Setting up a Limited company as single person, help?

nickc25

Looking like I wont be doing this. Ill be around £900 per year worse off so Ill leave it for now and see how it goes. It was worth looking into though. Stupid that you have to pay an accountant to do accounts when I could easily do them myself like I do at the moment, that is the big drawback because £600 a year is a lot to pay for something that would be very simple. I get paid yearly fees for my site and only outgoing is web hosting and advertising costs, so it is very simple to do the accounts.

Ste_C

nickc25 wrote: »

Stupid that you have to pay an accountant to do accounts when I could easily do them myself like I do at the moment, that is the big drawback because £600 a year is a lot to pay for something that would be very simple. I get paid yearly fees for my site and only outgoing is web hosting and advertising costs, so it is very simple to do the accounts.

You don't have to use an accountant. There is nothing stopping you doing them yourself. There is no legal requirement for a Ltd company to use an accountant, you only need to involve somebody else if your turnover is so high that the accounts need to audited - and you'll be miles off that level of turnover.

nickc25

Ste_C wrote: »

You don't have to use an accountant. There is nothing stopping you doing them yourself. There is no legal requirement for a Ltd company to use an accountant, you only need to involve somebody else if your turnover is so high that the accounts need to audited - and you'll be miles off that level of turnover.

Oh right. Someone said I had to legally use an accountant. Getting mixed info lol

Basically all I get is money from payments and I put each one in a speadsheet, each time I have an outgoing I enter that too and the only entries are web hosting, domain names and advertising. I may have other little expenses such as business cards but it is very simple and nothing complex. I said to the accountant I would send them my accounts via a spreadsheet and they still said £450 plus VAT per year which I think is just to use their account program and print them off?! Plus other charges such as wage slips. Maybe I should try and find some company I can call for advice on it all.

orangeslimes

nickc25 wrote: »

Oh right. Someone said I had to legally use an accountant. Getting mixed info lol

Basically all I get is money from payments and I put each one in a speadsheet, each time I have an outgoing I enter that too and the only entries are web hosting, domain names and advertising. I may have other little expenses such as business cards but it is very simple and nothing complex. I said to the accountant I would send them my accounts via a spreadsheet and they still said £450 plus VAT per year which I think is just to use their account program and print them off?! Plus other charges such as wage slips. Maybe I should try and find some company I can call for advice on it all.

For things like assets to your business it is more complicated though (i.e cost of your computer/new equipment)
Also are you claiming for use of home? internet connection? bank charges? if you are not you should...

That fee is about what the firm i work for would charge and the work would involve entering it in the accounts package and checking that it agrees to your bank account/adds up properly, checking that you have not missed anything obviously out that you could claim and asking about it, plus making sure that you comply to regulations. It's not that you HAVE to use an accountant it's just that it may be advisable.

Also rather than have a ltd company if you are worried about being sued - maybe you could investigate paying for insurance against the possibility?

Ste_C

£450 sounds about right to me too.

There'll be a bit more to them just entering your figures into their system and printing things out and I'm sure there'll be some guidance and extra form filling in for you too.

But in any case, accountants are like any other business and are there to make money so they aren't just going to bill you at cost for the time they spend on it. They are charging a premium for a professional service - which you are of course entitled to do yourself.

If you do go down the Ltd company route I would advise you use an accountant in your first year as I can guarantee you'll end up needing help somewhere along the line, and Ltd companies are very different to sole trading and if you're not up to speed with all the regulations and technicalities you can end up owing the tax man a lot more than you should.

nickc25

orangeslimes wrote: »

For things like assets to your business it is more complicated though (i.e cost of your computer/new equipment)
Also are you claiming for use of home? internet connection? bank charges? if you are not you should...

That fee is about what the firm i work for would charge and the work would involve entering it in the accounts package and checking that it agrees to your bank account/adds up properly, checking that you have not missed anything obviously out that you could claim and asking about it, plus making sure that you comply to regulations. It's not that you HAVE to use an accountant it's just that it may be advisable.

