How to set up limited company

[banny07]

Hi Guys,
I want to set up a ltd company.Could someone guide to right direction where to start procedure and how much it will cost. Cheers

 

[Octopus]

An accountant is the place to start ...... It's more complicated than you think.

Why do you want to go limited?

 

[banny07]

An accountant is the place to start ...... It's more complicated than you think.

Why do you want to go limited?

not many agencies pay CIS. I sent my tax returns for 2016/17 and was told by accountant that as payments were over 45k I have to pay more tax instead of of getting anything back.

 

[Octopus]

Hum. That's the reward for hitting the next tax rate ....

It's not just about payments to you ... What about your tax deductable expenses?

 

[Squid]

As above speak to an accountant setting up as a director costs about £20 for an of the shelf entity.

For the shares you are advised to issues 12 shares then you get a basic pay of about £640 per month minimum NI pay in and any pay you receive will b in dividends, keep all receipts you can also go zero VAT route as well as it saves you a few pennies, I was in IT contracting and was LTD Co and the money coming in was far better then PAYE or Umbrella Co.

You need to know what your earnings are as if they are low it may not be worth it I think over £45k might be okay but again speak to an accountant.

 

[Octopus]

George Osbourne made changes to de-incentivise taking dividends rather than paye

 

[banny07]

As above speak to an accountant setting up as a director costs about £20 for an of the shelf entity.

For the shares you are advised to issues 12 shares then you get a basic pay of about £640 per month minimum NI pay in and any pay you receive will b in dividends, keep all receipts you can also go zero VAT route as well as it saves you a few pennies, I was in IT contracting and was LTD Co and the money coming in was far better then PAYE or Umbrella Co.

You need to know what your earnings are as if they are low it may not be worth it I think over £45k might be okay but again speak to an accountant.

At the moment it is going to be over 45k but thinking what will happen if I go limited but can not reach 40k . Will there be a penalty?

 

[Gavin John Hyde]

The penalty is costs in admin and doing your accounts. Around 4 or 5 hundred a year unless you do it yourself

 

[Deleted member 26818]

Just type in Limited Company into your search engine, and you will get loads of sites which will sell you a Ltd Co for less than £30.
Some sites also offer to arrange a business bank account.

 

[banny07]

The penalty is costs in admin and doing your accounts. Around 4 or 5 hundred a year unless you do it yourself

Can I be ltd and cis same time?Cheers

 

[Toneyz]

Can I be ltd and cis same time?Cheers

You are better to speak to an accountant, by all means, look at the internet for information but I wouldn't use it directly to set yourself up.

 

[Deleted member 26818]

Once you have obtained a Ltd Co., you will have to register it with the CIS people as a Contractor.
They will issue the Ltd Co with a UTR No.
To use the Ltd Co for agencies, you will need Public Liability insurance. How much insurance (1mil, 2mil etc.) The Ltd Co will need, will depend on the various Agencies.
For the Ltd Co to be paid by the Agencies, you will need the Companies House registration number, the LTD Co’s UTR No., the Ltd Co’s bank account details and a copy of the Ltd Co’s public liability insurance.
You can let the Ltd Co. employ you as an employee, or as a sub contractor.
In either event, the Ltd Co. will have to file end of year accounts with PAYE/CIS, Companies House and Corporation tax.
Depending on how you pay yourself, you will probably have to file a self assessment.
Tax will be deducted at source, unless you can persuade tha CIS people to allow the Ltd Co. to be paid gross (unlikely in the first year of trading).
You will have to ask for a form from the PAYE/CIS people to offset the deducted tax.
I believe Santander do a free business account, most of the other banks will start charging after 18 months or 2 years.

 

[banny07]

Thanks for detailed information you gave.I think I need to speak to an accountant. what will happen to utr number I already have.Can this be not used?Can I use my own address as business address or I have to use accountant's office as my address. Cheers

 

[SJD]

A Ltd company has its own UTR number, different from your personal one (it is a different legal entity).

You can use your own address as the registered address if you wish.

 

[derek]

You also probably have to submit monthly PAYE returns to HMRC as well as part of their real time reporting. You can pay an accountant to do this for you or you can download a program from the HMRC website that you can use to send your EPS or FPS returns and notify HMRC of any CIS deductions that have been taken from your Ltd company's income by the agency or client.
You could go to Companies House website and set up your own Ltd co for £13 or there about, but there are a lot of processes and legal requirements you'll be liable for as a director.