Setting up a Limited Company

[kingkerouac]

Hello guys,

 

I've been out of work since I was made redundant in May.

I've been told there may be some freelance work for a London Ad agency in a week or two, but I was told I would have to be a Limited Company.

I've read up the government guide, and it kind of tells what I need to do as far as setting up a new bank account and employing the services of an accountant.

Does anyone have any recent experience of doing this, and maybe offer some advice regarding things not to do etc?

 

Thanks and I appreciate any advice.

[AyeDubbleYoo]

Been a limited company contractor for a few years.

 

The set up process is extremely quick, can't remember how long but we're talking minutes. Obviously then you become responsible for running it.

 

If you get a decent accountant they will tell you how to keep records and when to submit tax returns, accounts and all that. You just need to record expenses and sales really, you can calculate everything else off that.

 

I use Crunch, which is an online accountant, but it's quite expensive. There are probably cheaper options that are just as good.

 

You'll need to submit a personal self assessment tax return in future as well, which is probably the most annoying bit.

 

Any questions, holla at me.

[neesy111]

You'll need to find out whether it's inside or outside of IR35 as well.

[AyeDubbleYoo]

If they're telling you to get a limited company it's likely it's outside, otherwise they'd be telling you to use an umbrella company. Do ask though, yeah.

[mrmojorisin75]

Dubya covered most of it there I would say, it's a piece of piss really but def check IR35

 

Also how long are you anticipating it lasting?  Might be more beneficial to do umbrella or something similar if it's only gonna be a one off for example.

[kingkerouac]

Dubya covered most of it there I would say, it's a piece of piss really but def check IR35

 

Also how long are you anticipating it lasting?  Might be more beneficial to do umbrella or something similar if it's only gonna be a one off for example.

 

I enquired about that this morning, whether they wanted sole trader, umbrella company or Limited Company.

They definitely want me as a LC.

Thanks for all of you info and answers.

Incidentally Ian, what's the advantage of an online accountant if it's the more expensive option?

[Lazarus]

Setting one up is the easy part - its only £12 or £13 at companies house.

 

Whether its the best thing for you to do is another matter - ALWAYS get advice to see if it is.

 

Im my case it is. im the director of a limited company and I can take a tiny salary (which qualifies for NI and paye) but then receive a dividend payment (which is taxed at a lesser rate than income tax).

 

But depending on your circumstances, there is also VAT (paying and reclaiming), corporation tax (at 20% of profit), business insurance may be needed, registering as an employer with HMRC, there are tax returns, possible audits, covid19 business support such as the revised furlough scheme may or may not apply, companies house ongoing confirmation statements, possible registration with the information commissioners office, ongoing accountancy and legal fees and more.

 

Theres also possible legal action in the future by HMRC if they decide you have joined scheme to avoid/evade tax like this bloke, https://www.bbc.co.uk/news/business-54604132.

 

So get some advice first.

 

 

 

 

[AyeDubbleYoo]

The online accountant thing just gives you a nice interface and software for tracking your business. Then your account manager uses that to produce all of your company documents/returns. Also the same software generates invoices and tracks payments etc.

 

TBH if you have a decent accountant and track everything in some consistent way you’ll be alright. I kind of wish I hadn’t signed up to them, but it’s hard to extract now

[kingkerouac]

Setting one up is the easy part - its only £12 or £13 at companies house.

 

Whether its the best thing for you to do is another matter - ALWAYS get advice to see if it is.

 

Im my case it is. im the director of a limited company and I can take a tiny salary (which qualifies for NI and paye) but then receive a dividend payment (which is taxed at a lesser rate than income tax).

 

But depending on your circumstances, there is also VAT (paying and reclaiming), corporation tax (at 20% of profit), business insurance may be needed, registering as an employer with HMRC, there are tax returns, possible audits, covid19 business support such as the revised furlough scheme may or may not apply, companies house ongoing confirmation statements, possible registration with the information commissioners office, ongoing accountancy and legal fees and more.

 

Theres also possible legal action in the future by HMRC if they decide you have joined scheme to avoid/evade tax like this bloke, https://www.bbc.co.uk/news/business-54604132.

 

So get some advice first.

 

I have no choice. This is the only way I can get work as a freelancer now.

The company who are offering the work, have requested that I be a Limited Company.

My wife has an old friend who is an accountant, I will have a meeting and discuss these points you've raised.

Phew, that Loans/Tax thing sounds a bit unfair, but it's no longer a thing, thankfully.

Thanks for all your advice.

[kingkerouac]

The online accountant thing just gives you a nice interface and software for tracking your business. Then your account manager uses that to produce all of your company documents/returns. Also the same software generates invoices and tracks payments etc.

 

TBH if you have a decent accountant and track everything in some consistent way you’ll be alright. I kind of wish I hadn’t signed up to them, but it’s hard to extract now

 

Thanks Ian.

[Guest Howaythetoon]

Stick to sole trader, no need for limited company right now unless partnerships/VAT registered etc.

[neesy111]

Stick to sole trader, no need for limited company right now unless partnerships/VAT registered etc.

 

You need limited company for IT contracting/freelance purposes, it's still the most efficient way tax wise.

[Guest Howaythetoon]

Anyone requesting trade partner be LTD company just doing it to satisfy their own accountancy terms and liability, tell them to fuck off if you can. Understand not entirely possible in today’s climate, but...

[Guest Howaythetoon]

Stick to sole trader, no need for limited company right now unless partnerships/VAT registered etc.

 

You need limited company for IT contracting/freelance purposes, it's still the most efficient way tax wise.

 

Not sure on that, not my field, but I’d double check that, no need to be a LTD company today unless partnership/x number of employees/vat registered

 

IMO anyway

[neesy111]

Stick to sole trader, no need for limited company right now unless partnerships/VAT registered etc.

 

You need limited company for IT contracting/freelance purposes, it's still the most efficient way tax wise.

 

Not sure on that, not my field, but I’d double check that, no need to be a LTD company today unless partnership/x number of employees/vat registered

 

IMO anyway

 

I've done IT contracting and it's the best way by far to go is limited company if you're outside of IR35 and I don't know a single person in IT that's a sole trader.

[Guest Howaythetoon]

Stick to sole trader, no need for limited company right now unless partnerships/VAT registered etc.

 

You need limited company for IT contracting/freelance purposes, it's still the most efficient way tax wise.

 

Not sure on that, not my field, but I’d double check that, no need to be a LTD company today unless partnership/x number of employees/vat registered

 

IMO anyway

 

I've done IT contracting and it's the best way by far to go is limited company if you're outside of IR35 and I don't know a single person in IT that's a sole trader.

 

Like I say not my field, seems strange to me though