setting up a limited company

Hi,

I am looking to find specific guidance on setting up a limited company in th uk to start the contracting work.

Please can you provide me with specific advise and any useful website to go to?!

Thanks.

Many thanks.

I am looking for step by step procedure guide for it.

I have never done this so need advise on which form to fill out what are the best options that will enable me to save money on taxes and NI etc.

Thanks.

Talk to an accountant. Put it down to the cost of doing business!

I have just spoken to an accountant and according to him oveall cost of setting up a limited company will be £500+ VAT and annual admin cost will be £3500+VAT.

He really confused me about as to how salary can be claimed i.e. salary or dividend!

I have been told that my take away salary should be in ball park of 80% of original amount but he was questioning it!!!

I also need to see whether I will stuggle or not in terms of salary evidence for my ILR next year witht these contracting roles.

Please advise as offer is good and do not want to lose it due to this simple procedues -so to speak!!

Thanks.

P.S. is there a step by step procedure setting up a company?

abc111 wrote:I have just spoken to an accountant and according to him oveall cost of setting up a limited company will be £500+ VAT and annual admin cost will be £3500+VAT.

He really confused me about as to how salary can be claimed i.e. salary or dividend!

I have been told that my take away salary should be in ball park of 80% of original amount but he was questioning it!!!

I also need to see whether I will stuggle or not in terms of salary evidence for my ILR next year witht these contracting roles.

Please advise as offer is good and do not want to lose it due to this simple procedues -so to speak!!

Thanks.

P.S. is there a step by step procedure setting up a company?

someone already gave you a link to inform yourself
I sent you a private message to explain it all
If you can't figure out after this info, then you should not open a limited company by yourself.

I have a related question... I will soon be setting up my limited company to work as a contractor (as director or employee). My questions are:

1. I may have an income shortfall during the visa extension next year. Is it OK for me to work with more than one client if I am the director/employee of this company?
I will be working as contractor for one company (source 1 of income) and as private consultant for any other prospective company/client (source 2)

2. Can my limited company venture into more than one line of business (area of expertise) as a consultancy?
If yes, then my husband (who is a permanent employee of a corporate), could work as part time employee of my company and provide consultancy in his field. I could pay him salary but the income generated would be an earning for the limited company. I as director may hence opt for dividend and make up for the shortfall.

I would speak to an accountant, however any additional information from this group will be helpful based on your experience.

Regards,
Angie

(Thanks for banning the guy above, recommend banning the phony passport adverts as well. It's a shame)

abc111 wrote:Hi,

I am looking to find specific guidance on setting up a limited company in th uk to start the contracting work.

Please can you provide me with specific advise and any useful website to go to?!

Thanks.

an_gie wrote:
I have a related question... I will soon be setting up my limited company to work as a contractor (as director or employee). My questions are:

1. I may have an income shortfall during the visa extension next year. Is it OK for me to work with more than one client if I am the director/employee of this company?
I will be working as contractor for one company (source 1 of income) and as private consultant for any other prospective company/client (source 2)

2. Can my limited company venture into more than one line of business (area of expertise) as a consultancy?
If yes, then my husband (who is a permanent employee of a corporate), could work as part time employee of my company and provide consultancy in his field. I could pay him salary but the income generated would be an earning for the limited company. I as director may hence opt for dividend and make up for the shortfall.

I would speak to an accountant, however any additional information from this group will be helpful based on your experience.

Regards,
Angie

(Thanks for banning the guy above, recommend banning the phony passport adverts as well. It's a shame)

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Hi!

Have you given a thought of using an umbrella company ? I was under HMSP (JR) and since the last 1 1/2 years used an umbrella company for contract work instead of starting a ltd company. I am now awaiting my ILR.

You will pay to the Umbrella Company - NI, Taxes, Employers Insurance and monthly charge (around £50) and what you get is a PAYE pay slip with the full break down.

I used to get around 70% of my salary every month after all the deductions. My yearly income was more that 50K. I am not sure if you claim much expenditure if you are contracting as you do not own an office, equipment etc. You are most likely to work in the client's place or remotely. I used to work at the client's place 5 days a week and I could only claim Travel and Subsistence.

