Financial Planning for Contractors & Self-Employed

Whether you are a seasoned contractor or come to self-employment from a staff background, we recognise that each individual is different. The key is to plan, and understand both company and personal finances in tandem: they often overlap and one cannot be planned without reference to the other.

In addition, few people know with certainty where their career will lead them. Therefore, any plans made need to be able to work efficiently irrespective of changes which may seem unlikely or distant – a move abroad, a staff position or eventual retirement.

Our two main planning tools are lifetime cash-flow models, and financial independence models. Our sophisticated tools summarise complex data and concepts so that our clients have a straight-forward view of their finances going forward.

Of course inflation, investment returns and life itself do not always run in straight lines. This is why we meet clients regularly; we re-run our models and present clients with updated recommendations to make sure that they remain on track.

Start Up

Your new limited company should soon be making healthy profits, but there is no obligation for you to pay these profits out to you personally the minute they are earned. In fact setting your personal income at the right level to minimise unnecessary tax bills is, in many cases, advisable.

In our experience, as a new contractor your priorities are twofold: the formation of the new limited company so that you are able to trade, and getting your feet under the desk and becoming established in your new job.

But there are also other considerations. For example, in your previous job, you might have left death-in-service cover, income protection and private medical insurance behind, and might now want to establish your own staff benefits package. You now have the power to tailor the package to your own requirements. Acumen Financial Planning is perfectly placed to guide you.

For most individuals, there will come a point when contracting through a limited company comes to an end. This may be due to a move abroad, an irresistible staff position, or retirement. The efficient extraction of company funds then becomes a key consideration.

We are able to explain the different strategies in an easily understood way. In many cases funds can be moved out of the company with little or no tax liability.

If the end game is retirement, our comprehensive financial planning will dovetail with the company’s closure to give you a clear understanding of the financial direction in which you are heading.

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