Setting up a Ltd company (1 Viewer)

Look into getting yourself a good accountant and they will do all of this for you. You should be able to get an initial chat for free, where you can explain your needs

LastGarrison said:

I’m just about to start a new job for an Aussie firm and as they have no presence in the UK I need to start my own Ltd company up.

Just reading through how to set up and get a company registered, apply for a company bank account etc. but as this is completely new to me just wondering if anyone has any tips, must do’s and don’ts in setting up a company and first year of trading etc.?

Thanks.

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I don't think it's too hard to set up the company itself, there are details on the Companies House government website somewhere as I recall. But the surrounding paperwork can be a pain to manage.

There are lots of accountants around who can help. Fwiw when I ran my own little business I used my mate who's also a Cov fan, fwiw. Happy to pass on his details via DM if you want?

Agree with macca, a decent accountant will do a fair bit of the set up and should provide useful guidance. Ask around for some good recommendations

If you’re setting it up on your own consider some of the following:

Decide on on company name
Find domain name (for email) via Names, Godaddy etc
Company house set up is straight forward (check company name is available)
Buy something like Microsoft Business for email, excel, word etc
Bank account could take a little bit of time with checks etc. Think what you need from a bank ie paying in etc, this might depend on type of business and whether cash is involved. There’s plenty of online offerings but you’ll have no interaction through set up process. I set a business bank account at Metro recently and was impressed with how quick it was.

Before you crack on though make sure you’ve got enough cash for business and personal ! Work out approximate set up costs and monthly expenditure and check you can cover this for a period whilst you get the business up and running

All the best

LastGarrison said:

Thanks for all of this.

The company isn’t going to be trading as such and literally I am just going to invoice the Aussie firm and then get my salary paid in and then my plan is then to pay myself a salary out of that account to my private account and leave some money in my Ltd account.

I’ll ensure any payments for work, mobile phone bills, travel expenses etc will come from the Ltd company account but apart from that there won’t be any other money coming in and out as such.

Not sure if any of that makes a difference?

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Sounds straight forward and would also maybe suggest something like Xero accounting to maintain records

However, just be careful with IR35 which is relevant where you only do personal contract work for one company. I don’t know what rules are with contracting with foreign companies but if you had that set up in the UK HMRC might well argue youre actually an employee of that company as you work solely for them. If you can get other contract work with other companies this will help to address this

Im not a tax accountant so worth checking with one if you haven’t already. Bit of a minefield and as I say I don’t know if this is an issue or not with foreign companies…might not be

CCFCSteve said:

Sounds straight forward and would also maybe suggest something like Xero accounting to maintain records

However, just be careful with IR35 which is relevant where you only do personal contract work for one company. I don’t know what rules are with contracting with foreign companies but if you had that set up in the UK HMRC might well argue youre actually an employee of that company as you work solely for them. If you can get other contract work with other companies this will help to address this

Im not a tax accountant so worth checking with one if you haven’t already. Bit of a minefield and as I say I don’t know if this is an issue or not with foreign companies…might not be

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Was just about to mention the IR35 thing if only working for one company - HMRC will likely see you as an employee, even though you're not doing it for tax purposes. I doubt the fact your employer not having a UK presence would make a difference.

It may be you could set up as a sole trader - less bureaucracy and costs - but it depends on the amount of liability the company would place on you if something went wrong as your personal assets could be at risk if they'd dump the blame on you. Check your contract to see what it says or get an accountant to look over it. Either way, also remember to set yourself up for Class 2 and Class 4 NI (I'm assuming you'll be earning over £10k pa!)

In this instance I'd definitely talk to an accountant about the situation just to clarify what you can do. It's an extra expense but it takes the worry and stress out of it and you'll have someone to blame/sue if it's not done correctly.

Macca1987 said:

Look into getting yourself a good accountant and they will do all of this for you. You should be able to get an initial chat for free, where you can explain your needs

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Agree with this. A good accountant will do it all for you and shouldn’t charge too much for that and the day to day work after. I don’t know what we’d do without ours. Read reviews on places like Google, Facebook and Trust Pilot. Also Google their postcode and see how many companies are based there. That’s normally a good indication of how many people and businesses use and trust them.

ive done this, and agree with advice so far, and, depending on the sort of work you will be doing as well, you may need business insurance etc.

I used an accountant in Leamington, who was excellent. Helped me in all areas, and kept me out of jail tax wise Ltd. companies will need a set of accounts each year, which he did for me. You may need to think about shareholders in the new business, which an accountant can advise you on, business address (you can use your own of course, but it might not sound “business like” for your clients. I got a separate phone line in purely for business use. Again, if you get calls, you don’t want all and sundry answering your usual house phone, it sounds very unprofessional.

happy to dm or chat if you need more info, accountant used etc..

Sole trader may be the best way to go with. When you were able to take large Divis within your tax allowance then LTD Co would save you thousands in tax. With Divis now limited to £2000 tax free it’s certain that Sole Trader will be better financially. Also your accounts will be simpler as a LTD Co will require a profit and loss set of accounts. If your wife becomes a zdirector she will also be able to pull down £2000 divi but will need to file a personal tax return as a Director.
you will need to join the HMRC RTI for your payroll and tax, this is quite a chore.
as for IR 35 ensure your contract makes reference to your ability to take on work from other clients.
It’s pretty straightforward there are plenty of templates available.
Also for a Ltd it can be costly and time consuming to close/dissolve at a later date.
Sole trader is far simpler, if starting out now this is the route I would take.

Sbarcher said:

Sole trader may be the best way to go with. When you were able to take large Divis within your tax allowance then LTD Co would save you thousands in tax. With Divis now limited to £2000 tax free it’s certain that Sole Trader will be better financially. Also your accounts will be simpler as a LTD Co will require a profit and loss set of accounts. If your wife becomes a zdirector she will also be able to pull down £2000 divi but will need to file a personal tax return as a Director.
you will need to join the HMRC RTI for your payroll and tax, this is quite a chore.
as for IR 35 ensure your contract makes reference to your ability to take on work from other clients.
It’s pretty straightforward there are plenty of templates available.
Also for a Ltd it can be costly and time consuming to close/dissolve at a later date.
Sole trader is far simpler, if starting out now this is the route I would take.

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How have you got to that assessment?

The sole trader v Ltd. Is not clear cut and depends on other circumstances. I was an ST for about 8 years before going Ltd. And have traded as Ltd. for another 8 since....

ST suited me when I had a mortgage for example as I could offset my business accoung against it which enabled me to pay it off quickly. As an ST it's all your money (and liability) so you have plenty freedom and flexibility.....

I became limited when dealing with international customers for it's original purpose...protection of limited liability so if something gets litigious, I dont lose my personal assets.

Being Limited is nowhere near as tax friendly as it used to be, but it's still fair and can be favourable in certain circumstances.... and on top of 2 x 2k divs tax free, you and you partner can still earn the 12k each per annum tax free as salary and you can also bung up to 40k per annum in a sipp or similar as an employers contribution....which is nice, so it's not all bad....

You'll need your accountant to advise on the VAT status of your invoices as effectively your exporting a service so it may be zero rated, but it may not based upon place of supply, type of service and the location of end user.


Vat notice 741 I think....... rock and roll

SBAndy said:

How have you got to that assessment?

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There are plenty of ST v Ltd calculators on the net. Just fill in your projections and see the result.