DIY guide to setting up a limited company

[CanadianExpat]

I don't feel it's appropriate to join the debate about appointing an accountant or not (we're a practice) but a couple of useful bits:

We've written a book which is proving popular, but it might not go in to enough detail for you. On the plus side, it's free so take a look and see for yourself:

• Direct DL: Starting Contracting? Download our Free eBook – inniAccounts
• Amazon: http://www.amazon.co.uk/Preparing-Se...dp/B00EDMLXYS/
• iTunes: https://itunes.apple.com/us/book/pre...ed/id731022671

There's also Dave Chaplin's book which is a tome, but useful:
Contractors' Handbook: The expert guide for UK contractors and freelancers

Thanks very much for this list. I hadn't seen your book until now, but it's an excellent little guide (and you can't beat the price!)

I'm now largely up and running, having got very useful direction from an (only slightly bulkier) book, "The contractor's night job" . Very straightforward and has had everything I've needed so far.

[inniAccounts]

I don't feel it's appropriate to join the debate about appointing an accountant or not (we're a practice) but a couple of useful bits:

We've written a book which is proving popular, but it might not go in to enough detail for you. On the plus side, it's free so take a look and see for yourself:

• Direct DL: http://www.inniaccounts.co.uk/book/start
• Amazon: http://www.amazon.co.uk/Preparing-Se...dp/B00EDMLXYS/
• iTunes: https://itunes.apple.com/us/book/pre...ed/id731022671

There's also Dave Chaplin's book which is a tome, but useful:
http://www.contractorshandbook.co.uk/Default.aspx

[sal]

Clearly you've had a bad experience with accountants in the past. The important thing isn't how much time the accountants spends, it's how they spend the time.

In my experience, there are a lot of good accountants out there. Maybe the big contractor factories are only interested in doing the bare minimum, but a lot of the smaller contractor specialists are really good and really are worth their fees.

Your assumption is correct i went through 2 accountants in 2 years and caught them making simple mistakes like at the end of the financial year stating that it doesn't matter if i pay myself the last £786 until i hit the Dividend income threshold as salary or as dividend despite the fact that the total salary i had paid myself was about 4k (long story why it was so low). So i had to explain to him about pre-tax and post-tax profit and how his "advice" would have costed me £150-200 (can't be bothered with the math right now). Or missing the deadline for filling my end of year accounts with Companies houses, then failing to forward me the 2 penalty notices for £150 until it went to debt collector and court claim so i ended up paying £225...

So much for relying on their "expertise", thanks god i haven't had the need for advise on an actual complicated issue.

Can't be bothered changing accountants anymore as i lost hope and the amount of effort required is much greater than me going through my books on my own 4 times / year for a total of 2-3 hours and only using the useless sorry excuses of accountants for references when needed. So spare me the "You can't live without us" and "it's only 1500/year it's less than you make in a week" routine

Apologies if my post sounded offending to any accountants reading these forums, it wasn't my intend.

[ContrataxLtd]

Oh, Oh, you mean the 5min spend every now and then to send a reminder about filing VAT return and paying the VAT and once a year 1-2h to go through the "massive" amount of 50 or so outgoing invoices and about the same amount of incoming ones at the end of the year? When everything is already in IOB or similar electronic system already... C'mon

Besides the key word in your post is GOOD accountant - there aren't that many out there, most are only drones in a big consultancy and don't give a tulip as long as they have done the bare minimum promised in the contract if even that.

I agree that the key word is GOOD, some accountants I've heard of are shocking in the quality of service and advice, others I would say are worth their weight in gold. You may have had bad experiences before but not all firms are they same. We pride ourselves in personal service and giving great advice in a timely manner (I have to say that though don't I ).

Also, I'd echo just what The FaQQer said, it's not specifically the time spent dealing with the accounts on a monthly/yearly basis but the time spent keeping up to date with the ever changing tax laws, being there available to answer any queries that pop into the clients head and ensuring the client stays as tax efficient as possible without keeping into trouble.

Martin
Contratax Ltd

[Alan @ BroomeAffinity]

Oh, you mean the 5min spend every now and then to send a reminder about filing VAT return and paying the VAT and once a year 1-2h to go through the "massive" amount of 50 or so outgoing invoices and about the same amount of incoming ones at the end of the year? When everything is already in IOB or similar electronic system already... C'mon

Besides the key word in your post is GOOD accountant - there aren't that many out there, most are only drones in a big consultancy and don't give a tulip as long as they have done the bare minimum promised in the contract if even that.

Clearly you've had a bad experience with accountants in the past. The important thing isn't how much time the accountants spends, it's how they spend the time.

In my experience, there are a lot of good accountants out there. Maybe the big contractor factories are only interested in doing the bare minimum, but a lot of the smaller contractor specialists are really good and really are worth their fees.