Also rather than have a ltd company if you are worried about being sued - maybe you could investigate paying for insurance against the possibility?

Ive looked into it and the only reason someone would sue me is if my website went down. But then that would be the hosting companies error anyway because they guarantee 100% uptime or something like that. So the only reason now is for credability but all the other sites in my field are not a ltd company so I dont think I need to do it really.

At the moment no I am not claiming for home because I didnt think I could because the mortgage / bills etc get paid anyway and I do not have a business telephone line. I suppose I could put my internet connection as an expense along with whenever I buy a new laptop or stationary, but it is not very complex really what I do. I have a website, people pay me to advertise their villa on it, they pay a yearly fee and that is about it really. I am thinking of going into web design which will involve a little more complex in terms of income because each site will be a different fee to charge and I will include SEO in the price of things so it is just a case of making sure I document everything. The only other income I will get is from google adsense and affiliate networks but at the moment I am not getting much from those because the sites are still new.

I suppose I need to look what I can claim for expenses but it is not as if I will be getting 30k a year for a few years and will never be employing anyone either so I will probably just stick to being self employed because originall I was told by the company setting up firm that setting up a ltd company was really easy and would not overcompliate things, but I think they just wanted a sale even though it was only £37 but ive researched a lot and found that it is a lot more complex than they originally told me.

Ste_C

nickc25 wrote: »

At the moment no I am not claiming for home because I didnt think I could because the mortgage / bills etc get paid anyway and I do not have a business telephone line.

...

...I was told by the company setting up firm that setting up a ltd company was really easy and would not overcompliate things, but I think they just wanted a sale even though it was only £37 but ive researched a lot and found that it is a lot more complex than they originally told me.

You can still claim something - even if just a couple of pounds a week. You would still pay those bills anyway, but that doesn't matter as you're operating a business from home and as such a part of your costs can be attributed to the business.

Re the second point, this concerns me, as it seems very common. I've seen plenty of clients set up their own companies using these firms and then not know how to run a limited company. The people setting up the firms don't seem to tell new directors about their new responsibilities and they get a shock when they find out they can't just take money out of the company willy nilly, or when a notice to file an annual return drops through the door etc.

chickmug

Soubrette wrote: »

Don't forget the other advantage of having a limited company is that you are not personally liable for any debts or action taken against the company.

Is this really true because you will not get credit through a Ltd company as suppliers are not that silly. Where a Ltd company it is normal to have to give a personal guarantee. Thisis what my professionals have always told me when exploring my options.

Soubrette

chickmug wrote: »

Is this really true because you will not get credit through a Ltd company as suppliers are not that silly. Where a Ltd company it is normal to have to give a personal guarantee. Thisis what my professionals have always told me when exploring my options.

I don't know about buying and selling products through a company - my ex used to be a computer contractor and obviously was concerned he might be liable for huge costs if he !!!!!!ed up someone's computer system. He never had any problems buying his own hardware/software on a company account though always through the company and with no personal guarantees but that was not tens of thousands of pounds worth though.

He mainly did it for the tax breaks though

Sou

chickmug

Soubrette wrote: »

I don't know about buying and selling products through a company - my ex used to be a computer contractor and obviously was concerned he might be liable for huge costs if he !!!!!!ed up someone's computer system. He never had any problems buying his own hardware/software on a company account though always through the company and with no personal guarantees but that was not tens of thousands of pounds worth though.

He mainly did it for the tax breaks though

Sou

My comments are based on my having been an estate agent and in latter years with significant time spent handling small business sales. Many buying small businesses were told by their brother/neighbour/pal at work/etc go Ltd it will save a lot in tax and you are shielded from problems and debts.

The tax saving may of been the case some years ago but not so in more recent years. I told people to talk to an accountant and after which nearly all dropped the idea of Ltd Co.

The position may be different one year on but as far as I am aware it is still as it was when I last traded. Ltd does involve more paperwork for the owner of the company and does incur a higher accountants bill.