ltd formation, insurance, salary

[thebigbojo]

Hey, been lurking in the forums these past few days trying to figure out my options.

Basically, I've been offered some IT contract work for the next few months. I'm just coming out of uni so have no other earnings this financial year and total will be under any NI thresholds (full or proportional to the amount of time remaining in the year). Not sure if will get a job or stick to contracting afterwards.

1. for registered and service address, is rapid formations 39 + 24/y a good deal?

2. is professional indemnity insurance required for a ltd? is not getting it going to lead to liability for a director? Should I be getting digital insurance? randsomware isn't a concern but stolen credentials could be?

3. are the default companies house articles of association suitable for a sole director ltd? Does article 7 mean the quorum and conflict of interest clauses don't stop you from passing resolutions at a directors meeting?

4. How do you pay yourself a salary as a director? for dividends you need a directors meeting with minutes and a dividend voucher, but if I just want to pay myself an amount as salary do I need to record that as a decision anywhere or do I just enter the amount I want to take out in PAYE software? Don't care about tax here, just the actual procedure.

5. is the hmrc's free paye tools adequate for my situation?

6. Are there any drawbacks to the free starling business bank account in my situation? I don't deal with cash and have no foreign transactions.

7. Do I need bookeeping beyond the bank account transaction history and PAYE software? As in, do I need to keep an ongoing P&L / Balance sheet, director's loan accounts (even if I don't use them)?

8. If at the end of the year I only pay myself 5k through the company, and company bank account is empty at the end of the year, is my P&L just going to be 5k in 5k out, balance sheet of 0 in a format I can lift off any other company on Companies house?

9. Is there any value in getting an incorporation package such as the rapid formations 'digital plus'
The register and minutes templates seem like they could be useful as do the legal contract templates. But do you actually need any of that?

10. Say come January I've stuck to contracting and made above the income tax lower threshold. How much will it cost to get an accountant to check over everything then compared to getting one now?

Hope most of my qs are new, couldn't find exact answers while searching and my situation is a bit unusual.

Thanks!

[CryingSheep]

Hey, been lurking in the forums these past few days trying to figure out my options.

Basically, I've been offered some IT contract work for the next few months. I'm just coming out of uni so have no other earnings this financial year and total will be under any NI thresholds (full or proportional to the amount of time remaining in the year). Not sure if will get a job or stick to contracting afterwards.

1. for registered and service address, is rapid formations 39 + 24/y a good deal?

2. is professional indemnity insurance required for a ltd? is not getting it going to lead to liability for a director? Should I be getting digital insurance? randsomware isn't a concern but stolen credentials could be?

3. are the default companies house articles of association suitable for a sole director ltd? Does article 7 mean the quorum and conflict of interest clauses don't stop you from passing resolutions at a directors meeting?

4. How do you pay yourself a salary as a director? for dividends you need a directors meeting with minutes and a dividend voucher, but if I just want to pay myself an amount as salary do I need to record that as a decision anywhere or do I just enter the amount I want to take out in PAYE software? Don't care about tax here, just the actual procedure.

5. is the hmrc's free paye tools adequate for my situation?

6. Are there any drawbacks to the free starling business bank account in my situation? I don't deal with cash and have no foreign transactions.

7. Do I need bookeeping beyond the bank account transaction history and PAYE software? As in, do I need to keep an ongoing P&L / Balance sheet, director's loan accounts (even if I don't use them)?

8. If at the end of the year I only pay myself 5k through the company, and company bank account is empty at the end of the year, is my P&L just going to be 5k in 5k out, balance sheet of 0 in a format I can lift off any other company on Companies house?

9. Is there any value in getting an incorporation package such as the rapid formations 'digital plus'
The register and minutes templates seem like they could be useful as do the legal contract templates. But do you actually need any of that?

10. Say come January I've stuck to contracting and made above the income tax lower threshold. How much will it cost to get an accountant to check over everything then compared to getting one now?

Hope most of my qs are new, couldn't find exact answers while searching and my situation is a bit unusual.

Thanks!

2 - There is no mandatory requirement for insurance to cover a ltd company, mostly depends on how adverse you are to risk and mainly to the client demands (some clients demand your ltd to have some types of insurance)

3 - If you are the director, only shareholder and only employee, you can make any decision on your own, no conflict of interest.

4 - Yes, just transfer to your personal account the salary and explain it or your bookkeeping. You will also have to run PAYE and submit it to the HMRC every month before 6th of the next month (I believe).

5 - It should be

6 - I have been using Starling business account, all good so far! It's a business account like any other, except everything is free! Maybe have a look at RBS, they offer 2 years free business account for companies that are running for less than a year, plus offer a subscription for Free Agent. Free Agent is probably the most popular bookkeeping software around here. It can make your life easier including easily running and submitting your PAYE salary with HMRC - Just for that I believe its worth the ~60£ the RBS account might cost you (after the first 2 free years - can also be more if you make loads of transactions)

7 - Yes... you need to explain every money going in and out of the company. This includes a detail of every allowable expenses you might claim, salary, pension, etc.

8 - if you only make 5k and no other source of income and you will take it as salary you wont be due any income tax (only corporation tax). But you still need to report it to HMRC

9 - No clue what is that, so probably is because isn't useful or worth the cost! You can get templates of minutes and anything else, free, just google it.

10 - Not sure, never had one.

[northernladuk]

Hope most of my qs are new, couldn't find exact answers while searching and my situation is a bit unusual.

Not one of them are new. It's the absolute basics every contract has to go through so is covered ad infinitum in the Guides to the right or by using the search function which is explained in the welcome/FAQ section.

But that said, just go umbrella.

[CryingSheep]

Go umbrella.

Now I have a question... Is there a minimal amount to consider an umbrella?

Lets say OP will invoice around 20k/year, is that enough to a umbrella "bother" with it or to make sense to use take into account the fees associated?

Sent from my ONEPLUS A6000 using Contractor UK Forum mobile app

[northernladuk]

It used to be around 30k but that was back in the day when expenses were allowed so would depend now but its a no brainer for the OP for many reasons.

Go brolly, for the first few months. If it works out then the OP has plenty of time to read the newbie guides and so some basic research and then he can just switch to Ltd when he's ready.

[ladymuck]

Go brolly, for the first few months. If it works out then the OP has plenty of time to read the newbie guides and so some basic research and then he can just switch to Ltd when he's ready.

Exactly what I did. Gets you earning while you're still learning!

Also handy if you want align your financial year to the tax year, something that seems to be important to some people.

[jmo21]

A few months work, doesn't know if will continue contracting past then, mentions £5k ( is that how much you expect to invoice?), an accountant will cost ~£1k.

+1 for umbrella