Going Limited? Package or Accountant?

[BigSi]

Hi guys, after a little bit of advice.


I’m currently sub-contracting to a large company through a recruitment agency. One of the managers asked if I had ever thought about subbing direct to them on a labour only bases (day rate & price work). They have a lot of work coming up (working for them for about three months, and stacked out!).


He said that all I would have to do was to become a limited company. He tried to explain that if your non-limited then your account with them only gets accessed for one day every so often when It comes to submitting invoices and being paid. But if you’re limited then your account remains open and readily accessible...............or something like that!


Question is, can I just pay one of these online companies for package, or go to an accountant for them to sort out?

 

[kduck]

Not sure what a limited company makes to getting paid. To be a limited company you need two directors you will also need to submit mins of your meetings each year. Not sure if the law on this bit about mins of meetings has now change, but your accountant’s bill will be double what it is now. You will be paid in shares and dividends. So its not something you can do your self also the other director needs to provide if asked what his/her role is in the company

 

[IQ Electrical]

Not sure what a limited company makes to getting paid. To be a limited company you need two directors you will also need to submit mins of your meetings each year. Not sure if the law on this bit about mins of meetings has now change, but your accountant’s bill will be double what it is now. You will be paid in shares and dividends. So its not something you can do your self also the other director needs to provide if asked what his/her role is in the company

Not so now, you need a director and a company secretary but the director can now assume both roles.

A friend of mine recently used Blue Sky Company Formations | UK Company Registration for Entrepreneurs | Specialist Company Formation Service and found them to be excellent-fast and cashback too!

 

[Big n Daft]

Go and get yourself a Lawpack from Staples or WHSmith etc. This will take you through the process and supply forms and guidance. We keep the books ourselves and the accountant does the year end stuff.
Thats the cheapest way to do it, this also gives you an understanding of whats required and you are always in control of whats happening.

 

[Octopus]

I'd be asking why you need to be limited to do work for them. Would they consider you being a sole trader?

 

[topquark]

I'd agree with what's been said already, there is no obvious need to be a limited company for this. Unless the company you are dealing with has a requirement to only deal with limited companies. Limited company setup through an accountant will cost around £200. Going through a company formation company will cost around £50. You can even do it yourself through companies house.

If you have a limited company you will also require a company bank account! You will be required to submit annual returns and file your accounts with companies house.

This seems like a lot of overhead to satisfy one client. You'll also need to be carefull if you only have that one client as HMRC will deem you to be employed by that client for tax purposes!

 

[IzzyS]

Be wary of IR35 - you may be deemed to be an employee if you mainly work for one client. Also, as a limited co. you'll also need employers liability insurance (in addition to any PLI you may have already). As you will be an employee of your own co. you need to run a payroll for yourself, which is a PITA. And you need professionally audited accounts every year. It's definitely worth speaking to a chartered accountant, as company law changes more often than BS7671.....

 

[Christhesparky]

I set my limited company up through "the formations company" i took their basic package, cost me £5 and i got £30 cashback when i opened my business account at barclays

 

[topquark]

Be wary of IR35 - you may be deemed to be an employee if you mainly work for one client. Also, as a limited co. you'll also need employers liability insurance (in addition to any PLI you may have already). As you will be an employee of your own co. you need to run a payroll for yourself, which is a PITA. And you need professionally audited accounts every year. It's definitely worth speaking to a chartered accountant, as company law changes more often than BS7671.....

You won't need employers liability insurance if it's just yourself in the Ltd Co.

 

[cr0ft]

Personally I don't think it's that much hassle if you are a one-man band. Tax is also quite a bit less as a limited company, 19% now and dropping again next financial year I believe.

Cost me £35 to set mine up and for me the protection that's afforded in that my business finances are totally separate from my personal finances is worth it many times over!

 

[telectrix]

one advantage of being ltd is that the company you sub to will pay your invoice in full. if not ltd, then they will deduct tax as per CIS ( about 18% )

 

[Caerdydd]

Have used these people in the past and they've been good.

Companies House Registration and Reports by Duport

You no longer need a company secretary either, you can just have a sole director.

Don't forget you will need public liability for the company, and if you instruct anyone or ever have someone working for you then you also need Employers Liability (£10m min).

 

[IQ Electrical]

one advantage of being ltd is that the company you sub to will pay your invoice in full. if not ltd, then they will deduct tax as per CIS ( about 18% )

Hang on Tel, the Limited Company is still subjected to exactly the same CIS deduction rates and criteria as an individual or sole trader, the Limited status makes no difference in this situation.

 

[cr0ft]

+1 to that. I have subcontracted to other firms in my early days of my business and I had CIS deducted.