Whatever part of the industry you are in there are always great benefits to be had by making the move to contractor. These benefits include more control over your job and work hours, wider range of skill development, whereabouts you actually want to work from – and finally the financial bonuses (which can be significantly more).

Functioning through a limited company is known as the most efficient way of working tax-wise. Some of the time people become slightly confused and start banging their head against the wall when they have to start dealing with paperwork, business planning and financial plans/strategies.

How a Contractor Calculator can help

If you’re looking for an easier way of predicting your financial situation concerning incomings and outgoings, the best thing to use is a contractor calculator. If you are in liaison with a contractor accountant, they should have a part of their website which deals with different styles of calculators, which indefinitely can help you with all your financial planning endeavours.

Keep in mind that a contractor calculator is only a rough prediction of what can be claimed, paid or earned. It is a device which supplies you with information which will ultimately help you in regards to:

• Fuel planning
• Salary outgoings
• Tax
• Expenses
• Dividend
• Tax
• VAT

These are just some of the functions of a contractor calculator.

Business Plan

A contractor calculator should be indeed used when quick, small decisions need to be made affecting your company and business. The best thing to do, in my opinion, is at the genesis point of any business – is to create a business plan. Planning gives benefits such as the ability to make continual improvements, more focus, and clearer financial goals whilst gaining hindsight of issues you may need to address.

A good contractor accountant will be able to advise you upon all of this, whilst offering you more slightly more exact figures if needed upon tax and business planning.

Tax returns with all its details of PAYE, income, contractor tax etc. can be pretty confusing to say the least, and it can indeed wear you out if you do not know what you are doing – or if you have had no help submitting one before.

Why do I need to do a tax Return?

The HMRC that we all knoTaw and love want to know ALL about your income, business expenditure and profits on your business assets (capital gains tax). From submitting all this juicy information to them, they can successfully and accurately work out your individual tax bill. At the same time it reveals to them if they owe you, or if you owe them any tax.

Everyone who is self-employed needs to fill out a tax return. It doesn’t matter how many hours you’ve worked, if you’re being paid outside the PAYE scheme – you fill out a tax return regardless. If you don’t get a payslip or pay income tax you will, probably, need to fill out a tax return.  If you’re still worrying about contractor tax, I will come to it in a bit.

When / How do I fill it out?

You need to fill out your tax return either by hand (31^st October) or online (31^st January). I’d personally advise doing it online.

The guide is over 100 pages long, and that’s just the expenses guide. Getting hold of a contractor accountant to help you through this process is advisable, answering all your burning questions on contractor tax.

The basic information you need to include is the following:

• Your income – Details of invoices over the past year
• Bank account interest
• Employment income (P45 + P60)
• Rent/Expenses from property
• Contractor tax you have already paid on income
• NI you have already paid
• Expenses.

Penalties

Don’t lie in this. If you get any of your information wrong or the contractor tax etc. you have already paid you could face a fine up to £3,000 – and the information is held up to nearly 6 years. You are also fined £100 if your tax return is late.

If you need cash for a vacation, to pay off your mortgage, or just a loan the one golden rule you should recall is to avoid borrowing from friends of family. If history hasn’t taught you by now that borrowing money from family and friends is mistake, perhaps you may never learn. There are other options. Peer to peer lending UK makes it possible for you to get a loan to cover mortgage, buy a home, or take a vacation.

Peer to peer lending involves one person borrowing from another. You do not have to go to a bank, or other financial institution to get a loan. Instead, you can go on the Web, and search for P2P, person-to-person, or peer-to-peer lending to get a loan. P2P loans are investment vehicles.

Actual returns are as much as 10.59%. You can involve yourself in the lending and earn substantial returns. You will need to build a diversify portfolio, and control your investments if you intend to get involved. If you want to borrow money, the loans are unsecure. You can make easy monthly installments, and benefit from rates starting at 6.59%. The rates are fixed starting at 6.59 and up to 35.84 percent.

The loans are available for debt consolation, home improvement, business use, auto use, or for anything, you need to use it for. You can borrow as little as $2000 or $25,000. Those who borrow money can choose the amount of money they need up to $25,000 in most instances. To apply for the loan you simply fill out the online application and provide your personal information. Read more…

A Debt Management Plan is not a kind of loan, and taking out a Debt Management Plan is not a process of replacing one kind of debt with another. Put simply, a debt management plan places your unsecured debts with a third party who deals with these unsecured debts on your behalf.

A Debt Management Plan is not a legally binding agreement and no credit check must be completed in order to take out a plan.