I know money through a LTD company will be higher but providing paper work (wage slips, P60, P45 etc) through the umbrella company to the UKBA is much easier than keeping track of the paperwork of the LTD company, I reckon. Then again if you have a good accountant then starting a LTD company is easy. One can set it up online starting from £14.99. My friend just recently set one up and I also plan to do so after I get my ILR (fingers crossed).

Angie, depending on your visa, point 1 is possible, I reckon. Whilst working as contractor for COMPANY 1 (using an umbrella company for my taxes ), I also work for COMPANY 2 as and when needed and they (Company 2) took off the taxes at the source ie, pay me minus NI and Taxes. I did tick "This is my second job" while filling up the tax form with company 2.

I think point 2 is also possible but you need to talk to an accountant.

Hope I could be of help to you both.

Thank you for your response.

I am on Tier 1 General and intend to use the services of an accountant to manage the contract work. I think that will be as good as an umbrella company when it comes to managing paper work.

Do you work for Company 2 as self employed or under the same umbrella as Company 1? If self employed, then will it be too hard to prove the income to Home Office during extension?

Good luck with your ILR.

Kind regards,
Angie

an_gie wrote:Thank you for your response.

I am on Tier 1 General and intend to use the services of an accountant to manage the contract work. I think that will be as good as an umbrella company when it comes to managing paper work.

Do you work for Company 2 as self employed or under the same umbrella as Company 1? If self employed, then will it be too hard to prove the income to Home Office during extension?

Good luck with your ILR.

Kind regards,
Angie

Hi! Angie,

Thank you for the wishes.

I work for Company 2 as an employee, hence they deduct the tax and NI from the source and pay me the net salary. eg. £1000 - £250 (NI + Tax) = £750. If I had involved the umbrella company for Company 2, then VAT would be involved..;o(( and as they don't pay me the full amount so I am not registered as a Self Employed / Sole Trader. I get a payment slip from them.

So I am employed by the Umbrella Company and Company 2(atleast that is my thinking) and pay my Taxes separately to the HMRC.

I am afraid, I can't tell you much about your UKBA extension as a self employed. If the documents are proper, you have filled the Self Assessement(SA) form at the end of each tax year and you have paid taxes and NI properly, you should not have any problem. I don't know when you need to apply for your extension but remember, you need to take into consideration about the time after you send in the SA to the HMRC. They might ask you to resubmit SA if you made a mistake, ask to fill other documents.

Also not sure if this will help you, previously, even though I was employed as a PAYE with some other company, I had forgotten I had registered myself as a Self Employed (SE), so I had to call up HMRC, inform them about I no longer working as a SE, yet had to pay NI till the time I was registered as a SE (about 3 years of NI as I had moved house and they had sent Self Assessment forms to my previous address)and then fill 3 years of SA. I had to pay no taxes as SE as I had not made any income, just the NI. Intially, the forms were bit daunting and I made some mistakes, but it was pretty straight forward then after.

Remember to keep invoices/expenses of everything. You will need to put it in the Self Assessment form. Again, register yourself for UTR Number with the HMRC. You can do many things online.

Hope all goes well with you too.

Thank you very much, it was very informative.

Regards.

Check out http://www.sjdaccountancy.com/ and speak with them. Lot of limited company contractors use it and have got there visa extended through limited company. It should not cost you 3500 admin fees to set up a limited company. All should be done in less then 300 pounds.

Hope it helps...

Thanks Vivek for the details. I will have a look at the web site.

Does anyone know if we can show 100% of the Limited Company's earning for Visa Extension or is it just 80% (i.e. minus tax deduction) please? This would mean can we withdraw 100% of dividends or not?

- Angie

an_gie wrote:Thanks Vivek for the details. I will have a look at the web site.

Does anyone know if we can show 100% of the Limited Company's earning for Visa Extension or is it just 80% (i.e. minus tax deduction) please? This would mean can we withdraw 100% of dividends or not?

- Angie

You have to exclude tax (VAT, Corp, Paye) as that is your obligation.