As a contractor, choosing to set up as a Limited Company means you are able to directly benefit from a system that is extremely tax efficient.
If you feel that going Limited may be the next step for your career as an independent professional, this guide will help you learn more about the three necessary steps involved in going limited.
Register your company
This is the first hurdle to get your company officially set up; although this may seem like a longwinded task it can actually be achieved within a matter of hours. Once you have decided on a name for your company and what address it will be registered to, you can then go on to register your newly established business online through Companies House.
This process itself requires a small fee, dictating you appoint someone to the roles of secretary and director. It’s fine for these positions to be held by the same person, as is the case when contractors set themselves up as single person Limited Companies.
Organise your finances
Your Limited Company is seen as independent in terms of the law, therefore it’s regarded as a person. Consequently it must do business under its own name. A Limited Company can generate debts and is liable for taxes. These must all be handled through its own bank account. It is crucial for your business to open a bank account and register for VAT with HMRC.
You can benefit from dealing with a bank or building society that you already have an account with when deciding who to bank with. Alternatively, obtain a referral from an accountant.
Choose an accountant
Working with an accountant means you benefit from not only saving time but also removing the stress of dealing with the complexities of HMRC legislation. An accountant will also provide expert advice when dealing with matters regarding VAT registration and registering for corporation tax. Further issues your accountant can assist with include handling taxes, expenses and invoicing.
If you’re a contractor that is considering making the change to the Limited Company then you could be in the ideal position to take advantage of a much more tax efficient way of handling your earnings.
If you are a freelancer or contractor who earns an average of £50,000 or more, running your own single person limited company then you could be taking advantage of a way of managing your finances in an even more efficient way.
Whether you are an existing Limited Company or need guidance on setting up a new one; limited company accounting services can offer professional direction to best fit your circumstances, help you earn more money and still take advantage of the service you’ve come to expect from a standard contractor accounting service, such as:
- Free incorporations
- VAT returns
- End of year returns
- Tax planninf
- Free IR53 reviews
Take a closer look at this new contractor accounting solution today to find out how you could be taking home more money as a newly established Limited Company.