Contracting Clarified with our Team: Alan Arkin's Top Tips!

Are there specific types of expenses that contractors commonly process, and what best practices do you recommend when it comes to managing/monitoring your expenses?  

Contractors typically process expenses like a portion of their mobile phones bill, a portion of their broadband/internet bill, and the eWorkers allowance. For managing expenses, I think it's crucial for contractors to submit expenses monthly rather than delaying until 6 months into their contract, the end of the year or the end of the contract. This just ensures timely expense management and that you get your tax relief in your payslips on an ongoing basis.

Are there any expenses that contractors often overlook, but can be significant for tax relief?

I think contractors can receive significant tax relief on business equipment or necessary supports for their home office setup if working remotely. These might be overlooked but not often.

What is the most common mistake you think contractors can potentially make regarding their finances?

Not setting up a pension, which is a crucial aspect of long-term financial planning for contractors.

For new contractors, what steps or routines do you suggest they adopt to establish and maintain good financial habits throughout their contracting career?

Just basically keep on top of their expenses as mentioned above (i.e submitting them each month), uploading timesheets promptly (if required), and ensuring timely submission of hours/days worked. Establishing these habits can ensure that your payment schedule runs smoothly for you.

What advice would you give to someone just starting their contracting journey?

For someone starting contracting for the first time, I understand that signing contract documents to get everything in place and having parties such as a client, an agency and an accountant can be a new process, but don't be afraid to reach out and ask for help if unsure on anything. Once it's sorted and you have clarity on their invoicing/payment schedule, everything will run smoothly for you - I can guarantee it!

How frequently would you recommend that contractors conduct a review of their setup to ensure it aligns with their career goals and facilitates continued growth?

That would really depend on the contractors own preferences, whether they are happy in their role and how long their contract is. I would suggest after a year that the contractor should maybe review whether it would be worth moving to their own Personal Limited Company.

Are there any recent changes in tax regulations or industry trends that contractors should be aware of for optimal financial planning?

Contractors should be aware of the changes within the last budget with regards to tax credits and their standard rate cut off point. Also whether there are any additional credits that they may be entitled to that they are not availing of. And of course contractors should reach out if they want any advice on this!

As a dedicated account manager at Icon Accounting, if there's one resource from our offerings that you consistently recommend to your clients in the contractor community, what would it be?

Definitely the free consultation for pension planning and wealth management advice with our partner, Rockwell Financial. It will help you understand what you can have in place, and it comes at no cost to you!