heads wrecked with running limited company, any good reading you can reccomend?

[ricflairandy]

Hi guys,

been contracting through umbrellas but now i have a contract in the uk, i have decided to go with sjd and set up my limited company.

Company is set up, filled in all relevant forms for sjd and buisiness bank account. However I have no idea what to do next. Having a scheduled call with the appointed accountant next week once he has received my forms.

My head is wrecked. I still cant work out how im going to take money out in the most efficient way, what i can and cant expense and how that saves me money (do i just save the tax on the expenses?), how im supposed to pay tax and when (is it just in 1 sum at the end of the year, therefore meaning that have to make sure that amount is saved in the account), if i have to pay for everything related to work through company account and not personal, etc etc.

My head is wrecked. So any advice is appreciated. With the umbrellas i literally just submitted expenses once a month and got paid with the tax taken away. I know it not going to be as easy as that, but still dont know what to do next.

Aparently sjd provide me with some kind of spreadsheets?.

thanks

[cojak]

Please take a look at the first timers guide on the right and also the guide regarding Limited Companies.

The answers to your questions (and more) will be found there. Also go back to your accountant with your questions, they will walk you through the spreadsheet they have given to you.

Come back when you understand the basics and have spoken to your accountant.

[malvolio]

Jeez... You don't suppose the time to ask was befiore you started...?

Your starter pack as below, available from any half decent Google:

First Timers Guide - for IT Contractors :: Contractor UK

PCGs Guide to Freelancing | PCG -- read this one if you don't read anything else...

SJD Contractors Guide - Step by Step Guide - Expenses Guide - Take Home Pay Calculator

and because you're bound to ask

Contractor Expenses Guide - What Can I Claim As a Contractor With My Own Limited Company

then, as Cojak says, come back when you've done some work for yourself.

HTH. Probably doesn't....

[ricflairandy]

Thanks,

i did look beforehand, and it seemed ok. I guess im just having one of those days when the stress is kicking in and i get into panic mode.

Thanks for the links, ill read up now.

[jmo21]

Thanks,

i did look beforehand, and it seemed ok. I guess im just having one of those days when the stress is kicking in and i get into panic mode.

Thanks for the links, ill read up now.

Don't worry, once you get going, it really is a piece of piss.

[northernladuk]

Thanks,

i did look beforehand, and it seemed ok. I guess im just having one of those days when the stress is kicking in and i get into panic mode.

Thanks for the links, ill read up now.

Gonna have to make sure you don't have too many of them then. Doesn't get any more basic than how you pay yourself and it's not like it is well enough documented. The accountants send you a some very comprehensive information to read so if you are falling over here wait till you get in to Opting in/out and IR35......

[Wanderer]

Company is set up, filled in all relevant forms for sjd and buisiness bank account. However I have no idea what to do next. Having a scheduled call with the appointed accountant next week once he has received my forms.

You're on the right track so don't worry. Read the "First Timers Guide" linked to on the right of this page.

I still cant work out how im going to take money out in the most efficient way, what i can and cant expense and how that saves me money (do i just save the tax on the expenses?)

Take £7488 salary and the rest in dividends. Use SJD's dividend planner to make sure you don't become a higher rate tax payer (unless you want to).

Ask the account these questions:

1. Should you defer taking a salary until 6th April because you have probably used up your personal tax free allowance.
   
2. How much you can take in dividends before you hit the higher rate tax limit for this year (they need your P45 to advise you on this).
   
3. If you are already into the higher rate tax, is it worth deferring taking dividends until 6th April? (if you don't need cash right away)

how im supposed to pay tax and when (is it just in 1 sum at the end of the year, therefore meaning that have to make sure that amount is saved in the account), if i have to pay for everything related to work through company account and not personal, etc etc.

If you take dividends into the higher rate tax bracket then you will pay extra tax at self assessment time, then you will also have to make a "payment on account" (like an advance payment) for next year. Ask your accountant to explain the implications of this.

My head is wrecked. So any advice is appreciated. With the umbrellas i literally just submitted expenses once a month and got paid with the tax taken away.

The accountant will have an expenses guide which will set out their advice about what is reasonable for you to claim. In the meantime, pay for everything from your own pocket and keep receipts, then ask the accountant to talk about what you can and can't claim. If you can't claim it then just bin the receipt. If you can then great, put it in the company's accounts.

Basically, you will get back about 20% of whatever you claim on expenses (40% if you are a higher rate taxpayer). So the net cost to you of a £100 train ticket will be £80.

The main difference between umbrella and LTD is that you can't claim a flat daily rate for subsistence as you may have done under an umbrella. Now you need to claim the actual amounts, but check with your accountant to see what their advice is on that.

Aparently sjd provide me with some kind of spreadsheets?.

Yep. Go to their website - anyone can download it for free, you don't have to be a customer. There is also a dividend planner one too. As I said above though, you have to have you P45 from the umbrella and discuss your personal situation with your accountant to decide how you will proceed. Once the new financial year starts on 6th April things are a lot more simple.

The spreadsheet will tell you how much you have as profit (ie, available to withdraw as a dividend) and how much is the company's money retained to pay for corporation tax and VAT. Corporation tax is paid 9 months after the year end so don't worry. VAT is paid every 3 months.

Ask your accountant but it's most likely that you should apply for the VAT Flat Rate Scheme.