Providing accountancy services to freelancers and contractors?

IPSE is a valuable source of knowledge and information about all things freelance. We work closely with UK accountants and tax advisers who wish to form part of a community committed to best practice.

Accredited Accountants

The Accredited Accountants scheme is designed to help members choose their accountant by identifying and promoting those who have been given additional and specialist training in freelance-specific issues and have undertaken and passed our exacting training and assessment programme.

What is a IPSE Accredited Accountant?

IPSE Accredited Accountants are those who have been given additional and specialist training in freelance-specific issues and have undertaken and passed our exacting training and assessment programme.

The IPSE Accredited Accountant scheme involves:

  • Strict entry criteria and a rigorous application process
  • Two-day training programme on:
  • IR35 (intermediaries legislation) and practical advice
  • Relevant developments in legislation
  • Good customer service
  • Written assessment (Pass Required to receive accreditation)
  • Annual one day refresher course, ensuring your firm is up to date with contractor-specific issues

How the scheme works

The IPSE Accredited Accountant scheme (which includes IPSE Affiliate membership) is restricted to accounting practices with one or more qualified partners or practitioners and we envisage accrediting no more than one or two practices in a given geographical or postcode area.

Although accreditation is for the practice rather than the individual, it is important to have a minimum number of two people trained – usually the partner responsible for contractor clients and the person who looks after the day-to-day matters. Sole practitioners are also welcome and will benefit greatly from the quality-assurance clients link to accreditation.

Benefits to members

The IPSE Accredited Accountant scheme complements the other offerings in IPSE’s range of services and exists in response to clear demand from our members. IPSE membership provides the following benefits:

  • Access to trusted and credible advice from a published list of all accredited accountants
  • Reassurance that IPSE accredited accountants will have received relevant and up-to-date training in freelancer-specific issues and submitted a marked assignment
  • The ability to provide feedback to IPSE which will be taken into account when performing annual reviews
  • An incentive for accountants to provide top-notch customer service geared towards freelance consultants’ and contractors’ needs
  • Potential to bring IPSE into wider contact with accountants who are also key influencers of freelancers and potential introducers
  • Discounts for your clients on IPSE membership

Benefits to accountants

Feedback from IPSE members suggests that the level of capability and expertise offered by accountants varies considerably.

Through the IPSE Accredited Accountant scheme, participating practices can benefit from:

  • Up-to-date training from renowned experts in tax and case law matters that affect freelance contractors
  • Continuing professional development (CPD) points for your designated participants who undertake the IPSE Accredited Accountant structured training course
  • Differentiating yourselves from other practices that cannot claim specialist knowledge and experience of looking after contractor businesses
  • Being able to display the IPSE Accredited Accountant logo on your marketing materials
  • Having the opportunity to present your credentials to IPSE members and the wider freelance community through publicity on IPSE’s website and marketing and PR collateral

How to apply

To apply for the scheme, the practice needs to complete and submit a detailed application form for review by IPSE and Assured Tax Consulting, with a non-refundable deposit. Subject to the application being accepted, the practice can then book places on the next training course.

Please note: We have currently reached the maximum number of accountancy firms in England and Wales for IPSE Accredited Accountancy. Please do contact us to leave your details so we can get back to you when spaces become free.

Managed Service Companies legislation

Members will be aware that if one wishes to be in business on one’s own account, one of the legitimate and most tax efficient ways of trading is through a limited company.  The company’s shareholder(s) can be paid a mixture of salary and dividends.  This is is beneficial because dividend payments do not attract employers or employees national insurance contributions, and the rate of income tax on dividends is lower than it would be if the dividend was received as employment income.  

Understandably, many freelancers will look to the services of an accountancy firm or ‘accountancy services provider’ for help with everything from setting up a limited company to staying on the straight and narrow in respect of their book-keeping and statutory reporting duties (such as filing returns with HMRC and Companies House).

However, if an accountancy service  provider is administering a limited company to the extent that in practice the individual freelancer is reliant on that provider to undertake the limited company’s day to day activities (such as setting salary levels, invoicing procedures, controlling the company’s bank account, producing directors’ agreements, contracts and promotion of the company) then the company is being facilitated by that provider and the company will be a Managed Service Company (MSC).  The extent of this involvement by the accountancy service  provider will make it a Managed Service Company provider (MSCP).

Under the Managed Service Company legislation which came into effect in April 2007, MSCs will have to deduct full PAYE and NICs on all income paid to the contractor(s) operating through the MSC. If you operate a genuinely independent limited company this legislation is not designed to target you. If, however, your company is ‘managed’ on your behalf, the legislation may apply.

A company is a MSC if it meets ALL of the following criteria:

  • It supplies the services of individual workers to a client 
  • The payments made by the company to workers are in proportion to the services they have provided 
  • These payments are more than they would be if they were employment income 
  • A MSC scheme provider is involved with the company (as outlined in the second paragraph above)

A 'company' in this sense can include schemes utilising partnerships aswell as Limited Liability Partnerships. Exemptions are provided for recruitment agencies and the professional provision of legal and accounting services.

If you’re serious about contracting and wish to be fully in business on your own account, you should probably consider setting up and running your own limited company.

If you’re not likely to spend a long time contracting, or are willing to sacrifice tax rewards for the convenience of not having to run your own business, you should probably consider using a PAYE umbrella company.

Other options (e.g. sole trader, partnership) are available, each with distinct pros and cons.

IPSE offers a quick and easy service to obtain a limited company and everything else you need to set up in business at competitive rates.

IPSE has had extensive contact with the Treasury on this issue and the Treasury and HMRC have repeatedly stated explicitly and unambiguously that this measure is not designed or intended to target ordinary limited companies or their accountants.