personal service companies

**malvolio** · 2 April 2007, 21:57

1. There's no such thing as a PSC

2. HMRC have said they will keep a careful eye on companies set up by ex-MSCs for the previous clients, since they will be assumed to be a continuation of the artifical tax avoidance schemes that they are trying to wipe out.

3. The real options are use an umbrella or get your own Ltd Co

4. You have about 3 days to do it...

5. Stop panicking, have a search through this site for accountants that will set up the Ltd Co for you - SJD and Nixon Williams will do that for a start - and then give them a call.

6. If you do go with your own company, look forward to gaining around 5% more disposable income.

7 Visit www.pcg.org.uk and sign up...

**Maxamus** · 2 April 2007, 22:09

Hi and welcome to the forum.

Im a Highways Engineer who use to be composite up until January when i set up my own Ltd company.

I would seriously recommend that you go the Ltd route. Its less hassle and more income!

I was new to all this Legal and Accounting side of Ltd company as you can imagine i have spent my entire life in a technical field so i was bit unsure about going Ltd in the beginning but i have to say its the best thing i've done.

The first thing i done was shop around for an accountant. I chose to get an accountant local to where i live because im old fashioned and prefer the face to face feel. After ringing up a few accountants in the neighborhood i decided to go with a specialist one that specialises in Tax, a firm of "Chartered Accounats and Chartered Tax Advisors". My mate recommened them to me as they audit and do accounting for his fathers multi-million pound business.

I ended up going for the formal chat to run them through the services and products i was after and they took everything on board. I have happy and decided that i wanted them to proceed from that point on. They got me to sigh a few forms for HMRC and companies house to get my ltd co. setup. All went smoothly and i was sent copies through the post of all contracts between me and the accountant and all docs sent to HMRC/Companies house.
An initail charge of £150 was required to get my registered. From then on i setup some spreadsheets to Administor the business. My accountant takes care of all returns and all my payroll on a monthly basis. My accountant charges me £750 per annum to do all my stuff but there are cheaper ones.

Im now at a stage where evrything is simple. I do my books once a month and all my spreadsheets are setup so that it doesnt take me more than an hour to do everything.

I setup a HSBC business bank account as soon as i recieved my registration certificate and being a customer of HSBC it only took 30min to set it all up and get it running. Simple as that!

Now all i do is weekly invoices and i manage my business banking via internet banking.

I have to say i am in full control of my financial affairs. If ever i am unsure i drop the accountant an email and he advises me as necessary.

Plus it great fun also setting up your company logos, invoices, headers etc. I like it. Plus it gives you a great insight into how companies operate in the legal and financial system. Its rewarding really.

I wouldnt let a third party now run my affairs. I like the control.

As for the benefits of Ltd company route:

1. Tax efficient payment system available of salary and dividends.
2. Benefit from VAT Flat Rate Scheme, which can boost your gross income by 3.4% in
the first year (worth £2,040 based on £60,000 per annum contract).
3. Greater choice of expenses available through your own company.
4. If your contract is caught by IR35 you can still benefit by claiming many expenses
and the 5% allowance.

My advise to you would be:

- Shop around for an accountant and arrange an initial formal meeting. There plenty recommened here and im sure there will be quality ones local to you aswell. Draw up a contract of services. Expect to pay £600 - £1000 for a quality accountant. A good accountant will make your experience a pleasent one.

- Once you have done that, open a business bank account. Plenty out there but get a good one that offers FREE banking and telephone/internet banking.

- Read up on IR35

- Get insurance if you want to

That should be enough to get you started!

Should you come stuck, feel free to post here and the people here will be sure to help out.

Good Luck

**thunderlizard** · 3 April 2007, 02:06

hear hear Maxamus.
Sounds like that PSC outfit is offering you just the services that an accountant would, but in a somehow scammy way.

**The Lone Gunman** · 3 April 2007, 06:12

What thye said:

Plus there is Darren@1staccountancy as a member of this site. He just changed the name of his accountancy business to Upton.
Darren, SJD and Nixon Williams all get good reviews here.

Get quotes from them and compare it to your MSC quote.

I would suggest that setting up your own Ltd. will drop you off the radar. I am sure that all those MSCs that are trying to go the managed Ltd route will get all the Ltds they set up investigated. I am also sure that they will all fall foul of the MSC regulations. The hassle of challenging this in court just will not be worth it.

Set up your own Ltd. Take control of your contract terms.

BTW: Mal is right. PSC is just a convenient term for the tax man to use to single the likes of us out.

personal service companies