If you are currently struggling to pay back increasing debt there may be a temptation to resort to an unregulated loan, but beware such means. Unregulated loans can lock consumers into agreements for years and leave them at the mercy of massive exit charges.

According to reports by the UK Insolvency Helpline’s advice team a growing number of people are losing control of their spending and falling into greater debt. It is said that on average, people who people who contact the Insolvency Helpline owe £31,000 (excluding mortgages), compared with £29,000 in 2004.

This rising trend is cause for alarm and a signal that more of us will need to reduce interest and actively manage our debt more successfully. It is also suggested that the increases means that more of us will be forced to resort to such dangerous solutions as unregulated loans.

Unregulated loans, as their name suggests, are not governed by the same jurisdiction as other similar products and there are no safeguards to protect the consumer’s interests like there may be with other loans. Typically, these loans are made to individuals, outside any mortgage arrangements, for amounts of up to £25,000.

The constraints of the Consumer Credit Act are only enforced upon loans of up to £25,000, meaning that for loans which exceed this amount lenders are free to impose excessive fees or conditions onto their customers. This is not the case with a Debt Management Plan.

Such protection is particularly valuable when borrowers wish to pay their debts off within a shorter timescale. According to the Consumer Credit Act, lenders cannot charge a fee of more than one month’s interest for early payment of debt. Furthermore, where the remaining term of the loan is one year or less, no charge can be applied. This, however, has no bearing upon unregulated loans and customers may find it extremely difficult and financially dangerous to attempt to exit their payment plan early.

While mortgages usually involve sums of more than £25,000, the Financial Services Authority provides similar protection to a regulated loan. One of the rules concerning mortgages dictates that if a customer pays their arrangement early or falls into arrears, the charges they will incur are limited to the costs that the lender themselves incur.

No such safeguards apply to borrowers of unregulated loans. Unregulated lenders include convoluted and costly repayment penalties in the small print of their contracts.

Customers are at the mercy of interest rates for the duration of their loan, and worse, charges and penalties can lock customers into their risky plans for many years.

A Debt Management Plan is not a loan and not a dangerous situation. Their terms might not suit every circumstance, but could be the solution to your debt problems long term. Simply speak to a debt management plan professional about your own circumstances to see if a debt management plan could be the solution for you.

Financial stress is one of the leading causes of divorce or breaking off a long-term relationship. If your significant other has a lot of existing debt, or is maxing out the credit cards and you are the one that is financially responsible, it can be hard on the relationship. But, before you pack up and leave, consider these tips for finding some common ground.

1. Financial Review
Know where you stand in your own financial profile. Look at how much you earn versus how much you spend and where it is being spent. What parts of your personal finances are allocated to bills, rent/mortgage, savings/retirement and entertainment? Encourage your partner to do the same financial review. Numbers don’t lie, people do.

2. The Debt Talk
The debt talk is necessary to have when you are thinking about combining your finances, such as getting married or cohabitating. You must discuss your partner’s history and current situation to ensure that you are protected and aren’t forced to deal with any surprises down the road. If your significant other has a credit problem, that could change the next 10 years of your life. Make it your business to inquire.

3. Budget
After the debt talk, you will have an idea of your mate’s attitude towards money. The discussion may uncover that you are better at managing financial affairs and you are the best candidate for the family’s accountant. Create a budget with your other half so you both know your responsibility. Set up a weekly or daily allowance so that he/she is aware of spending. You should also consider creating a “fun fund” for traveling, visiting friends or for entertainment, rewarding yourselves periodically for being fiscally responsible.

4. Cut your Losses
After you have followed the aforementioned steps and things don’t change after several months, you may consider walking away or separating finances (if you aren’t married). Once you are married, your partner’s financial situation is now yours. Oftentimes, taking on your partner’s financial irresponsibility can damage your trust in him/her, in addition to damaging your credit report.

This was a guest post by ChicagoBankingRates.com, a site that provides daily updates on the latest Chicago mortgage rates, finance information and more.

A few months ago (April 18, 2007), Discover Financial Services launched a new business credit card that offers frequent flier miles to small business owners. Among the credit card brands, Discover was one of the last to start offering business credit cards to the small business sector. Reportedly, this is only the latest in a virtual avalanche of business credit cards designed for small business.

One cannot but wonder at the sudden interest.

Perhaps a glance at recent research material will offer some clues. Data shows that in 2006, the small business sector spent $4.9 trillion; but only one-twentieth (5%) of that money was paid through business credit cards in any form (credit or debit card). The credit card companies now want in on that huge market, and believe they can induce small business owners to not only make use of their business credit cards but also to spend more on their cards.

