Financial Advice for Freelancers and Contractors
www.wealth-matters.co.uk
Tel: 01582 720511
FINANCIAL ADVIVE FOR FREELANCERS AND CONTRACTORS
1. Contractor issues As a contractor, do you get frustrated when you are looking for good quality financial advice? Do you feel that banks and other financial advisers do not really understand the way that you operate? Donʼt worry, hundreds of contractors have come to Wealth Matters with similar stories. If you operate through a limited company, it is important to understand how best to minimise your income tax, national insurance payments, corporation tax and capital gains tax. The good news is that there are many planning opportunities as a director of your own limited company.
Your search for a company that understands your issues may soon be over… “We can help you make the most of your earnings, showing you how to make pension contributions tax efficiently and helping you to extract money from your company tax efficiently, whilst at the same time helping you to minimise your tax liabilities”
2. Wealth Matters and the Contractor market Wealth Matters specialises in working with contractors, freelancers and interim managers. We offer independent financial advice and guidance to help you make smart choices with your money. We have been working with professional contractors for over ten years. We understand the issues that you face as a contractor, including: ๏ Fluctuating income ๏ Cash flow issues
๏ IR35 issues
๏ Uncertainty of future contracts
๏ Planning for retirement/ pensions
๏ Tax implications
As a contractor, you receive no pension, no sick pay and no death benefits, so you need to make your own provisions. Wealth Matters provide pension advice to members of the Professional Contractors Group (PCG) and write articles for the PCG website including the indepth guide to pensions. We also work closely with other well established and respected experts in the contractor market, such as Baker Watkin and Crunch accountants. Wealth Matters is a fee-based, financial planning firm. We focus on honesty, integrity, service and transparency; helping you on the path to financial freedom through on-going support and advice.
Wealth Matters, 727 Capability Green, Luton, Beds, LU1 3LU Tel: 01582 720511 info@wealth-matters.co.uk www.wealth-matters.co.uk
FINANCIAL ADVIVE FOR FREELANCERS AND CONTRACTORS
3. Our Process As a contractor, we understand that your time is precious. That is why we have streamlined our process into four stages to make a user friendly system:
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• You discuss your financial goals and aspirations with a member of the Wealth Matters team. " • We can ascertain the best way for you to set up a pension through either personal or company contributions. " • An appropriate level of regular and lump sum contributions can be agreed. " • We can also discuss your other financial needs e.g. life insurance, health insurance or setting up a savings plan/ISA and review any previous pensions. "
• Wealth Matters will email you a one page Fact Find to email back. " • We also provide a log in to complete an on-line risk questionnaire. " • If you have previous pensions, a form will be sent for completion by you so these schemes can be assessed."
• We will have a second conversation once all this information has been received and analysed. " • We will discuss an appropriate risk profile for your pension, finalise budgets and agree other products that may be required."
• We post all the appropriate paperwork to you in a user friendly pack." • Once returned, Wealth Matters will send off all the paperwork to the appropriate provider." • We will chase through all administrative matters until the products are set up."
Wealth Matters, 727 Capability Green, Luton, Beds, LU1 3LU Tel: 01582 720511 info@wealth-matters.co.uk www.wealth-matters.co.uk
FINANCIAL ADVIVE FOR FREELANCERS AND CONTRACTORS
4. Pensions Pension planning is a complex area with many rules to understand. It is further complicated if you operate through a limited company and take a relatively small salary. Wealth Matters are the pension experts for contractors. We can explain whether to make company or personal contributions, what you are allowed to do and how much you should contribute to reach your goals. Our advice frequently saves contractors thousands of pounds every year, through reduced Corporation Tax, Income Tax and National Insurance contributions. With a Wealth Matters pension, we offer the following features: ๏ You complete a detailed psychometric questionnaire to ensure that your investment matches your
attitude to risk ๏ We suggest an investment portfolio with a wide range of assets (cash, gilts, bonds, UK equities,
overseas equities) to spread risk. All funds are carefully selected by our investment team. We use a whole of market Self Invested Personal Pension (SIPP) so there are no restrictions in the funds that we can use. ๏ Your portfolio is rebalanced every year in line with your risk profile to give the appropriate balance of
lower risk and higher risk, higher growth funds. This process improves its longer term performance, whilst reducing volatility. ๏ We report to you every quarter with an investment review of your portfolio and you can see your fund
value on-line at all times. Funds are bought and sold for you when necessary. ๏ You have access to low cost funds that are not readily available to the public. Initial fees are typically
“According to additional research by Skandia, over a 10 year sample case, an annually rebalanced investment portfolio would return 14% more than the same portfolio if it had not been rebalanced. In addition, the rebalanced portfolio would have been less volatile.”
