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  • FIRST POST
    • janesmith
    • By janesmith 15th Mar 18, 5:20 PM
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    janesmith
    How much admin. involved in running a Ltd Company?
    • #1
    • 15th Mar 18, 5:20 PM
    How much admin. involved in running a Ltd Company? 15th Mar 18 at 5:20 PM
    I am thinking of setting up a new (small) company and was curious to ask how much paperwork and administration was involved every year in running a limited company i.e. registered with Companies House?

    The business won't be very big. It will provide consultancy services to other businesses and should "only" involve about twenty payments going into and another fifteen going out of the business bank account every month.

    I am already fed-up with adminstration in other parts of my life and so am concerned that the amount of red tape will keep me tied to my computer on Sunday evenings forevermore doing this and that!

    HMRC will soon require quarterly filings, as well as the annual paperwork for them, and then there's calculating the income, every single expenditure, all the VAT etc.

    I think for such a small company it'll be more efficient and quicker doing it myself than dealing with an external party - an accountant - all the time.

    Very approximately, how many hours every month or year does all the admin with Companies House, HMRC etc. take? I appreciate it varies from business to business.

    Your advice would be most welcome! Thank you.
Page 1
    • Savvy_Sue
    • By Savvy_Sue 16th Mar 18, 1:02 AM
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    Savvy_Sue
    • #2
    • 16th Mar 18, 1:02 AM
    • #2
    • 16th Mar 18, 1:02 AM
    Those who set up limited companies are usually recommended to use an accountant, simply because without a reasonable understanding of what needs to be in company accounts and how to file them it's easy to mess up and face automatic fines.

    It can also become complicated when you want to either pay yourself regularly from the company or withdraw money from the company, and an accountant can certainly point you to the most tax efficient ways of doing this, plus they can tell you how NOT to do it!

    As in all areas of life, the key to minimising the admin is to keep on top of it. So getting your records up to date on a weekly basis might be needed, or monthly might be enough. But using an accountant ought not to make it more time consuming, IMO.
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    • Pennywise
    • By Pennywise 16th Mar 18, 6:19 AM
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    Pennywise
    • #3
    • 16th Mar 18, 6:19 AM
    • #3
    • 16th Mar 18, 6:19 AM
    Most limited company owners use an accountant to reduce the time/stress of trying to work out what needs doing and when. If you don't like admin, how do you feel about having to spend a lot of time researching how to work out corporation tax, learning how to prepare company accounts, learning how to run your own payroll? Most people decide that it's better to have an accountant to look after that. Just doing your own basic book-keeping is enough for most people. I'd suggest you talk to a few accountants (most offer free first consultation or will be happy to talk on the phone) to discuss options etc. It's far better to have an accountant on board from day one so you do things right, rather than get one a year later only to find you've been doing things wrong which may mean you pay more tax, penalties etc than you needed to. Being a simple sole trader is a lot easier and most smaller simple sole traders can do their own accounts/tax returns without too much stress. Limited companies are very different and not for the amateur.
    • fishybusiness
    • By fishybusiness 16th Mar 18, 5:52 PM
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    fishybusiness
    • #4
    • 16th Mar 18, 5:52 PM
    • #4
    • 16th Mar 18, 5:52 PM
    Get an accountant!!

    I tried it without for 2 years, not a big business, but a busy one.

    Payroll is dead easy, plenty of online portals for that, CH yearly statement is easy, but then there are the books, the dreaded book keeping and HMRC returns.

    You'll find yourself spending your time trying to understand 'proper' accounting, maybe getting it wrong, maybe not, it becomes a job in itself.

    My partner is a book keeper, so she knows more than me, and between us we realised it just isn't within our remit to do it properly - employ a pro and focus on your core business skills.
    • ThemeOne
    • By ThemeOne 16th Mar 18, 6:02 PM
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    ThemeOne
    • #5
    • 16th Mar 18, 6:02 PM
    • #5
    • 16th Mar 18, 6:02 PM
    The problem with employing a "pro" is some of them aren't very good and make lots of mistakes themselves. I have personal experience! So I would only go with a recommendation from someone who also runs a company.

    It is actually *not* particularly complicated to do it all yourself, though you will find plenty who claim it is, as on this thread. I think nearer the truth is that it's not the kind of work everyone feels comfortable with, particularly if you've never had much contact with accountancy.
    • fishybusiness
    • By fishybusiness 16th Mar 18, 6:12 PM
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    fishybusiness
    • #6
    • 16th Mar 18, 6:12 PM
    • #6
    • 16th Mar 18, 6:12 PM
    The problem with employing a "pro" is some of them aren't very good
    So find a good one, there are plenty out there - we tried two others before settling on a really great accountant. Find a solution rather than make a problem.

    Simple book keeping is not complicated, nor is most of the admin, as I said, it is fairly easy. It gets more in depth with putting expenses in the correct journal, with adding allowances, and ensuring they are updated each year, plus keeping on top of other changes for example the changes in dividends.