To achieve this, the credit card companies will have to convince the small business owners to use business credit cards in less traditional ways. Traditionally, business credit cards have largely been used to cover travel and entertainment expenses. What card companies want is for businesses to use their business credit cards for everyday spend.

This is the reason behind the new cash back rewards business credit cards. These cards offer 5% discounts on purchases of office supplies, gasoline, courier services and other essential business needs. MasterCard even went as far as launching a business credit card targeted at a specific industry: contractors and construction companies. MasterCard was also the first card company to provide zero-liability protection to small business credit card holders.

Discovers recently launched business credit cards offer small business the chance to purchase checkbooks. This enables small business owners to pay for purchases from vendors that dont accept business credit cards. These checkbooks tap into the spending limit on their Discover business credit cards. Visa offers a directly competing program.

American Express sponsors various networking events for small business credit card holders. It also features one of the most extensive business resource databases to help users of its business credit cards to address and resolve their everyday business management problems and concerns.

How big is the potential market for business credit cards, you may ask? If you take the $4.9 trillion small business spending in 2006 and double the current business credit card spend from 5% ($245 billion) to 10%, you have $490 billion. If you charge 15% interest on that, you have a $74 billion potential contribution to profits. In fact, market research companies forecast double-digit growth in small business credit cards between now and 2010, and total charges are projected to reach $740.2 billion by that year. That is a lot of profit.

It has been an uphill climb to get small business owners to subscribe to an expanded use of business credit cards. It takes time, but eventually business owners will respond. One issue that business credit card issuers will have to address is the marked preference of small businesses to pay their full balance for the month as and when it falls due. Card companies do not earn from such transactions. That should be food enough for thought.

Almost everyone gets the offers in the mail for credit cards that claim to provide 0 percent interest. These offers are incredibly tempting, and on the surface they look like a good idea. You could transfer your outstanding balances, buy that big-ticket item youve had your eye on, and get free interest for up to a year. Sounds great, right? Well, beware because there are some hidden pitfalls with these cards that could spell disaster to your pocketbook and your credit rating.

0% APR is good for a limited time. Most of these credit card offers last for six to nine months, although some are good for up to a year. This means that you can transfer your balances and make purchases for one year with no interest added to your billing statement. However, at the end of this period, you will be charged interest that is calculated on your credit score and history, so dont get lazy and forget to check the calendar. If you buy a big-ticket item near the end of your free interest period, you may end up paying more interest on your credit card than you would have with in-store financing.

0% APR could be null and void if you make a mistake. There are stiff penalties on most of these credit cards that hold you to very high standards. For example, with some cards, if you are late even one day with your payment, you lose the 0% APR and are immediately moved to a penalty interest rate that can be as high as 24%.

0% APR could lead you to outrageously high interest. When the introductory period of free interest is over, you will begin to pay regular interest on your purchases and any outstanding balances. Be aware, however, that this rate may be much higher than you would get with another standard credit card. The average rates after the introductory free interest period is nineteen to twenty-one percent. So if you plan to transfer balances and pay them all off within a year, then go for it. But remember that if you have a job loss or medical emergency that keeps you from making a payment, you will be paying outrageously high interest from that point on.

What is a Credit Score and why is it important for a mortgage loan?

A credit score is a rating that is also called a fico score. This rating yields a number that reflects your level risk to the creditors. The higher the score the better your credit rating. The lower your score, the bigger risk of credit you are considered. The score is generated using statistical model, that considers credit accounts from your credit report. Credit scores will determine the loan amount, interest rate, morgage terms, and in some cases the amount closing costs charged.

Your credit score is not archived or stored as part of your credit history in your credit file. The score is generated at the time a lender requests your credit report, and is then included with the report viewed by the creditors. Your credit score is a specific number, and it changes as the elements in your credit report change. For example, payment updates or a new account could cause your score to fluctuate. There are many different credit scores used in the financial service industry. Your score may be different from mortgage lender to mortgage broker, depending on the type of credit scoring model that was used.

Who uses credit scores and how are they used?

Banks, credit card companies, auto financers, retail stores and most other home equity lenders that issue credit or mortgage loans use credit scores to quickly summarize a consumer’s credit history, saving the need to manually review an applicant’s credit report and provide a more reliable, faster risk decision. Although many additional factors are used in determining risk, such as an applicant’s income vs. the size of the loan, a credit score is a leading indicator of one’s basic creditworthiness.

What information impacts my credit score?

