Contractor Insurance Advice from Kingsbridge

Tax and the Modern Contractor

We’re taking another dip into the Kingsbridge archives this week as we continue to highlight some of our previous posts you may have missed. Today, we’re taking another look at tax and what the modern contractor needs to consider.

You’ve established yourself as a contractor; you’ve networked, you’re looked for jobs, and you’ve completed your first contract with a new client. Now it’s time for the best bit – receiving your first cheque.

Don’t get too attached to that number, though. You need to make sure you factor in the tax you owe, now that your tax isn’t being collected on a pay-as-you-earn basis. When you’re starting out as a contractor, it’s really important that you get your head around the realities of your tax situation in order to ensure that you don’t incur the penalties associated with paying the wrong amount of tax.

Read on to find out the kind of things that are worth considering when it comes to tax and the modern contractor.

A Contractor’s Guide to IR35 Legislation

At Kingsbridge Contractor Insurance, sometimes we like to revisit blog posts we’ve done in the past. It might be that you didn’t see the post first time around, or that you’ve only recently taken out an insurance policy with us. For this post we’re going back to October 2014, to take another look at our Contractor’s Guide to IR35 Legislation.

The Intermediaries Legislation, or IR35 as it is more commonly known, has been a topic of conversation for many in the world of contracting. With HMRC this year promising to reduce IR35 case investigation time, this key piece of legislation is now a topic that no contractor can afford to ignore.

What Are The Benefits Of Holding Insurance?

Our comprehensive insurance policy package includes professional indemnity insurance, public liability insurance, personal accident cover, directors’ and officers’ liability, and employers’ liability. But covering you as you go about your work is only part of what we do. There are numerous other benefits to holding the correct insurance:

It’s a key IR35 indicator:

There’s enough to discuss about IR35 to make another blog post entirely (in fact, we’ve done just that). But, to put it simply, it’s a piece of government legislation aimed at uncovering ‘disguised employment’. What’s that? In essence, ‘disguised employment’ is when a freelancer works on a contract through their limited company, but their working conditions and contract indicate that they are working in the same way as a traditional employee.

If you get caught up in this legislation then your income will be subject to normal income tax and National Insurance contributions, meaning that you’ll lose the advantage of the low salary, high dividends tax arrangement that many contractors benefit from.

If HMRC decide to investigate the validity of your contract against the stipulations of IR35 legislation then they’ll carry out a series of Business Entity Tests. These tests function as one of the ways to prove that your contract is at low, medium, or high risk of being caught out by IR35.

Being covered by professional indemnity insurance (one of the elements of the Kingsbridge policy package) can improve your IR35 stance significantly, and forms a significant part of the Business Entity Test.

Ensuring you are fully covered as a freelance contractor is a vital step towards covering yourself at every level. At Kingsbridge we have designed our core insurance package to cover the risks you’re exposed to as a freelance contractor. This includes Professional Indemnity, Public Liability and Employers’ Liability cover, all at levels that suit the needs of the modern freelancer.

The Most Interesting Jobs in the Oil and Gas Industry

One of the most important parts of what we do here at Kingsbridge Contractor Insurance is finding out what it is our customers do for work. As the list of professions and roles we cover continues to grow, so does our list of job titles. We consider ourselves to be experts in every field we cover, but on occasion there are jobs that even we have to Google before setting up a contractor with insurance. In the first of a series featuring all of the industries we cover, we take a look at what some of the more confounding job titles and specific areas within the Oil & Gas industry actually mean.

Everything You Need To Know About Professional Indemnity Insurance

As a contractor, you’ll find that clients and agencies will often insist that you hold adequate insurance before you undertake a contract. Having the right insurance in place will ensure you’re in line with the terms of your contract, and will provide you with cover should a claim be made against you. One of the most important covers for a contractor or freelance professional to hold is professional indemnity insurance (also known as PI.)

PI is a key IR35 indicator. It’s not a requirement for a traditional employee as they’d be covered by the insurance provisions of their end client. Holding professional indemnity insurance therefore provides a clear distinction between contractor and employee. The fact that you, as the contractor, have purchased professional indemnity insurance demonstrates a financial obligation and a responsibility to protect your interests.

Below you’ll find an easy to follow breakdown of what PI is, why you need it, and a few examples of claims so you can see the full picture.

Myths of Contractor Insurance

The world of contractor insurance can sometimes be a little confusing to navigate. Everywhere you look there are people telling you what you need and what you don’t. Here at Kingsbridge we know the contractor marketplace inside out. With fifteen years of experience serving the contractor community, we’re able to provide knowledgeable, trustworthy, and impartial advice. Below we’ll try and clear up a few of the most common misconceptions that surround contractor insurance. Without further ado:

How Do Contractors Benefit From Running A Limited Company?

We get a lot of questions here at Kingsbridge HQ about the pros and cons that come with running your own limited company. As you’d expect, working for yourself comes with greater responsibility. However, the benefits are worth the extra work. When you make the jump from being a permanent employee to a contractor you become your own boss. Setting up a limited company (as opposed to becoming a sole trader or joining an umbrella company) is often the most tax efficient way of working as a self-employed professional. There are plenty of benefits, but also a few things you’ll need to be aware of. Read our list below:

Which business insurance do I need as a contractor?

We know it can be a minefield for contractors when it comes to purchasing the right insurance cover to protect you and your business. The volume of products available to you can make the whole process a little overwhelming, so we’ve set out five essential insurances you’ll need going forward. Read on below:

Professional Indemnity Insurance:

Professional indemnity insurance is designed to protect contractors against claims for negligence (such as making a mistake, or giving bad advice.) It also provides cover for loss of documents, loss of data, breaches of intellectual property, as well as defamation and libel.

If you do make a mistake for which you are responsible or are deemed to have been negligent, then professional indemnity insurance will cover any compensation that you have to pay as a result, as well as any legal costs you’ve incurred in the process. A mistake could end up costing you tens or hundreds of thousands of pounds so it’s vitally important to have the right protection in place. It’ll also cover the cost of fixing any mistake you may have made, which could help you to avoid having a larger claim made against you.

A guide to insurance speak – all the terms every contractor needs to know

Contractor insurance comes with a lot of related jargon and we understand that it’s easy to become bogged down in what all of these industry specific terms actually mean.

Not to fear! You don’t have to swallow a dictionary in order to understand your contractor insurance policy. We’ve collected some of the key terms you’re likely to come across when searching for insurance cover to make the terrain a bit easier to navigate, and to save you some valuable time!

Get LinkedIn working for you

Today’s job market is becoming increasingly competitive, especially as contractors are becoming progressively more important in bridging the skills gap throughout the UK. It follows, therefore, that creating an extensive network of influential contacts is an invaluable way for contractors to compile a prospective client list and raise their profile online.

LinkedIn really is an invaluable tool for this exact task. It can help position you as an expert in your field, catching the attention of specialist recruiters and potential clients. What’s more, you can use your LinkedIn profile to highlight your skillset through client recommendations, endorsements and membership of professional groups.

If you want to get more digitally savvy, sprucing up your LinkedIn profile and keeping it totally up to date is a great place to start. What’s more, you need to know how to make the most of LinkedIn’s special features to make sure that you’re maximising the potential to secure your next, big, game-changing contract.

Here are some of our most important tips to getting the most out of your LinkedIn profile and fully harnessing the power of the professionals’ social media network to make sure that you’re making waves in your industry.