Accountants for contractors and freelancers

Going contracting is a strange mix of freedom and paperwork. One week you’re negotiating a great day rate; the next you’re staring at a company formation, a VAT question, an IR35 clause and a looming Self Assessment, wondering when running a business turned into a second job. That’s the bit we take off your hands, so you can get back to the work that actually pays.

Reviewed July 2026. Tax rules change and depend on your circumstances. Always check GOV.UK or speak to us before acting.

What’s different about contractor accounting

Contracting isn’t just self-employment with a better rate. You’re usually running a limited company (a “personal service company”), which comes with its own filing, its own tax rules, and one topic that hangs over everything: IR35. Your income can be lumpy, your expenses need tracking, and the difference between a good setup and a lazy one can be thousands of pounds a year in take-home. Generalist accountants often treat contractors like any other small company. The details are where contractors win or lose.

Limited company or umbrella? We help you choose

This is the first big decision, and the right answer depends mostly on your IR35 status and how long you plan to contract.

• Limited company usually means more take-home when your contracts are outside IR35. You can pay yourself a tax-efficient mix of salary and dividends, claim a genuine range of business expenses, and build up funds in the company. The trade-off is more admin, which is exactly what we handle.
• Umbrella means you’re employed by the umbrella and paid through PAYE. It’s simpler with almost no admin, but you take home less and can claim very few expenses. It often suits short stints, or contracts caught inside IR35.

We’ll look at your rate, your contracts and your plans, and tell you honestly which route leaves you better off. Sometimes it’s the limited company; sometimes it genuinely isn’t.

Getting IR35 right

IR35 (the off-payroll working rules) decides whether HMRC sees you as genuinely in business or as an employee in all but name. Outside IR35, your company handles your tax in the usual efficient way. Inside IR35, you’re taxed much like an employee, and the take-home difference is significant.

Who decides your status depends on your end client’s size. Medium and large clients are responsible for determining it; small clients are exempt, which leaves the decision (and the risk) with your own company. From 6 April 2026 the thresholds for a “small” company rose, so more clients now fall into the small category, and more contractors will be assessing their own status again. It’s an area where a wrong call is expensive, so we review your contracts and working practices and help you get it right rather than guess.

Keeping more of your day rate

Once your structure is sorted, the day-to-day tax planning is where a good contractor accountant earns their fee. Through a limited company you can usually:

• Pay yourself an efficient mix of salary and dividends (dividends carry no National Insurance, though the dividend tax rates rose again from April 2026 and the tax-free dividend allowance is now just £500).
• Claim legitimate business costs: accountancy fees, professional insurance, equipment and software, some travel where the rules allow, training, and a share of home-office costs.
• Plan around the Corporation Tax rates (19% on profits up to £50,000, rising towards 25% on larger profits) so nothing is a surprise.

None of this is about cutting corners. It’s about using the allowances that are there for you, which most contractors miss when they’re busy doing the actual work.

What we handle for you

Everything, on one fixed monthly fee: company formation if you need it, annual accounts and Corporation Tax, VAT registration and returns, payroll and director’s salary, dividend planning, Self Assessment, IR35 contract reviews, and your bookkeeping in cloud software. You get a dedicated accountant, our 3-hour email promise, and answers in plain English.

Why contractors choose Xpert

Most contractors come to us either newly limited and unsure where to start, or fed up with an accountant who only surfaces at year-end. We fix both. Fixed monthly fees so you always know the cost, a real person who knows your name and your contracts, no long tie-ins, and we handle the switch from your current accountant for you. Proactive, not once-a-year.

Contracting, or about to start? Take our 2-minute quiz for a tailored recommendation, or book a free consultation and we’ll map out the most tax-efficient setup for you.