Setting up a ltd company on the internet

PilotDean

Yes, Chalkie's explanation is how I understand it.

So - "fairly straightforward" says antrobus. Do I need a printed copy of company documents? A bound copy of company documents? I know these seem like trivial questions, and I have a couple of recommendations for good accountants now so hopefully should get some more formal advice soon, but don't want to make expensive mistakes in the meantime!

Dean

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paulwf

I think I paid something like £25 online for a company formation, I paid something like another £10 for print copies but should have just printed off the PDFs supplied and saved my money. It depends what you require - if it is just you then there isn't going to be disputes between directors so you probably don't need a solicitor/accountant to create customised documents as I doubt you'll ever have to look at them again.

A local accountant can be handy to drop stuff off but if you have found a good one further afield I would consider using them.

Even if you don't want to draw the money out straight away it might be useful to start generating a payroll for you as soon as you can so that you are making the most of your tax free allowance and NI contributions...not my field of expertise though, perhaps someone else can advise?

Horace

I know that when I set up my company, I used the formation agents that my accountant recommended and we did it on the internet there and then. As her email address was given the documents were sent to her and she forwarded them to me. It cost me £16.99 or thereabouts.

Premier_2

PilotDean wrote: »

...Last week, I saw several accountants, and all of them looked at my figures and said that a limited company is the way forward. However, for various reasons (trying to rip me off, and failing to get back to me when they said they would) I don't want to continue to use any of the accountants I've spoken to.

I need to set up a company quickly - ...

Then you need to find an accountant you respect even quicker...

It's clear you will need an accountant sooner or later if you pursue this goal. Don't rush into business without one. Find one you do get on with and trust ... and then consider the advice they give.

zenmaster

chalkie99 wrote: »

No, you have misunderstood.

Once the Corporation Tax has been paid by the company the money can be paid as dividends (up to the higher tax bracket) without any further deductions.

Example:

Company profits £30,000

Pays director £30,000 - leaves no profit for company to pay tax on but -

Director gets tax free allowance £7475 and pays tax on balance of £22,525 @ 20% = £4505

He also pays National Insurance at 12% on earnings over £139 per week.

This would give him a NI bill of £2732.64

By paying himself a low wage of say £6000 a year it works out like this:

Company profit £30,000 minus wages paid of £6,000 gives taxable profit of £24,000 @ 20% = £4800.

Director pays no tax or NI on the £6,000 wage as it is under the personal allowance.

He then draws the net profit (£24,000 - £4800) of £19200 as a dividend and pays no extra tax or National Insurance.

He has ended up with wages £6000 + dividend £19200 = £25200


The first way he would have only pocketed £22762.36

You've missed the employers NI on the first example = £3164.06.

Of course only a fool would pay no tax or NI. You might as well install a flashing neon sign over your house saying "please investigate me" .