Contractor Accountants

Contractor Business Services UK

UK contractors typically need specialist accounting with FreeAgent or Xero, IR35 contract review, contractor-friendly business banking, tailored insurance, contractor mortgage brokers, and pensions set up through a limited company. Most providers specialise in contractor-specific needs such as dividend planning, short-term income proof for mortgages, and employer pension contributions from company profits.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 5

Key takeaways

Specialist contractor accountants handle the limited company setup, VAT and PAYE registration, annual accounts, corporation tax, and IR35 contract reviews under a fixed monthly fee.
Contractor insurance typically includes professional indemnity, public liability, and cyber cover at levels set by the end client, with premiums tax deductible through a limited company.
Contractor business bank accounts offer fast online onboarding, integration with accounting software, and dividend-aware tools that general high-street business accounts often lack.
Contractor mortgage brokers use day-rate based income assessments and can lend against contract income rather than salary and dividends, improving borrowing power for newer limited companies.
Limited company pensions let contractors contribute from company profits pre-tax, reducing corporation tax while growing retirement savings outside the personal allowance cap.

Contractor Accounting, Software & IR35 Advice

Firstly, we'll start with the services that we provide which covers the critical things you'll need to start and operate your contracting business.

For those just getting started, we provide free company registration on Companies House. This is typically done within 24 hours of submitting your details to Forma. It can take under 5 minutes to provide all your details and we'll just need a proof of ID and proof of address for each of the company directors.

We cover all of your key company filing requirements like annual accounts, confirmation statements, corporation tax and ensuring you meet all filing deadlines.

We also help with your annual Self Assessment which is a requirement for all company directors.

Contractor Business Insurance

Depending on your contract agreement, you may be required to have business insurance cover.

There are two types of insurance you may be asked for as a contractor:

Public Liability: a fairly common and straightforward cover; if your business causes an injury or property damage to a member of the public, public liability insurance will cover you for the resulting legal and compensation costs.
Professional Indemnity: covers risks in association with your professional services such handling client data or working with intellectual property. It’s a must-have for many businesses and whilst not a legal requirement, many clients will insist that you have this coverage as a prerequisite to working with you.

We would advise against locking yourself into annual agreements (unless you get a significant discount) and to compare quotes - particularly if your pricing is over £30/mo.

We have a partnership with Superscript (formerly Digital Risks) and can offer a 10% discount on any business insurance policy with them.

You can read more about what business insurance you need and click the button below to get a quote in under 5 minutes with 10% off.

Contractor Business Bank Accounts

We've done some extensive reviews of different bank accounts available in the UK and our general advice is this - stay away from the large high street banks (including Metro) if you want an account setup relatively quickly.

A lot of new entrants to the business banking space have very quick onboarding, simplified account management and have introduced a range of banking products like overdraft facilities and loans.

Mettle

Mettle was launched by NatWest and RBS as a new challenger brand aimed at the micro business segment. The onboarding and account setup times aren't quite as fast as some other brands but they do include FreeAgent accounting software for free and we'll also give you a £10/mo discount on your package price if you have a Mettle, NatWest or RBS bank account.

Tide

Setting up a bank account with Tide is a breeze and works well for single director companies. Like us, they offer free company registration as well. The benefit here is that you won't have to add your verification details twice.

We can also offer £50 when you open an account with them and free transactions for a year (usually 20p per transaction).

Revolut

Revolut is perfect for those that need to send money abroad or who may have contracts that are paid in Euro's or Dollar's. They also have a range of integrations with Zapier which can help you send some smart alerts and triggers whenever you send or receive money.

We have a partnership with revolut to provide their grow account for free for a year - worth £300 year.

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Contractor Mortgages

Mortgages have definitely started to become more widely available for anyone who works as a contractor. If you have a few years of contracting experience then a mortgage provider will typically look at the last 3 years and use the average value of your income over the last 3 years. If your earnings have increased a lot over the last 3 years then they may also base your mortgage value on your previous 3 years of earnings.

Typically you'll be able to borrow between 4.5 to 4.75 times your gross annual income (i.e. salary before tax).

