As the heading suggests i’m looking into the possibility of setting up my own LTD company and am looking for some advice from people who currently do this themselves. I have tried to read up and research as much as possible myself but any info ranging from the different stages involved, any recommended accountants to use, whether its best to approach companies direct or still go through agencies and just general tips and advice would be good. Although saying that I’d rather it didnt turn in to the usual PAYE v S/E debate that has been done to death as I am fully aware you build/account for things like loss of holiday/sick pay, pension etc into what you charge or work for.
After giving up a permanent job I have worked through agencies the last few months (the flexibility suits me before anyone comments on giving up a permanent position), I’ve been an employee before and like the fact the agency work allows me to work when I want to and can move my working week accordingly with family commitments, Also I can have time off when I want too and not whether my boss says yes or no. However most of the agencies i’ve worked for use the dreaded umbrella schemes. While I dont like them I’ve unfortunately accepted the fact that most are going to use them as its to their benefit and I want the work. I am aware that some still operate only on a PAYE basis but they seem to be few and far between and the percentages suggest you have to bite the bullet and accept the umbrella’s like it or not. This is pretty much my main reason for wanting to form my own LTD company so I can get away from paying them £22.50 a week for effectively sending me a payslip and then claiming that everything under the sun can be claimed for and offset against my tax. Not sure Mr Taxman would agree though.
Its a lot easier than it sounds. Lots of advice on the net is from companies who want to make a few quid from you. All of it can be done DIY.
1 - Go to companies house website and register a company. Takes a few days. About £15. Forms and help to guide you through it.
2 - Your company needs a bank account. I use Cashplus, does everything you need for free after a set up fee. About £20.
3 - Go to HMRC and register for corporation tax and PAYE (You will be paying yourself) as an employee.
4 - Consider registering for flat rate VAT. Not much hassle and i think i can get back about £1000 a year. Upto you. I think it adds a bit of credibility to your company in the eyes of HMRC.
5 - You need to keep accounts. Decide if you will use an accountant or go DIY. If accountant ask them to suggest what free book keeping package they would like you to use.
6 - Remember you will need to do your own tax self assessment as a company director.
Happy to help out if you need more advice. Just PM me.
^^^^^^
Calsdad has covered the main points very well. As he said, it is easier than it sounds. Over the years I have had a few.
I would advise finding a decent accountant - not necessarily an expensive one - maybe someone local who knows his/her stuff and you feel comfortable with. The right accountant will certainly save you more money than he/she will charge you as long as you get one who works for you, not just someone who knows the system.
Are you married or with a long-term partner? If so, it may well be worth making them a 50% shareholder - with you as the (only) director. This will mean two of you will qualify for annual tax-free dividend payments (so twice as much tax-free allowance).
A decent accountant will soon advise you on what to do.
If you have more specific questions I will try to answer them or point you in the right direction.
No need for a Ltd company as there is no particular risk involved on your part, do it but as a ‘sole trader’, £2.65 inc NI per week (if I remember correctly) and register for Self Assessment for tax purposes - simples!
Andy if he goes ltd company then he won’t have to pay any NI at all also he’ll need it to get work as his customers will be paid his company and not him directly
As always lots of useful info so thanks for that guys. I’m not going to get chance to get started till mid-week as i’m either working or am out on social commitments all weekend/early next week. I’ll do some exploring and make some phone calls and see how I get on but calsdad and alan thanks for your info and I may pm if im struggling for anything.
tmcassett:
As always lots of useful info so thanks for that guys. I’m not going to get chance to get started till mid-week as i’m either working or am out on social commitments all weekend/early next week. I’ll do some exploring and make some phone calls and see how I get on but calsdad and alan thanks for your info and I may pm if im struggling for anything.
As said get yourself a good accountant but try to do most of books yourself so less for them to do cheaper for you
As a ltd company you can set it so you pay no NI or Tax ( mate of mine does this he get about 80% of his wages ) although does pay corporation tax but still better off
animal:
As said get yourself a good accountant but try to do most of books yourself so less for them to do cheaper for you
As a ltd company you can set it so you pay no NI or Tax ( mate of mine does this he get about 80% of his wages ) although does pay corporation tax but still better off
I’ve recently set up a ltd company, and had an appointment with an accountant the other day. I had a rough idea on how things worked, and how I’m likely to be better off, but having gone through some figures with him, on all 3 scenarios, ltd, self employed and paye, its a lot clearer as to how much better off I’ll be.
