Please can provide advice on my business?

Mannyy36

Hello,

Right, ok.

I am planning to start contracting working very soon and wanted to get my accounts in order.

I have been told, most contractors set up a limited company, is this true? It will be technically self-employed, offering my services to a company.

The company I will be contracting for is registered as an LLC (limited liability company) in the US. I will be working remotely from the UK and will be based in the UK. From the online research I have conducted, I have found out that if I set up a limited company, it will be easier to get paid from the US company. All I would have to do is invoice them for my work, monthly? Also, that I wouldn't have to pay US tax as I am from the UK but will have to declare this to the UK in order to pay the correct UK tax.

Is this information correct and can someone please offer their thoughts/advice. I have called companies house and HMRC, who can't even give me an exact answer.

To sum up,
- I want to start my own company where I will be contracting my services to other companies, in the US and UK. This will be a part time job as I work full time elsewhere.
- I will be working and based from the UK.
- Do I set up a limited company? or do I set up something else?
- Do I have to pay US & UK tax? or just UK tax?


I know this is a confusing subject, but any help would be much appreciated.

Mannyy36

I forgot to mention, I will be the only person in this contracting company.

Mistral001

Unless the US company you are working for insists on you forming a ltd company, there is no requirement to set up one.

You will have to pay income tax in the UK if you reside in the UK.

Mannyy36

Hello and thank you for the reply.

You mentioned I wouldn't have to set up an LTD if it was requested. How would I ask them for money? Would it just be a simple bank transfer?

I am trying to set up a contract company, where I can hopefully get more customers than just the US company at the moment.

Mistral001

Mannyy36 wrote: »

Hello and thank you for the reply.

You mentioned I wouldn't have to set up an LTD if it was requested. How would I ask them for money? Would it just be a simple bank transfer?

I am trying to set up a contract company, where I can hopefully get more customers than just the US company at the moment.

You send them an invoice.

An invoice is a very important document and must contain certain information and must be accurate. It is a demand for payment for goods or services rendered.

The information that you must put on it varies depending on the type of business set-up. For example, if you are a sole trader it must contain your own name as well as any trading name you are using, while if you have a Ltd company, you do not have to put your own name on the invoice, only the Ltd company name (as well as any trading name the company trades under).

A full list of information required on an invoice can be found here:

https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include

Elise1912

I would set up a limited company where you would be director but also employee. I worked as a consultant for years and this is how I did it. No holiday or sick pay. But more tax efficient.