New contractor needs some very fundamental advice.

[cagedcity]

If anyone has the inclination to answer these very basics I would be very grateful. Thanks in advance.

I am currently in the on boarding process for an IT contract role at a top investment bank. I have yet to set up my Ltd company and company bank account.

1) I assume that the formation agent on this website is a good way of registering the company and it's fees are competitive?
2) Is "<MY Name> Limited" a reasonable name for my company?
3) The companies registered address is highly likely to change in the next couple of months (as I am moving), will this be OK? Will I incur any charges?
4) I have yet to see the contract as it still being approved internally, how will I know the IR35 compliance of the role?
5) I am keeping the Ltd company as simple as possible with me as director, no secretary and no shareholders. So the money gets paid into the business bank account via an Recruitment Process Outsourcing (RPO) company. So I pay myself a salary from the account and would leave some money in there for paying tax when it is due. How will can I guess how much tax I will have to pay?
6) Someone told be something about having to pay VAT on this salary? Huh?
7) What financial transactions do I need to record, just timesheets & expenses? What would be regarded as an expense? I'm assuming that these are just declared during the tax return and are not taxed?
8) Where does IR35 come into all of this?
9) Do I need an accountant? What would they do?

Thanks, I have attempted reading through dozens of 'informative' websites but I am at a loss. Perhaps I'm just being lazy.

Cheers.

[stek]

If anyone has the inclination to answer these very basics I would be very grateful. Thanks in advance.

I am currently in the on boarding process for an IT contract role at a top investment bank. I have yet to set up my Ltd company and company bank account.

1) I assume that the formation agent on this website is a good way of registering the company and it's fees are competitive?
2) Is "<MY Name> Limited" a reasonable name for my company?
3) The companies registered address is highly likely to change in the next couple of months (as I am moving), will this be OK? Will I incur any charges?
4) I have yet to see the contract as it still being approved internally, how will I know the IR35 compliance of the role?
5) I am keeping the Ltd company as simple as possible with me as director, no secretary and no shareholders. So the money gets paid into the business bank account via an Recruitment Process Outsourcing (RPO) company. So I pay myself a salary from the account and would leave some money in there for paying tax when it is due. How will can I guess how much tax I will have to pay?
6) Someone told be something about having to pay VAT on this salary? Huh?
7) What financial transactions do I need to record, just timesheets & expenses? What would be regarded as an expense? I'm assuming that these are just declared during the tax return and are not taxed?
8) Where does IR35 come into all of this?
9) Do I need an accountant? What would they do?

Thanks, I have attempted reading through dozens of 'informative' websites but I am at a loss. Perhaps I'm just being lazy.

Cheers.

Oh dear.....

[Clare@InTouch]

1) I assume that the formation agent on this website is a good way of registering the company and it's fees are competitive?

It's worth shopping around - if you just want a company set up that's one option, but if you want advice about shares, VAT registration and bank account applications prepared for you then you may be better off going through an accountant.


2) Is "<MY Name> Limited" a reasonable name for my company?

You can have whatever you want as long as it's not copyright or already taken (plus certain restricted words such as Society and Chartered)

3) The companies registered address is highly likely to change in the next couple of months (as I am moving), will this be OK? Will I incur any charges?

No - you can update it for free online or via a form you can download from Companies House.

4) I have yet to see the contract as it still being approved internally, how will I know the IR35 compliance of the role?

IR35 depends on what actually happens in practice, and ideally this should be reflected in the written contract. When you have a role secure it's worth then comparing the working conditions to what you know about IR35, or getting a review from an expert.

5) I am keeping the Ltd company as simple as possible with me as director, no secretary and no shareholders. So the money gets paid into the business bank account via an Recruitment Process Outsourcing (RPO) company. So I pay myself a salary from the account and would leave some money in there for paying tax when it is due. How will can I guess how much tax I will have to pay?

Get an accountant. Seriously. Even if it's just for the first year until you get used to everything and you're confident enough to do it yourself.


6) Someone told be something about having to pay VAT on this salary? Huh?

There is no VAT on salary.

7) What financial transactions do I need to record, just timesheets & expenses? What would be regarded as an expense? I'm assuming that these are just declared during the tax return and are not taxed?

A company prepares accounts and tax returns each year, and you as a director also prepare and file a different tax return each year. Expenses will generally be anything you need to incur in order to run the business - stationery, professional fees, travel costs etc

8) Where does IR35 come into all of this?

IR35 will determine the level of wage you have to take, and therefore the tax you will pay.

9) Do I need an accountant? What would they do?

Yes. They will advise on set up, taxes, expenses, filing dates, taxes due and due dates and generally the running of the company. Many people get into a mess because they don't fully understand what they are doing or what they need to do - for a small monthly fee it's worth the cost (I know I would say that, but I genuinely believe you need the advice in your first year).

[Steven@Parasol]

If anyone has the inclination to answer these very basics I would be very grateful. Thanks in advance.

I am currently in the on boarding process for an IT contract role at a top investment bank. I have yet to set up my Ltd company and company bank account.