    Any business that is busy making its money is much better off sticking to core skills and paying an accountant to do it right.
    • Pennywise
    • By Pennywise 16th Mar 18, 6:35 PM
    • 10,497 Posts
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    Pennywise
    • #7
    • 16th Mar 18, 6:35 PM
    • #7
    • 16th Mar 18, 6:35 PM
    The problem with employing a "pro" is some of them aren't very good and make lots of mistakes themselves.
    Originally posted by ThemeOne
    Mostly because people chose the cheapest or the unqualified ones. I've seen some pretty horrific cases, and have one on my desk this week where using an unqualified accountant has cost him 50k for failing to give even the simplest of advice that anyone calling themselves an accountant should know.
    • Savvy_Sue
    • By Savvy_Sue 17th Mar 18, 1:13 AM
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    Savvy_Sue
    • #8
    • 17th Mar 18, 1:13 AM
    • #8
    • 17th Mar 18, 1:13 AM
    Payroll is dead easy, plenty of online portals for that,
    Originally posted by fishybusiness
    I would give a slight caveat with that: BITS of payroll are dead easy, but if you are employing anyone what's not necessarily quite so easy is knowing everything that goes WITH payroll, eg what to do when someone is sick / goes on maternity leave / requests parental leave etc etc etc. And it can take quite a while to get your head round it all.

    So if you have employees, then the first thing you need is legal advice about their terms and conditions (and you need to communicate these to your employees), and having a competent person running payroll will save a good deal of time whenever there is anything the least bit out of the ordinary.

    And payroll for the directors of a limited company is definitely something to take advice on before you get started!

    Having said all that, knowing how PAYE works has been extremely useful, even when I've not been running it. I've run two small payrolls in the past, the first time entirely paperbased before there were any online tools, and the second time when you could calculate what to pay via the HMRC site but you then had to record the results manually. It was always a 'wet towel round the head and a strong black coffee to hand' time, but understanding the principles is invaluable.
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    • ThemeOne
    • By ThemeOne 17th Mar 18, 1:40 PM
    • 1,223 Posts
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    ThemeOne
    • #9
    • 17th Mar 18, 1:40 PM
    • #9
    • 17th Mar 18, 1:40 PM
    Mostly because people chose the cheapest or the unqualified ones. I've seen some pretty horrific cases, and have one on my desk this week where using an unqualified accountant has cost him 50k for failing to give even the simplest of advice that anyone calling themselves an accountant should know.
    Originally posted by Pennywise
    But in my experience even paying more doesn't guarantee you get someone who knows what they're doing and does a conscientious job.
    • ThemeOne
    • By ThemeOne 17th Mar 18, 1:43 PM
    • 1,223 Posts
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    ThemeOne
    Find a solution rather than make a problem.
    Originally posted by fishybusiness
    I'm not really sure why stating the fact that some accountants aren't very good is "making a problem" - the problem is already there!
    • Pennywise
    • By Pennywise 17th Mar 18, 6:55 PM
    • 10,497 Posts
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    Pennywise
    There are good and bad in absolutely every trade or profession. As the buyer, you have to research and make your own choices. Luckily, there are thousands of general accountants out there, so plenty of choice to find one that suits you.
    • 00ec25
    • By 00ec25 17th Mar 18, 6:57 PM
    • 6,969 Posts
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    00ec25
    It is actually *not* particularly complicated to do it all yourself, though you will find plenty who claim it is, as on this thread. I think nearer the truth is that it's not the kind of work everyone feels comfortable with, particularly if you've never had much contact with accountancy.
    Originally posted by ThemeOne
    as with anything in life, if you are prepared to put the time and effort into learning the rules then you are correct, "anyone" can manage the record keeping for a (small) Ltd Co.

    The question is why would you? The purpose of being in business is to make money, not avoid expenses by trying to DIY something that stops you making money when you can easily employ someone else to do the admin for you. I agree with your sentiment that such someone can be of variable quality, so go on a recommendation... but do find out what the referral fee is underpinning that "recommendation".
    • Pennywise
    • By Pennywise 17th Mar 18, 7:00 PM
    • 10,497 Posts
    • 19,602 Thanks
    Pennywise
    But in my experience even paying more doesn't guarantee you get someone who knows what they're doing and does a conscientious job.
    Originally posted by ThemeOne
    I've had bad experiences with garages - does that mean I should service my own car?

    I've had a bad plumber - should I change my own boiler next time?
    • janesmith
    • By janesmith 18th Mar 18, 7:44 PM
    • 24 Posts
    • 6 Thanks
    janesmith
    Thanks very much everybody for sharing your thoughts.

    Does anybody have anything tangible in terms of how much time all the HMRC and Companies House admin. takes please? Does it take 10 hours a month, 20 hours a month etc.?

    People often advertise things to be easy and quick, until it is actually done. For instance, in my repeated experience HMRC don't even pick up the phone unless you wait at least 30 minutes.