The information that impacts a credit score varies depending on the score being used. Usually, credit scores are affected by payment patterns in your credit report. (ie. late payments, credit type, number of accounts and age of accounts) Other considerations are the total amount of revolving debt and recent inquiries. Remember that credit bureau scores cannot use demographics prohibited under the Equal Credit Opportunity Act, such as race, color, religion, national origin, gender, age, marital status, receipt of public assistance, or exercise of rights under the Consumer Credit Protection Act.

As even the briefest search on the internet will show you, there are thousands of credit cards available from many different providers, and even more sites offering advice on which card you should choose. Most card advertisements and promotions make a lot of noise about attention-grabbing features such as market-leading low rates, long balance transfer deal introductory periods, or enticing cashback or rewards programs, but some or all of these features may be irrelevant to you no matter how good they look.

What really matters when choosing a new card to apply for is getting the card with the right mix of features to suit the way you plan to use it. To ensure that you get the best deal available it pays to take a little time out to think about the ways in which you normally use your card.

In today’s increasingly cashless society, many people use plastic as simply a convenient payment method, clearing their balance in full every month. This frees them from having to carry large amounts of cash around, and makes it easier to keep track of their spending with online account management and the like. If this is the way you plan to use your card, then the interest rate doesn’t really matter to you. Considering that you’ll be clearing your balance every month, then you shouldn’t be charged interest at all.

What’s more important is to get a card that rewards you in some way for using it, either through cashback where a small percentage of everything you spend is credited back to your account, or with a rewards program that will allow you to build up points which you can later redeem to get cheaper goods or services.

If you plan to use your card to fund larger purchases such as home electricals, with the repayments being spread over several months, then the APR of a card is the single most important feature to look for. A low APR means that more of your repayments go towards clearing your debt rather than servicing the interest charges. This means that your debt will be cleared more quickly, and will have cost you less to take out in the first place. It may also be worth looking for a card which offers a long 0% introductory period on purchases, with many cards now offering a deal of 12 months or even longer.

The most common way of spending with a card is to have a mix of large and small purchases, repaying a reasonable portion of your spending each month but sometimes carrying a balance over if funds are a little short. It’s also common to want to transfer a debt from a more expensive account such as an older credit card or an expensive overdraft. For this kind of mixed use, a relatively new kind of card can be a good fit.

A ‘flat rate’ card charges the same low interest rate for each type of card use, whether purchases, balance transfers, or even cash withdrawals. The low interest rate means that your credit costs less and can be cleared more quickly, and the simplicity offered by having just one APR for everything means you know exactly where you stand.

So no matter how impressive a new credit card may seem, with a wide range of eyecatching features, it really pays to decide which one to apply for based on your own needs and spending habits rather than the features that card issuers tell you are the most important!

What You Should Know About Good Credit And Bad Credit

Although the vast majority of adult Americans (and many minors, as well) have some kind of credit to their name or have accrued debt, remarkably few have a strong understanding of how this affects them in their daily lives.

Credit ratings are earned through the accrual of debt and how these debts are paid, be they paid on time, paid late, or if payments go into default. Typically, a person gathers debt in one of three ways: credit cards, automobiles, or homes. Most people build their credit rating (or ruin it) by using a credit card (or cards) that are easily attainable by someone without a credit history. When the individual pays their balance in a timely fashion, a positive rating begins to build. Conversely, when debts are left unpaid one’s rating plummets.

Most ratings range between 500 and 800 points, with 800 being excellent and 500 being poor. The better a person’s credit rating, the lower their interest rate will be. For example, a young person just beginning to build their credit history will tend to have high interest rates between 12 and 22% APR (Annual Percentage Rate — the actual amount the borrower pays in interest annually). After establishing themselves as a reliable borrower (via on-time payments), the individual will usually find themselves paying rates in the single digits.

When it comes time to make a major purchase, such as a vehicle or house, it is especially important to have achieved a high credit score. Large purchases are usually done with a long-term loan and/or a sizeable down payment. When a buyer has a good credit rating they usually get a low APR as well as being required to put forth a smaller down payment. When a buyer attempts to make a large purchase with poor credit, they not only must put more money down, but will usually pay a much higher interest rate and may even have to pay this higher rate over the course of a longer term loan. For example, whereas a buyer with excellent credit may put down a 2% down payment ($2,000) on a $100,000 house and get a 30 year loan at 6%, a person with poor credit may be subject to putting $5,000 to $10,000 to get a similar interest rate (and may still need to extend the loan by an additional 5 to 10 years). Each additional year amounts to several hundred extra dollars paid in interest alone.

By these simple figures, it’s easy to understand that a good credit rating saves the buyer money in both the short AND long term, therefore paying back debts in a timely manner is the best investment.