I'm thinking about doing a bit of contract work and setting myself up as a limited company.
Has anyone on here done this and if so how did they do it and how much would i need to outlay up front to do this?
Plenty of accountants on here johnny so they should be able to guide you under the old Board ethos of freebies for friends!
Johnny
Is this for Norn Iron or Republic of Ireland.
If it's Norn Iron I'm oot.
I can help for ROI if you pm me.
Looking to do this myself in the north. Any advice appreciated.
I overheard a lawyer talking about this on the train last week.
There is a company in Belfast that keeps a supply of off-the-shelf limited companies. You buy out one of these companies for a nominal sum, and at your first "board meeting", rename the company to whatever you like, and then re-arrange the finer points like dividends and liabilities. You pay the "company shop" for advice through the procedure.
http://www.thecompanyshop.co.uk/company-formation/shelf-company seems to be along those lines.
Like Shamrock I'd be ROI based.
One thing I would say, in the ROI anyway, setting up a company is easy, plenty of company formation companys about who will do the whole lot for a 200/300 euro.
Steps are to get company set up (use a company formation company), set up bank account and then register for tax. You will normally all these in place before you do the admin work (need company name/number, tax/vat number etc).
But the one big thing about setting up and trading in a company is the compliance (company returns, audit/audit exempt) and then ceasing trade. Not just a matter of walking away, there is steps to be done to either liquidate a company, get it striked off plus the whole area of getting paid from a company. If you plan to make a few quid, obviously a company is the way to go for tax planning and limited how much tax you will pay on profits rather than trading as a sole trader and paying personal tax on all profits.
Quote from: Bingo on August 23, 2011, 03:05:29 PM
But the one big thing about setting up and trading in a company is the compliance (company returns, audit/audit exempt) and then ceasing trade. Not just a matter of walking away, there is steps to be done to either liquidate a company, get it striked off plus the whole area of getting paid from a company. If you plan to make a few quid, obviously a company is the way to go for tax planning and limited how much tax you will pay on profits rather than trading as a sole trader and paying personal tax on all profits.
Personally I wouldnt set up a company, if I was a one man business and was going to stay that way. Too much compliance costs.
Although I would if I was planning on re-investing, acquiring another business or just getting much bigger. Or if I thought "limited liability" might come in handy!
As a company, you'll still have to pay yourself a salary, which will be taxed at the normal income tax rates. You'll pay tax on whatever's left. If you subsequently decide to pay that out (after you've already paid corporation tax on it) as a dividend or salary, you'll be paying it out of after tax income, so effectively you'll be double taxed.
It's in the North I need to set up a limited company.
The only other option I have is through an agency and they're looking to cream 10% of all my earnings so that's why I'm looking at the limited company option.
Company wizard set these up online, if you're the only director would this not be sufficient, £30 would cover it
if you go to companieshouse.gov.uk, there is a form IN01 which you can complete and send to Companies house together with £40 to register the company. (you will also need to send memo of association).
The company shop can do all this for you, not sure what they charge for this now though. They wil also give you advice for preparing minutes for AGM etc.
Word of warning in relation to the contract work- check out IR35 tax legislation, in particular the dragonfly case.
If the HMRC feel you are a limited company in name only, they can enforce to calculate your tax liability on a self employment basis, and rendering the tax benefits of a limited company redundant.
Complete the process in 5 minutes online via Companies House, Option 1 >>> http://www.companieshouse.gov.uk/infoAndGuide/companyRegistration.shtml
Costs £18 in total.
Quote from: The Worker on August 23, 2011, 07:32:41 PM
if you go to companieshouse.gov.uk, there is a form IN01 which you can complete and send to Companies house together with £40 to register the company. (you will also need to send memo of association).
The company shop can do all this for you, not sure what they charge for this now though. They wil also give you advice for preparing minutes for AGM etc.
Word of warning in relation to the contract work- check out IR35 tax legislation, in particular the dragonfly case.
If the HMRC feel you are a limited company in name only, they can enforce to calculate your tax liability on a self employment basis, and rendering the tax benefits of a limited company redundant.
Even that would be better than losing 10% to an agency and also paying full tax and NI stamp!!
Sadly I think that you will find out that all loans/ contracts etc will also have to be personally guaranteed nowadays.
Best of luck anyhows.
Quote from: balladmaker on August 24, 2011, 12:12:59 AM
Complete the process in 5 minutes online via Companies House, Option 1 >>> http://www.companieshouse.gov.uk/infoAndGuide/companyRegistration.shtml
Costs £18 in total.
All you need!
It did used to be a bit more complicated (not that much) so The Company Shop and places like that were able to make a business out of setting up cos for people, but Companies House have made it a lot easier within the last year.
You'll have to file an Annual Return and accounts which I suppose will be an extra admin burden, but you're probably doing accounts anyway for your tax, and the AR fee is only £15 or so if done online.
Quote from: johnneycool on August 24, 2011, 11:01:46 AM
Even that would be better than losing 10% to an agency and also paying full tax and NI stamp!!
Aww god love ye ;)
Should save you between 7.5% - 10% in income tax through taking dividends instead of salary, but then remember the divs are taxed at CT rates (20% for small company profits) before being added to your taxable income.
Thanks for all the advice, links and PM's.
Much appreciated.
Best of luck johnneycool it takes balls setting up a business nowadays.
Thought about going limited myself a few times but the sole trader route just suits me better.
What is it the company your starting is gonna do?
Times are tough enough at the moment but there is still work out there and I'm motoring along nicely (despite what Dinny would love to believe :D ) nothing like it use to be but still kept fairly busy all the same.
Oh and if you get any advice off Shamrock Shore then take it he knows what he is talking about!
Quote from: Canalman on August 24, 2011, 12:17:03 PM
Sadly I think that you will find out that all loans/ contracts etc will also have to be personally guaranteed nowadays.
Best of luck anyhows.
+1
you'll have to give personal guarantees to get credit
Resurrecting this one. Am finally going to give it a go and go out on my own. Have secured a contract in the south but an currently living in the north but hoping to relocate within the next year or so.
I need to set myself up as a limited company as soon as possible, should I be doing that in the north or the south or will it make any difference?