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Discussion Starter #1
I was wondering if anybody could offer some advice in setting up my own limited company?

I've just had my contract renewed for another six months and really need to sort this out. Up until now I've been using an umbrella company, but really want to take advantage of the tax benefits I can get from going Ltd and VAT registered.

Does anybody have any experience of doing this? I'd especially like to hear from anybody using a managed limited company.

Is it worth the extra money to have an accountancy company act as company secretary and registered office?


Thanks,



Paul
 

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Piece of cake, you can even buy them online, just follow their process and you instantly have a company registered at company house, you can even pick your own name.
The secretary can be your mum, granny or a partner, depends on how much paperwork you have as to whether or not its worth having accountants to do it for you, just use Sage (most accountants have this) and its just a case of giving them the CD with your accounts on it for them to do your returns.
 
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Are you selling things (VAT) ?
If you are not, then do the returns yourself as it will be easy - if you are going to generate mountains of paperwork (PAYE,VAT,Income Tax etc) and you might go to jail if you get it wrong/dont pay then get an accountant.
The pompous [email protected] Gordon Brown offered some excellent benefits for compaines to become incorporated, then prompty removed them when loads of companies went incorporated.
As a small business, please note that you must get used to doing all the work, paying all the tax, getting strangled by red tape and taking it up the sh|tter to help the those in charge give all your money to rich, corrupt and thieving big businesses that governments seem to love so much.
Glen
 

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senna said:
As a small business, please note that you must get used to doing all the work, paying all the tax, getting strangled by red tape and taking it up the sh|tter to help the those in charge give all your money to rich, corrupt and thieving big businesses that governments seem to love so much.
Glen
Couldnt of put it better myself :(
 

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Discussion Starter #6
senna said:
Are you selling things (VAT) ?
If you are not, then do the returns yourself as it will be easy - if you are going to generate mountains of paperwork (PAYE,VAT,Income Tax etc) and you might go to jail if you get it wrong/dont pay then get an accountant.
The pompous [email protected] Gordon Brown offered some excellent benefits for compaines to become incorporated, then prompty removed them when loads of companies went incorporated.
As a small business, please note that you must get used to doing all the work, paying all the tax, getting strangled by red tape and taking it up the sh|tter to help the those in charge give all your money to rich, corrupt and thieving big businesses that governments seem to love so much.
Glen
Thanks everybody.

I'm not expecting to have a lot to do really. Like I said, I've been using an umbrella company for a while now, and they really aren't having to do much.

I'm a computer programmer\consultant, contracting, so am only providing my client with a service. I also have several smaller clients I invoice which keeps me out of any IR35 problems, as I'm not seen as being employed by only one company.

I'm not selling anything, but apparently have to be VAT registered as my income is more than £50k. I guess this means I can take advantage of claiming VAT back though.

I'm guessing all I need to do is invoice once a month and sort out my tax. Is there anything I'm forgetting?

Paul
 

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I think the VAT threshold is now £56600 .. if you can stay non vat then do as you will have to pay vat on what you earn.

Put it this way as a mechanic I sell my services (oooerrr) by the hour as no doubt you will, so non vat I charge say £40/hour if I am Vat registered I have to charge 17.5% ontop of the £40.

Being Vat regestered is not a great thing, only if you are buying in a lot of equipment etc that you will not sell at a later date.

You always have to remember that for every £100 that comes your way £17.50 of it is not yours :) so really its £80.

So when you get that big cheque at the end of the month for £10,000 remember £1750 of it aint actually yours, then of course you will be paying tax ontop of that and NI ..... so really that 10G cheque is now £4500 in your hand ..... good luck :D
 

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Crail Loser said:
You always have to remember that for every £100 that comes your way £17.50 of it is not yours :) so really its £80.

So when you get that big cheque at the end of the month for £10,000 remember £1750 of it aint actually yours, then of course you will be paying tax ontop of that and NI ..... so really that 10G cheque is now £4500 in your hand ..... good luck :D
Your maths isnt up to much mate. There are benefits from becoming vat registered. Remember everything you buy includes vat.
 

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ADAM M said:
Your maths isnt up to much mate. There are benefits from becoming vat registered. Remember everything you buy includes vat.
Perhaps I am just realistic and jaded, ok so everything I buy includes vat ... so what about my labour ... I buy that in do I?

Any part I buy in I get the Vat back on but then have to charge it again as soon as I sell it.

The only think I get Vat back on is Gross expenditure (ie items I buy for the sole purpose of running my buisness that will not be sold in the future such as ramps, tools etc) and consumables such as barrier cream, gloves, spray etc. Actually I guess if I added those onto a bill I would pay tax on them as well :)

So of all the goods I buy in to do a job I will sell 95% of them again so I gain 5% of my vat ... but I have to pay VAT on my labour which I did not buy in so ... I still owe way more to the Vat than they owe me.

Once again the only advantage to being VAT registered is on initial expenditure or gross expenditure on equipment ... anything else you have to pay VAT on so although you may get it back initially you just have to hand it right back anyway, lol.

For the guy that started the thread the answer has simply got to be dont be VAT registered if you can help it, apart from the increase in paperwork that you dont get paid to do on a labour based buisness there is no point to it.

Say you want 100/hour for doing a job ... non vat you charge £100/hour

If you want 100/hour and you are vat registered you will have to charge £117.50/hour.

