Becoming self employed

mbtsea

Hello,

I am considering at the moment taking a career change and becoming a contract web developer and by virtue of that becoming self employed, I have a few questions about this if some one be so kind to answer.

1. I'll be earning approx 60-70k a year it has been suggested that I should register a ltd company. How long does it normally take from start to finish?

2. I'll need a business bank account I think, personally I have credit card with a balance on it and a recent late payment, and also a loan, how will this effect my business account?

3. Paying myself, how do I go about doing this? Do I just decide a figure and transfer that to my personal account each month? Do I pay tax on this and my ltd companies profits? Or do I just pay tax on my profits?

Any help and advice would be great!

Thanks,

Mbtsea

phill99

Truthfully, if you are struggling with these very basic questions, you would be well advised to seek advice from an accountant. And Please don't say 'I don't need an accountant/can't afford one'.

motorguy

mbtsea wrote: »

Hello,

I am considering at the moment taking a career change and becoming a contract web developer and by virtue of that becoming self employed, I have a few questions about this if some one be so kind to answer.

1. I'll be earning approx 60-70k a year it has been suggested that I should register a ltd company. How long does it normally take from start to finish?

2. I'll need a business bank account I think, personally I have credit card with a balance on it and a recent late payment, and also a loan, how will this effect my business account?

3. Paying myself, how do I go about doing this? Do I just decide a figure and transfer that to my personal account each month? Do I pay tax on this and my ltd companies profits? Or do I just pay tax on my profits?

Any help and advice would be great!

Thanks,

Mbtsea

I take it by contract web developer you mean going in to an organisation for a fixed term, with possible extensions to cover a particular project / mat leave / sudden expansion, etc, as opposed to developing websites for people?

If YES then

1. You will need a LTD company as companies will want to engage with your company, rather than put you on their books as a temp employee. Its easy to do. Plenty of sites or an accountant will do it for you.

2. It will be a limited company bank account. If you arent asking for an overdraft, or bank card / credit card, they wont do credit checks anyway.

3. You will need to talk to your accountant about this, though basically you just move the money or pay yourself by cheque. Allow a percentage for times out of work and a percentage for tax and for paying your accountant.

Are you flexible with travel? I've never really had any shortage of work (current contract likely to run to next summer) but I'm happy to go wherever the work is.

mbtsea

Thanks for the reply motorguy. I'm just trying to get a basic understanding before my accountant friend confuses me.

That's exactly what I'll be doing going into companies for a fixed term, initially very happy to travel to get my new venture moving in the right direction.

motorguy

mbtsea wrote: »

Thanks for the reply motorguy. I'm just trying to get a basic understanding before my accountant friend confuses me.

That's exactly what I'll be doing going into companies for a fixed term, initially very happy to travel to get my new venture moving in the right direction.

I've been at it almost two years. Was v daunting but has been going great.

sooty&sweep

Hi
Contact your Local Authority and ask if there is any free business start up advice in your area.

Jen

motorguy

Oh, meant to say - i found this forum VERY useful when i was setting up

http://forums.contractoruk.com/

paddyrg

1) an hour or so, and £20-something HOWEVER be aware that you are committing to some hefty accounting costs at year end, so will need an accountant anyway.
2) totally separate, but don't expect any lines of business credit and expect to pay a fiver a month or so fire your account.
3) it's complicated, as you'll take some minimum wage, some dividends, but pay corporation tax before the dividends and personal tax on them etc. It's absolutely sensible to get the accountant to at least get you rolling.

Something you don't mention and should ask the accountant about - VAT registration. It almost certainly won't be a problem for most clients, and can save you money.