If you can explain a dip in your earnings (i.e. you had a baby or completed some professional training) then lenders can be amenable to adjusting the mortgage level they're willing to provide.

We highy recommend using Habito to find out more about your mortgage options.

Contractor Pensions & Investments

If you've got cash sitting in your business bank account then it's definitely worth looking at setting up a pension or investing some of the money.

If you have money sitting around in your account then you have a few options:

Invest in a pension - you'll get a host of tax benefits but your money will be locked up for a while
Invest in stocks/ shares through your limited company - you'll pay corporation tax on the investment value increase and then pay on the dividends you take
Take dividends and invest - this can depends on your dividend tax rate and you'll need to pay capital gains tax of 10% on an increase of over £12,500 in value

Pensions

PensionBee offer an excellent service for managing your pension. If you have a pension from previous employers then they'll help consolidate all of these pots into one place.

Their fees are very competitive and they offer a range of different

You can easily setup a regularly monthly payment from your business bank account to your pension pot as well and free tax topups from HMRC. They also have a range of risk profiles of assets to invest in.

You can find out more about your pension options when self employed and also get a free consultation call from the team.

Investments

MoneyBox offer a wide variety of investment classes for your company. We'd highly recommend speaking to your accountant before investing as you have.

With a variety of risk profiles and ETF's available, MoneyBox have some great investment options available.

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Frequently asked questions

Do contractors need a specialist accountant?

Most UK contractors benefit from a specialist contractor accountant rather than a general small-business firm. Specialists understand IR35 rules, dividend strategy, VAT flat rate, and typical contractor deductions such as mileage, subsistence, and professional insurance. They usually include FreeAgent or Xero in a fixed monthly fee and handle the full compliance cycle. Generalists often price per service and can miss contractor-specific planning opportunities.

What is included in a contractor accountant's monthly fee?

A typical UK contractor accountant charges £100 to £200 per month covering company formation, VAT and PAYE registration, monthly payroll for a director salary, dividend vouchers, quarterly VAT returns, annual accounts, corporation tax return, confirmation statement, self-assessment, IR35 contract reviews, and FreeAgent or Xero software. Additional services such as mortgage references and R and D tax credit claims usually sit outside the fixed fee.

Do contractors need a business bank account?

A limited company legally must hold its funds in a business bank account separate from the director's personal account, because the company is a distinct legal entity. Sole trader contractors can use a personal account but most still open a business account for clean record keeping. Contractor-focused providers such as Tide, Mettle, and Starling offer fast online opening, Xero or FreeAgent integration, and no branch visits.

Can contractors get a mortgage with contract income?

Yes. A growing number of UK lenders assess contractor mortgage applications using day-rate income rather than salary and dividends, improving borrowing capacity for newer limited companies. A contractor-specialist broker arranges lenders such as Halifax, Kensington, or Clydesdale, who usually lend four to five times annualised contract income. Applicants typically provide the current contract, CV, bank statements, and evidence of six to twelve months of continuous contracting.

What pension options do contractors have?

Limited company contractors can pay employer contributions from company profits into a Self-Invested Personal Pension or workplace scheme. Contributions are tax deductible for corporation tax, avoid personal income tax and National Insurance, and do not count toward the contractor's personal dividend and salary income. Annual allowance is £60,000 in 2026-27, subject to tapering for high earners. Sole traders contribute from personal income with the same annual allowance.

Which insurance do contractors need to arrange?

Most UK contractors arrange professional indemnity, public liability, and cyber insurance directly through a contractor-specialist broker such as Kingsbridge, Caunce O'Hara, or Qdos. Typical cover is £1 million to £5 million per claim, with premiums of £150 to £500 per year. Once a contractor employs staff, employers' liability insurance becomes a legal requirement at £5 million. Premiums are tax deductible through a limited company.

Can a contractor use a high-street bank for business banking?

Yes, but most contractors prefer a contractor-focused digital bank for speed and software integration. High-street banks such as HSBC, Barclays, and Lloyds offer business accounts but often require branch visits, paper ID, and take several weeks to open. Tide, Mettle, Starling, and Revolut Business open in 1 to 3 days online, integrate directly with FreeAgent and Xero, and work well for a single-director limited company contractor.