Electronics engineer contractor needs an accountant?

faringdon

I wish to set up a Limited Company so i can be employed through it as an electronics engineer.

I dont yet have a work contract but i want the limited company ready for when a contract may come along.

Searching the web says i need to employ an accountant for this. But why?....if it was an actual business than i could understand...but its
just me, a guy, working...so surely there's no nothing complicated that needs me to employ an accountant?
Surely all i need to do is set up a business bank account for some £50/year, then register the business, then thats pretty well it?
If i dont get any contracts that Tax year then i just tell HMRC and thats it job done?...no accountant needed?

The mains reason for needing a limited company is so i dont get taxed on the money i spend on Travelodge or B&B's. Or maybe i could claim this money back altogether?

Grumpy_chap


faringdon 

Today at 6:44AM edited Today at 6:51AM

I wish to set up a Limited Company so i can be employed through it as an electronics engineer.

I dont yet have a work contract but i want the limited company ready for when a contract may come along.


Searching the web says i need to employ an accountant for this. But why?....if it was an actual business than i could understand...but its
just me, a guy, working...so surely there's no nothing complicated that needs me to employ an accountant?
Surely all i need to do is set up a business bank account for some £50/year, then register the business, then thats pretty well it?
If i dont get any contracts that Tax year then i just tell HMRC and thats it job done?...no accountant needed?

The mains reason for needing a limited company is so i dont get taxed on the money i spend on Travelodge or B&B's. Or maybe i could claim this money back altogether?

You certainly can set up the company and do the accounts yourself. There is no law prohibiting that. However, you will need to ensure that you are aware of and apply all the necessary record keeping and reporting to ensure the company is operated in a fully compliant manner. Some of the reporting will have a cost, for example MTD (Making Tax Digital).

If you choose to engage the professional services of an Accountant, they will charge a professional fee but give you guidance on the simplest way for you to keep records which you pass to them for formal submission to HMRC & Companies House. The Accountant will also advise on details, such as when an overnight cost is an allowable business expense and when it is not.

Don't see the cost for the Accountant as a cost but as an important part of running the business. There is a cost (in lost income) if you spend your time doing accounts rather than fee earning Electronic Engineering. If you spend a day working on accounts or spend a day doing what you do best and then paying an Accountant to do the accounts, the net outcome.

Jemma01

even if the company doesn't trade. You'll still need to file annual accounts with Companies House and a confirmation statement annually. Not difficult, but someone needs to do it. If you need to travel far away for work and stay over, you can get VAT back if the company is vat registered . HMRC is not easy on expenses, you can be subject to an audit where they check if the travel is legitimately work related and linked to some invoice.

I have an accountanting company doing my paperwork and I wouldn't operate without them

sheenas

If they company has not traded you can file what is called dormant accounts. For that you don't need an accountant. Simple free 1 form process.

Don't register for VAT unit necessary. You can back date registration if necessary.

As other have said once trading you will need an accountant and it's best to line one up for day 1.

ritz55

I've been in a similar situation as yourself, TBH I would wait to open the limited company until you have a company. When you are being awarded the contract, the company setup is super quick and for the bank account I used Monzo who had the account up and running in a matter of hours. I think I managed to get it all setup within a day and ready to start trading.

uknick

From your comment;

"The mains reason for needing a limited company is so i dont get taxed on the money i spend on Travelodge or B&B's. Or maybe i could claim this money back altogether?

it does suggest you need to speak to an accountant for advice on what is the best trading model for you as the advantages of Ltd over sole trader has narrowed immensely over the last few years.

Unless you really need to hide behind the veil of incorporation, I'd suggest you consider setting up as a sole trader first and then migrate to a Ltd if the need arises. It is easier, and probably cheaper, to manage the administration and you don't have to make public your accounts.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6676237/electronics-engineer-contractor-needs-an-accountant

You dont need a Ltd for claiming expenses, both sole traders and companies can claim expenses for legitimate and wholly business purposes. There are some differences but mainly if you are getting into buying a vehicle for the business etc not subsistence etc.

As a sole trader you will do a Self Assessment, this is designed for a non-finance person to do and for most its fairly straight forward. As a company/director you will have to do both a company tax return and a self assessment plus returns for Companies House. These arent the most complicated forms in the world but they are less user friendly compares to SA as they are designed for professionals to complete. You can learn but some will find their time better spent generating revenue than learning to do tax returns.

Personally, I use an accountant but then my business is my main income. For me they have certainly saved me more in tax than their fees but then my revenues are likely higher than what you are aiming for

MeteredOut

https://forums.moneysavingexpert.com/discussion/comment/82069973#Comment_82069973

I suspect many clients will expect (or actually require) their contractors to have a Ltd company, and not be self employed. And, it also protects the OP.

But I agree, it sounds like the OP doesn't understand the benefits of having a Ltd company, so should pay for professional services.