1) I assume that the formation agent on this website is a good way of registering the company and it's fees are competitive?
2) Is "<MY Name> Limited" a reasonable name for my company?
3) The companies registered address is highly likely to change in the next couple of months (as I am moving), will this be OK? Will I incur any charges?
4) I have yet to see the contract as it still being approved internally, how will I know the IR35 compliance of the role?
5) I am keeping the Ltd company as simple as possible with me as director, no secretary and no shareholders. So the money gets paid into the business bank account via an Recruitment Process Outsourcing (RPO) company. So I pay myself a salary from the account and would leave some money in there for paying tax when it is due. How will can I guess how much tax I will have to pay?
6) Someone told be something about having to pay VAT on this salary? Huh?
7) What financial transactions do I need to record, just timesheets & expenses? What would be regarded as an expense? I'm assuming that these are just declared during the tax return and are not taxed?
8) Where does IR35 come into all of this?
9) Do I need an accountant? What would they do?

Thanks, I have attempted reading through dozens of 'informative' websites but I am at a loss. Perhaps I'm just being lazy.

Cheers.

Any of the good specialist contractor accountants will go through all of your questions with you for no charge. Most will also set up your limited company for you as part of their monthly fee.

I am bias as I work for a contractor accountant and an umbrella company but I would always advise a chat with experienced, specialist professionals, particularly if this is your first contract.

The cost of getting it wrong could mean your business gets into difficulty before you've even got off the ground.

[Clippy]

If anyone has the inclination to answer these very basics I would be very grateful. Thanks in advance.

I am currently in the on boarding process for an IT contract role at a top investment bank. I have yet to set up my Ltd company and company bank account.

1) I assume that the formation agent on this website is a good way of registering the company and it's fees are competitive?
2) Is "<MY Name> Limited" a reasonable name for my company?
3) The companies registered address is highly likely to change in the next couple of months (as I am moving), will this be OK? Will I incur any charges?
4) I have yet to see the contract as it still being approved internally, how will I know the IR35 compliance of the role?
5) I am keeping the Ltd company as simple as possible with me as director, no secretary and no shareholders. So the money gets paid into the business bank account via an Recruitment Process Outsourcing (RPO) company. So I pay myself a salary from the account and would leave some money in there for paying tax when it is due. How will can I guess how much tax I will have to pay?
6) Someone told be something about having to pay VAT on this salary? Huh?
7) What financial transactions do I need to record, just timesheets & expenses? What would be regarded as an expense? I'm assuming that these are just declared during the tax return and are not taxed?
8) Where does IR35 come into all of this?
9) Do I need an accountant? What would they do?

Thanks, I have attempted reading through dozens of 'informative' websites but I am at a loss. Perhaps I'm just being lazy.

Cheers.

Allow me to assist, starting with Q9.

Yes, you will need an accountant.

Q1 - Q8: Speak to your accountant.

I'm not being flippant, but your accountant will be able to answer these questions for you.

And before you ask "can you recommend an accountant" do a search of the forum as there are numerous threads on this topic - the most recent asked about a week ago.

[TykeMerc]

Oh dear.....

I wouldn't normally agree with a non comment in Accounting/Legal, but that's fair.

To answer your questions in 1 go.

9) Yes and they can guide you through the rest (answering questions like yours is part of what they do). Generally it's better to engage one who understands contractor requirements.

There are plenty of good accountants who post on CUK, I use Nixon Williams whose service I'm very happy with, they and I'm sure the others will even do company formation for you. It's very clear that you need a good accountant on board.

[prozak]

If anyone has the inclination to answer these very basics I would be very grateful. Thanks in advance........... etc...

1) I use companies made simple.... £30 quid for basic set up. I use them for registered offices and service address as well..... decent service most of the time and good prices.

2) Um... No.

3) No charges. But why not use an address from a company. You never have to change it and no one knows your home address as it is on public record..

4)Get your contract checked.

5) You will pay 21% corp Tax. on profits from now until april. Then 20%. Pay small salary and dividends. I recommend "Salary vs Dividend" from The TaxCafe.

6) No. VAT is paid to you for your services if registered.
7) Oh dear.... do a search. ir35calc has a list of acceptable expenses as do lots of places.
8) when the bogey man cometh to get you.
9) I think YOU do. Not everyone does.

Enjoy.

[Wanderer]

9) Do I need an accountant? What would they do?

Great answer from Clare@InTouch who has made it clear that they would do pretty much everything you list.

A couple of things that stick out:

Q1: Engage an accountant to sort the formation out for you. As well as the company formation, they can get you sorted with a bank account, VAT, FRS, Liability Insurance and whatever else at the same time. If you do something odd with the company formation then it may be a pain to fix. You're going to be paying them about £1200/year so don't go penny pinching on the DIY stuff which will just get you in a load of (expensive) trouble with HMRC. The accountant will get it right first time.

Q2: Personally, I wouldn't use my own name for the company name as I don't want to look like a one man band (even though you are I think it may be a bit more professional sounding to have another name!). Nothing to stop you doing that if the name is available though.

Q3: Ask your accountant if you can use their address as a company registered office - that way they get all the company stuff direct to them. Sorted. You can change this easy enough if you ever need to.

Q4: You have broken rule number 1 here. Don't start work without a contract. What are you going to do when you get a copy of the contract and it's for less money than you agreed verbally or the length/notice period are different to what you thought they would be? I'll give you a hint: Don't come crying to us because you'll get no sympathy here.

All the other questions are best answered in a one-on-one session with your accountant. Also, take a look at the right side of the page and click the link that says "First Timers" if you've not already done so.

Good luck!

[cagedcity]

Thanks everybody! Some great answers to my specifics.

I think I'll get myself an accountant.

[malvolio]

Thanks everybody! Some great answers to my specifics.

I think I'll get myself an accountant.

Good idea. And join the PCG to find out how the world really works