credits and have more of your income taxed at the lower rate, which can boost your take-home pay if you file as jointly assessed.

Pension contributions – As a PAYE umbrella employee or a direct employee you can pay into a personal pension scheme and reduce your tax burden as a result. Use an independent financial adviser to come up with the best scheme to meet your needs.

And finally, remember to look at the revenue website to check for any further tax
savings you can make: http://www.revenue.ie/en/personal/index.html

News

Coming soon – Accounting Pro Ireland referral program

Accounting Pro will soon be publishing details of our generous referral program. We believe that referrals via our contacts and our prospective clients is the optimum way of growing our business. As we add new business we want to share in any success we have so a referral program fits in with this approach. Details will follow shortly.

News

Common challenges facing contractors – Financial, accounting and others……

 

7. Pension and health insurance – contractors have to pay this themselves. Even though you will be paid a premium for your contracting and these are partly tax-deductible you will still need to budget to pay them. So before you make the move to contract, calculate what these are worth for you as part of your permanent job and calculate these costs into your contracting rate.

8. Marketing your services / increasing your business profile – You will have to consider the time you will need to allocate to work your network, build good relationships with agencies and consultancies to ensure you have a steady flow of work. Your Linkedin profile will be of paramount importance in this and especially how you structure it.

For all of the challenges outlined Accounting Pro will be able to offer help and guidance and have the expertise and products to help the contractor market. Please visit www.accounting-pro.ie and www.accounting-pro.co.uk

News

Common challenges facing contractors – Financial, accounting and others……

4. Payment issues – this is a serious concern for contractors. Being involved in a payment chain means that there could be delays in your payment. An Agency or Umbrella can delay a payment to you if the client delays paying them (some clients have a long lead time contractually before they pay). It’s important to discuss with whoever you are working through and ensure you are paid without delay.

5. Impact on family/home life – prepare yourself for long hours, weekend work sometimes etc. You may also have to work away from home for extended periods. This will have an impact on home-life – partners, children, pets but in the pursuits of the right contract at the right rate you may end up having to do this.

6. Mortgage woes – If you are the contractor you will know it isn’t easy to get a mortgage – the banks invariably want 3 years worth of company accounts etc if you have a limited company. You are also in a different bracket for evaluation when you are a company director than if are a salaried employee. Being part of PAYE Umbrella service will make this process easier and may make it easier to get a mortgage but when dealing with the banks they want a ‘sure cert’ paid pensionable salaried application so if you can get your mortgage before you go contacting make sure you do!

News

Common challenges facing contractors – Financial, accounting and others……

1. Administration – if you are using a PAYE Umbrella solution this isn’t going to be such an issue. Providing information to your Umbrella service on your private pension as well as a few other big ticket items is all there is. Your main admin will centre around providing your time-sheet to your umbrella service and your agency on a weekly or monthly basis. But as it provides you with your money this will feel like admin that’s really worthwhile. On the other hand, if you have a limited company solution there will be a lot more admin involved – especially on the expenses front. You will need to ensure you keep copies of all the allowable receipts, compile and provide them to you Umbrella service on a monthly basis. This may take quite some time every month.

2. No paid holidays, no paid sick leave – Normally, in your permanent employment you have a minimum of 4 weeks holiday a year as well as public holidays and are entitled to take a certain amount of paid sick days per year. As a freelancer you don’t have any such entitlements – if you are on sick leave OR if you take time off you miss out on your day rate for each day you are not working. As a result, you need to be conscious of this when negotiating your day rate – plan for at least 6 weeks off per year between sick days, public holidays and holidays.

3. Time between contracts – it’s all very well being a contractor in a boom market when you can have more than 1 offer at a time and there is the potential to move seamlessly from 1 contract to another. There are periods when like 2008-2009 the market tightens and there are more contractors than contracts! In that instance, it is important to up-skill through relevant training and work your network hard to get a new contract. At any rate, contractors need to realise that there will be fallow times and to budget according – put aside 10% of income into a fund for such a scenario if you have a limited company. If you are using a PAYE Umbrella solution you will be paying employers insurance so you will be entitled to social welfare for periods between contracts.

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