If you’re having trouble getting your head around contracting and how your business will look then it’s important to do a little research before diving head first into the first option you come across. What type of business you set up, whether it be a limited company or umbrella, drastically changes the way you go about getting paid for your work, and the amount of administration that comes with it.
Brookson bring you a quick guide to Limited companies and how they differ from an Umbrella company.
Setting up a Limited company takes little to no time at all when you go through the process correctly. First things first, picking a name is important for a Limited company as no two limited companies are allowed to share the same moniker. So your company name should be fresh and unique, that keeps your chosen industry in mind while also giving it your own take. It’s a good idea to check online for an available domain too so that when you get to creating your own online space, your name isn’t taken.
Secondly, you need to decide on the number of directors that your company will have, you need at least one, with there being no official limit on the amount that you can have. Based on the guidelines on the gov.uk website, a director must:
●Try to make the company a success
●Make decisions on behalf of the company and not personally
●File a Company Tax Return and pay Corporation Tax
●Keep company records and report changes to Companies House and HM Revenue and Customs (HMRC)
●Follow company rules
●Register for Self Assessment and send a personal Self Assessment tax return every year
●Tell other shareholders if you might personally benefit from a transaction the company makes
If you intentionally or accidentally do not follow these guidelines then you could end up facing penalties. A good specialist accountant can help you face these duties and guidelines so ensure to research before taking on this responsibility.
Lastly, you can finalise setting up your new limited company, by visiting the Companies House website. Some accountants may cover the small cost of setting this up, it’s best to speak to them before to ensure that you don’t assume they will.
Providing the Companies House with each directors residential address or a service address if you want to keep details off the public register.
The entire process doesn’t take very long at all, especially when you stay in communication with your accountant throughout.
Get in touch with a specialist contractor accountant today such as Brookson, they can help you every step of the way to ensure that no box goes unticked, ensuring that you don’t face any penalties along the way.