Extra paperwork as well remember .. for what so you can get your tax back on your tea and sugar in the morning :D

Fair enough many of the buisnesses he works for will be able to claim the vat back but having been non Vat registered for 3 years and being Vat registered now for 12 years ...... non Vat is the way to go :D
 

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Discussion Starter #10
Crail Loser said:
I think the VAT threshold is now £56600 .. if you can stay non vat then do as you will have to pay vat on what you earn.
The problem is I'm never going to fit in that bracket, so non VAT isn't an option. I currently have to charge VAT on my daily rate anyway, so it just a case of me doing it rather than my umbrella company.


Paul
 

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Paul - send me your e-mail address re:IR35 S660 et al and how to structure the limited company to mitigate the above wherever possible.

Steve
 

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Paul is going to be working with other VAT registered companies anyway most likely, so charging VAT on his services is irrelavant. I work the same way, you always quote your daily rate exclusive of VAT, much like mechanics :mad: The only difference is when a company gets the bill they offset the VAT where as members of the public have to swallow the shock of their bill going up by 17.5% when they come to get their car back :)

Oh and Paul, get an accountant. My account charges about £900 a year for all tax returns both personal and company and also deals with any of the suprising changes in tax law that come along. It's well worth it as I do no paper work barring sending invoices and day to day accounts on Sage. When I say "I", I of course mean the wife :)
 

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ir35

Ive been through an ir35 and full aspect investaigation, and came out the other side due to my accountant. They are bruceallen and they do a great job. I pay about £100/month all in, they can even raise invoices from timesheets if you like.

My advise would be, dont do it yourself, you work in IT not accountancy. Pay for someone to get you going.

I used a "legal accoutant" to help through my investigation. Well it didnt help and he/they pi55ed off the tax man and got me in more trouble. I ended up meeting the investigator and got it all sorted.


Steve
 

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Discussion Starter #16
Thanks again everybody, and thank you Steve for the email.

I've had lots of links sent to me for Accountancy companies that will set it all up for me. I'm going to see what they offer.


Paul
 

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Ltd company

I have done this in the past and had no problems until I wanted to close the company down.

After being hounded by the taxman for 5 years and all the hassle and cost I had to go through. I would never of started my own company.

You might think you are better off but in the long run I don' think there is much in it. If I had to go contracting again I would stay with an umbrella company.

At least you know what you get in you pay packet is your own and you don't have to worry about the accountant or tax man.

Thats my 2 pennies worth from someone who got burnt and i used an account and did everything by the book.

Kev
 

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kgleeson said:
Thats my 2 pennies worth from someone who got burnt and i used an account and did everything by the book.

Kev
Speaking from personal experiance that is where you went wrong, I did the same and got confronted with a bill for £68K from the VAT man, I stupidly declared myself bankrupt and closed the buisness.

Anyway, long story short my Trustie went to court to ask the VAT to prove I owed them the money and it turns out I only owed them £4600 :confused:

So 5 years bancrupcy for f all, thanks very much :mad:

When I questioned the VAT inspector about it the reply was .. "oh we always over estimate, we expect you to be fiddeling so we just chuck in any old figure. If you pay it we obviusly set it too low so make it more the next year."

Thanks very much for fecking up my chance of ever getting a mortgage in my own name for the next nine years :mad:

Recently we moved premises and sent in a direct debit to pay our NI ... we recieved a phone call about 2 months ago ... you owe £8+K in NI.

Reason, they lost my direct debit form and never noticed. End result they wanted me to pay the 8K up front :confused:

When I said sod off (mostly through beligerance I may add) and that they would have to accept me paying it up, so they took me to court. After 2 months ****ing about I now ...... have to pay them up, lol.

Anyway point was on one phone call they asked me how much me and my wife earn, how much I spend on food and how much my mortagage is.

When I told them the reply was "ohh thats an awfull lot isnit it, you should really think about moving to a smaller house"

I kid you not, shower of ignorant money grabbing scum, I had evey bit of respect and time for them nearly 20 years ago when I started but now all that has been eroded away to a deep resentment and hatred for them. Incompetant, aroggant feckpigs who delight in the misery of others.

I would gladly take delight in hunting them down and destroying there lives over a prolonged period of time, seriously I want to do it and I would relish each minuet of anguish and pain that they would feel.
 

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looks like a few people have had bad experinces (68k VAT bill:eek: ) - if you set things up right, get the correct advice and plan for what will be due (i.e it's not your money it's the compaines), IMHO it's the only way to go and not via umbrella companies, but hey it's whatever is best for each specific individual. I've been running my own company(s) since 1991, been audited on numerous occasions by HMC&E and IR and had no issues.

good luck whatever way you decide.
 

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I formed a general opinon that anyone that works for any government department, i.e. Local Council Finance offices, DVLA, DWP, Tax Inspectorate etc is a f*ckwit. I work on this principle until the person infront of me proves me wrong. So far I have only been proved wrong once in my dealings with "them".

I apologise to anyone working in the civil service but common, you must have met them in the office :mad:

Lets face it, who wakes up one day when they are 15 and thinks, I know I am going to work for my local VAT office when I grow up, where I will be under paid, over worked and have people shout at me every day. Not many people... the ones that end up in there for the most part are morons and don't have two brain cells to rub together, yet they get to calculate my taxes :eek:
 
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