[TheFaQQer]

Oh, Oh, you mean the 5min spend every now and then to send a reminder about filing VAT return and paying the VAT and once a year 1-2h to go through the "massive" amount of 50 or so outgoing invoices and about the same amount of incoming ones at the end of the year? When everything is already in IOB or similar electronic system already... C'mon

No, it's more like asking your accountant "what are the implications of paying a salary of £10000 this year?" and having them run the figures for you, calculating the savings over other salary options (OK, TCP did his spreadsheet that could be used, or you could ask on CUK and get a barrage of "what does you accountant say?" responses).

Or asking an accountant about HMRC policies that they either know off the top of their heads, or can go away and research and tell you the answer rather than having to do it yourself. Particularly when you want an opinion based on their experience (or that of their colleagues) rather than just looking at the blankness of the HMRC manuals and guidelines, which don't always reflect everything that they could do.

[GillsMan]

Plus you will need a reference from your accountant for even the simplest task of renting a place to live, since you are not a permie and you can't supply reference being your own employer. Not to mention getting any finance like mortgage.

This. I've probably needed an accountant reference for renting, mortgaging and being a guarantor for somebody about four or five times in the last few years.

[sal]

Not using an accountant is a bad idea unless you are fully up to speed on UK tax law and how it applies to micro-businesses, but it's your call.

I was thinking exactly what you are thinking - I had experience in accounting of small business in another country and the UK tax law that applies to the majority of the contractors is piece of cake. BUT in reality you need the accountant mostly to appear more credible to other business including clients. If you don't have an accountant you are regarded as irresponsible and not trustworthy businessman...

Plus you will need a reference from your accountant for even the simplest task of renting a place to live, since you are not a permie and you can't supply reference being your own employer. Not to mention getting any finance like mortgage.

+1 to this especially for the first few years. For the average contractor, accountancy fees are probably 2 or 3 days billing a year which is nothing considering the amount of time/effort a good accountant should save you.

Martin
Contratax Ltd

Oh, Oh, you mean the 5min spend every now and then to send a reminder about filing VAT return and paying the VAT and once a year 1-2h to go through the "massive" amount of 50 or so outgoing invoices and about the same amount of incoming ones at the end of the year? When everything is already in IOB or similar electronic system already... C'mon

Besides the key word in your post is GOOD accountant - there aren't that many out there, most are only drones in a big consultancy and don't give a tulip as long as they have done the bare minimum promised in the contract if even that.

[ContrataxLtd]

Not using an accountant is a bad idea unless you are fully up to speed on UK tax law and how it applies to micro-businesses, but it's your call.

+1 to this especially for the first few years. For the average contractor, accountancy fees are probably 2 or 3 days billing a year which is nothing considering the amount of time/effort a good accountant should save you.

Martin
Contratax Ltd

[tractor]

...

I'm a great fan of these boards, and particularly of the "first timers" articles. Fully conscious of the potentirisks, but with a good grounding in accounting (albeit in another country) and an interest in these matters, I've decided to do it alone without an account.

Can anyone recommend a good book that will help me to navigate Companies House, HMRC, setting up bank accounts and payroll, etc, with a minimum off fuss? I'm not looking for an idiot's guide to bookkeeping and tax, but more of a checklist and warning of the most important bear traps along the way.

Oxymoron alert!

[TheFaQQer]

I've decided to do it alone without an account.

How will you receive funds payable to the company without an account?

[CanadianExpat]

Go to www.ipse.co.uk and download the Guide to Freelancing from the Resources tab. If it's not in there you probably don't need it.

Not using an accountant is a bad idea unless you are fully up to speed on UK tax law and how it applies to micro-businesses, but it's your call.

Thank you. I will take a look at these.

[Alan @ BroomeAffinity]

Get an accountant. For what will likely be an annual investment of the equivalent of 2 days' work, it makes a lot of sense.

[malvolio]

I'm a great fan of these boards, and particularly of the "first timers" articles. Fully conscious of the potentirisks, but with a good grounding in accounting (albeit in another country) and an interest in these matters, I've decided to do it alone without an account.

Can anyone recommend a good book that will help me to navigate Companies House, HMRC, setting up bank accounts and payroll, etc, with a minimum off fuss? I'm not looking for an idiot's guide to bookkeeping and tax, but more of a checklist and warning of the most important bear traps along the way.

Go to www.ipse.co.uk and download the Guide to Freelancing from the Resources tab. If it's not in there you probably don't need it.

Not using an accountant is a bad idea unless you are fully up to speed on UK tax law and how it applies to micro-businesses, but it's your call.

[CanadianExpat]

I'm a great fan of these boards, and particularly of the "first timers" articles. Fully conscious of the potentirisks, but with a good grounding in accounting (albeit in another country) and an interest in these matters, I've decided to do it alone without an account.

Can anyone recommend a good book that will help me to navigate Companies House, HMRC, setting up bank accounts and payroll, etc, with a minimum off fuss? I'm not looking for an idiot's guide to bookkeeping and tax, but more of a checklist and warning of the most important bear traps along the way.