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  • FIRST POST
    • slightlywary
    • By slightlywary 2nd Dec 17, 4:57 PM
    • 14Posts
    • 1Thanks
    slightlywary
    Should I be setting up a company
    • #1
    • 2nd Dec 17, 4:57 PM
    Should I be setting up a company 2nd Dec 17 at 4:57 PM
    Would be very grateful for some direction before I talk to an accountant. This tax year I have been a higher rate tax payer, but I'm not currently employed. I have picked up a couple of consultancy projects and some long-term self employed friends are advising me to set up a company. I'm hoping to be back in a permanent role (PAYE) in time for the next tax year, so the consulting projects are not a long term play. I'd imagine the income from them combined will be sub £20k this tax year.
    Friends were talking dividend payments, offsetting costs and all sorts, and I'm sure if I put a lot of effort in, I could make it so I felt like I was winning, but my gut feel is that setting up a company involves cost and effort and advice for likely marginal gains. Am I right, or should I be getting onto an accountant before I get my first invoice out? All help gratefully received!
Page 1
    • Pennywise
    • By Pennywise 2nd Dec 17, 5:30 PM
    • 9,428 Posts
    • 17,151 Thanks
    Pennywise
    • #2
    • 2nd Dec 17, 5:30 PM
    • #2
    • 2nd Dec 17, 5:30 PM
    I'd go an speak to an accountant asap - many will do a free initial consultation. If you go down the ltd route, you want it set up quickly - it can't be backdated, so if you've already signed a contract or started work, you're pretty much too late.

    Whether a ltd is right for you depends on so many factors, it's impossible to generalise, such as whether you actually "need" the £20k you're going to make (i.e. for day to day costs) or whether you could do something else with it, such as invest in pension, drip-feed as dividends over a few years. If you're just wanting to draw it all for personal needs as soon as the customer pays, then I'd say it's not worth the costs/hassle as you get the real benefits these days by planning the timing of withdrawals etc.
    • Mistral001
    • By Mistral001 7th Dec 17, 2:53 PM
    • 3,261 Posts
    • 2,499 Thanks
    Mistral001
    • #3
    • 7th Dec 17, 2:53 PM
    • #3
    • 7th Dec 17, 2:53 PM
    There a few downsides to forming a Ltd Co. You will have to submit certain details such name and address of directors and the financial health of the company to Companies House on an annual basis. These details will be in the public domain and can be accessed by anyone. There is also the hassle of another layer of accounting as has been mentioned.
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