discounted from circa 5% to 1%. ๏ You have access to our support team and advisers that specialise in the contractor market, all at a
-‐ Professional Adviser 26/11/2009
lower overall cost than a discount broker may offer. ๏ Premiums for pension contributions are flexible. You can increase them over time or take a payment holiday if you cannot obtain a new contract. In
addition, if you wish to make a lump sum company contribution before the end of your tax year to reduce your corporation tax bill, just email or phone us and we can action this for you.
Wealth Matters, 727 Capability Green, Luton, Beds, LU1 3LU Tel: 01582 720511 info@wealth-matters.co.uk www.wealth-matters.co.uk
FINANCIAL ADVIVE FOR FREELANCERS AND CONTRACTORS
5. Other products relevant to contractors Did you know that as a contractor, you can take out life cover and health insurance AND claim tax relief on the premiums?
Tax efficient Death-In-Service benefits
Executive Income Protection What would happen if you are unable to work due to illness? Your level of income could fall and your financial plans may be compromised. An executive income replacement plan can pay out once you have been unable to work for a set amount of time. ๏ It can cover salary and dividends, along with other costs to the
company such as employer pension premiums and National Insurance contributions. ๏ The benefits are paid tax-free to the business. The business can
then pay the employee the benefits in the form of salary or dividends.
Life cover or death-in-service cover for contractors is known as a ʻrelevant life policy.ʼ It is set up in the name of the company and the life assured can be the director or any other employee. The premiums are paid by the company and the benefit can be paid to an individual (spouse/ loved one) through a trust, tax-free and free from inheritance tax.
The premium is paid by the company and can be classed as a taxdeductible expense for the business and a claim for corporation tax relief can be made.
Furthermore, the policy premiums are normally classed as a tax deductible expense so your business can receive corporation tax relief on the premiums at your highest rate.
Wealth Matters, 727 Capability Green, Luton, Beds, LU1 3LU Tel: 01582 720511 info@wealth-matters.co.uk www.wealth-matters.co.uk
FINANCIAL ADVIVE FOR FREELANCERS AND CONTRACTORS
6. What happens next? Please contact Wealth Matters on 01582 720511 or info@wealth-matters.co.uk and we can get things going. For further information on the work we do with contractors, including Case Studies of existing contractor clients, visit our website: www.wealth-matters.co.uk “Never have I experienced such fast responding excellent customer service, particularly from an IFA. Wealth Matters are in a class of their own. I have everything now consolidated under one roof including frozen pensions, critical life cover and ISAs. Simply brilliant!”
-‐ Darren Fell, Founder and MD of Crunch Online Accountants
“As a freelance contractor with pre-‐existing pension funds, I wanted advice on how best to invest these and on how much to save. With Wealth Matters, I felt that I was getting true expertise and advice and I felt in control of my own pension and investment future and happier that freelancing was benefitting my retirement, rather than worrying about what the future would hold." -‐ Teresa Trangmar, IT Contractor
“I have had no hesitation in recommending Wealth Matters‘ services to friends, family and associates given their excellent service, enthusiasm for addressing your financial needs and professional manner in which they see through requests."
-‐Laurence Dale , Contractor and Director of Celerity Mobile Ltd
Wealth Matters, 727 Capability Green, Luton, Beds, LU1 3LU Tel: 01582 720511 info@wealth-matters.co.uk www.wealth-matters.co.uk