company formation question

julliff

Hello

I am being made resundant from my job this week, and so I have decided to enter the world of contracting (I am am IT professional).

I was very lucky to land my forst contract starting next Monday, as well as the offer of some consultancy work wih another company when I am available.

However, now I am in a panic, as I need to register as a Ltd company right away, as well as set up a Business Bamk Account.

I have lined up an Accountancy firm, but they charge quite a lot to set up Ltd Company for you.

Do you think it would be OK to use an online formation company? I have been looking at https://www.companiesmadesimple.com, which see,s really straight forward, and very reasonable. They also have a fast track Business Bank Account application (I was thinking of Abbey anyway).

Any advice would be gratefully received.

Thanks

mrcrazy04

I used Companies Made Simple to register my company last year, with the £35 option. I think I ended up filling in the form at something stupid like 2am, and the company was registered by 12pm.
I've had the company for a year and still haven't got round to filling in the paperwork for Bank of Scotland, so that might have been a worthwhile option for me, but being a student I like to do things as cheaply as possible!
Also, by registering as a company HMRC should get in contact with you in a month or so with a form to fill in to register for corporation tax.

johnllew

I used Companies Made Simple as well, their cheapest option @ £25 with no problems and can recommend them. Abbey is good for free business banking.

Pennywise

You're using the wrong accountancy firm! Many will set it up free of charge if you use a "monthly" package, and even those that do charge are often charging most for their time in providing advice etc rather than the actual cheap formation fee itself. Are you absolutely certain what their fee quote includes and what you will have to do separately yourself or pay them to do anyway?

Remember that the formation itself is the easy (and cheap) bit, you also have to do all the registrations, i.e. separate registrations for VAT, Payroll and Corporation tax, making sure you get the appointments of officials right, shareholding proportions, etc.

To be honest, I hate taking on a new client where they have tried to set it up themselves because it takes just as long to work out what they have & havn't done, make corrections and fill in the gaps. It is quicker and easier for me to do it myself as a freebie - after all the only "cost" to me is about £25 - the rest is my time. The OP should remember that his accountant may well still charge some (or most) of their fee for sorting out everything else.

julliff

Hello,

Yes, I am sure of the costs, I have been given a sheet of "extras" and company formation works out at 75.00.


thanks for all your advice, I have now registered using companies mad simple.

spilly1

Don't forget to phone thr Inland Revenue to tell them about the company though, otherwise your accountants will charge you. The HMRC website is really useful and has loads of forms you can download too - if your accountants do it, they often charge £10 or so for this.

tiddly_widdly

Why do you need to be LTD? Its not essential for most small businesses especially sole traders.

julliff

Hello

IT contractors are not allowed to operate as Sole Traders, they have to be LTD Co, or use an umbrella company. It's all to do with IR35, I believe

ukbill69

Be careful of IR35!

oscruft

I started contracting several years ago and went umbrella to start with. I think its the best option for new contractors as all you do is send your umbrella your timesheet and they then invoice your client and a week later (or whatever your client's payment terms are) your umbrella pays the money straight into your account.

You can claim your travel expenses which is a major bonus, and any other expenses that you incur while working.

I stuck with an umbrella for three years before starting a ltd company, and now i'm back with an umbrella due to the ease of it. Its a lot less hassle! I can strongly recommend the one I am with now (but wont give them blatant advertising!) PM me if you want their name. I get four weeks free for recommending someone!

Oscruft

averageguy11

Oscruft..mind me asking how you dealt with going back to 'sole trader' and how you wound down your ltd cpy...i'm contemplating doing the same..tax advantages have been eroded and thers extra paperwork to contend with.

TIA