All UK workers have to pay Income Tax on their earnings once they reach a certain threshold.
There are a few ways to do this, such as filling out a tax return and paying it in lump sums.
Another way is to deduct tax and National Insurance every time you’re paid, known as Pay As You Earn (PAYE). The amount due is worked out by HMRC and then deducted by the employer – sounds simple doesn’t it?
For contractors, it’s not that easy. That’s because as an independent professional, you’ll be expected to work out how much tax you’ll need to pay. This could result in hours of paperwork and potentially costly mistakes.