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Setting up finance

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    Setting up finance

    Hi everyone,

    I am new to contracting and I have just registered my ltd. company, however I will not start contracting until the New Year.

    In the meantime I need to purchase some tools and materials etc.

    Should I set up a business bank account funded with my personal money in order to pay for these, or should I pay from my personal account and keep the receipts.

    I don't intend to hire an accountant until the New Year.

    Any advice would be much appreciated.

    Regards

    #2
    Maybe one for the Accountancy section of the forums? Do I assume you are not an IT contractor then?
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Moved
      Down with racism. Long live miscegenation!

      Comment


        #4
        When I started up I set up my Ltd, opened my bank account and transferred 3K into it to buy equipment with. I recorded it as a directors loan and when I'd invoiced enough after starting paid the money back into my personal account and recorded it as a directors loan repayment.

        If you don't charge yourself interest you won't have any issues with BIK tax. If you do charge yourself interest on the loan then you'll need an accountant to explain and calculate the impact.
        Have you tried switching it off and back on again??

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          #5
          I don't think it would do any harm to start looking round for an accountant and getting a feel for the service you want. You could use this question as part of the process and get a view from them even though you haven't engaged yet. I am sure there are a couple of accountants that post on here would give a few minutes advice to someone that is genuinely looking for an accountant. Could be worth a shot to get the right answer and also cover other points you might not have considered yet. Maybe VAT and FRS for example?
          Some accountants also have different charging models for contractors on the bench which may affect the time you engage.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Thanks for the advice everyone. I will look for a friendly accountant.

            Comment


              #7
              Originally posted by theduchess View Post
              Hi everyone,

              I am new to contracting and I have just registered my ltd. company, however I will not start contracting until the New Year.

              In the meantime I need to purchase some tools and materials etc.

              Should I set up a business bank account funded with my personal money in order to pay for these, or should I pay from my personal account and keep the receipts.

              I don't intend to hire an accountant until the New Year.

              Any advice would be much appreciated.

              Regards
              Personally I would fund the company account and pay from that (as discussed in various other threads), but it's equally valid to pay out-of-pocket and then reclaim when cash flow permits.

              Always retain receipts. And keep a meticulous log - I'd suggest hand written (in whatever format makes sense to you) at least while you get started. You'll need a spreadsheet or accountancy package too, but a hand written 'primary record' can help untangle any mess.

              It costs nothing to sound out a few accountants so definitely do this even if you're not intending to engage someone immediately. While you're at it get some advice on VAT, FRS, and the 1% discount, and the best time to VAT register in view of the planned tools and materials purchases.

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