    HMRC's new-fangled idea to force businesses into quarterly filings, on top of the annual work, will only add to how much time is consumed.
    • jungle jane
    • By jungle jane 18th Mar 18, 10:10 PM
    • 609 Posts
    • 1,773 Thanks
    jungle jane
    It totally depends - how long is a piece of string.

    Do you have tons of expenses? Are you flat rate VAT registered? do run payroll? Will you use accounting software or will you use a spreadsheet? Do you send invoices or are you a contractor on self billing?

    I have a limited company and hate the admin component. Realistically it only takes me 1 days every quarter but i dread it. I have flat rate VAT so that is less admin than claiming - however some people get their accountant to do their VAT too. I don't scan receipts but others do. I don't even invoice - my company self bills...yet i long for a day when i don't have to worry about "doing my books". worst time is end of March as its year end...which means printing out phone bills, utility bills etc. Ughh.
    • fishybusiness
    • By fishybusiness 19th Mar 18, 4:42 PM
    • 1,228 Posts
    • 768 Thanks
    fishybusiness
    Does anybody have anything tangible in terms of how much time all the HMRC and Companies House admin. takes please? Does it take 10 hours a month, 20 hours a month etc.?
    Generally I used to leave everything above as it didn't demand of me. So maybe 15 minutes a month to do wages for two of us.

    CH yearly statment, maybe an hour, time spent finding paperwork and logins, then actually doing it, paying and printing a receipt.

    I found it was the book keeping and end of tax year work that really sent us off the deep end. Say you are busy, so 4 or 5 days a week, working, there is still paperwork with filing - maybe invoices, receipts, anything else. I found come the weekend when it was quiet we could do the bookwork, enter expenses, so fuel, spares etc. Then deal with online transactions, Paypal, Stripe etc.

    For us one weekend a month we would try and sift through it all, so a good Saturday and Sunday morning. Sometimes we wouldn't do it, had to go out, take the kids out and then would get a little bit more behind. Right before we took on the accountant we had got 5 months behind and I couldn't remember some of the transaction details.

    So, I guess it really depends, in the early days if it is a simple business you run, you may be able to keep up, if it gets busy, you may find you run out of steam.

    Also, don't forget about HMRC Coporation Tax returns - I couldn't get them right and after a few rejections I gave up - the language on the forms is very 'accountant style' and really getting all of that correct and dealing with your tax affairs is I think where an accountant is invaluable.
    • tastyhog
    • By tastyhog 19th Mar 18, 5:45 PM
    • 501 Posts
    • 881 Thanks
    tastyhog
    next to none above what you'd do as a self employed person if you do it yourself, presumably you'll be keeping on top of your accounts, paying VAT, paying yourself etc anyway, so those are essentially the same.

    the only other thing is logging in to the companies house once a year to do your confirmation statement and file your accounts, which any decent accounting package will do anyway.

    or just pay's your money and get an accountant to do it all for you.
    • 2bFrank
    • By 2bFrank 20th Mar 18, 9:33 AM
    • 203 Posts
    • 109 Thanks
    2bFrank
    +1 for the accountant. The actual paperwork for the company is very little if you are just the owner, a confirmation statement every year and a few other bits is pretty much all I do, and my accountant helps me with this.

    However, for the finance side of things, you are looking at a world of pain. You can get software that helps you with this such as freeagent or sage. But one mistake can be costly. My accountant is worth their weight in gold, and they save me quite a lot too with efficient tax and vat planning.
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    • Vectis
    • By Vectis 24th Mar 18, 3:04 PM
    • 477 Posts
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    Vectis
    Remember, even if you employ an accountant you'll still have to spend time on an accounts package - unless your accountant is happy to receive a box full of random notes, letters, invoices, receipts etc. You will spend time allocating money to various accounts depending on what type of expenditure etc they are. How much time that takes really depends on how much business you will be generating.

    Why not start off as a sole trader, see how it goes and, down the line, if you feel you need help, then employ an accountant. Jumping straight in with a Limited Company, accountant etc if the turnover is only going to be a few grand is going to be overkill, which is why I would suggest starting off as a sole trader and seeing how it goes.
    • fishybusiness
    • By fishybusiness 24th Mar 18, 4:35 PM
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    fishybusiness
    Remember, even if you employ an accountant you'll still have to spend time on an accounts package - unless your accountant is happy to receive a box full of random notes, letters, invoices, receipts etc. You will spend time allocating money to various accounts depending on what type of expenditure etc they are.
    I'm not sure this is correct.

    You don't need an accounting package - just a way of generating invoices, and tracking payments. Unless you are some kind of retail business, where it is small cash and card payments to total and reconcile.

    We take to our accountant.... a file of fuel receipts, purchase invoices or receipts, electronic copy of our invoices uploaded to Box.com, and monthly bank statements.

    Their book keeper sorts it all out and tells us if the ins/outs don't add up.

    It takes us maybe 15 minutes to collect it out of boxes each month, 10 mins to generate and upload invoice data, and I drop them off when I am passing.
    Last edited by fishybusiness; 24-03-2018 at 8:53 PM.
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