Reduce limited company expenses when no trading or inactive

[Chart Accountancy]

Most accountants rely on a year's worth of income.

QDOS are very good - if you are not invoicing you pay a lower rate. Highly recommended.

I can not see any prices listed on their website.

[Chart Accountancy]

It's easier than that (I've just done it). It's part of the PAYE EPS/FPS to close the scheme (I use Payroo and it was easy), and VAT takes far less than 15 minutes online to deregister.

I'm surprised nobody has popped up to promote FreeAgent yet, but there are accountants that will do just the difficult year end part for £150 if you use FreeAgent for everything else. Obviously you won't get any hand holding, but it'll be a lot cheaper than £170pm.

Unfortunately, you can not close a payroll scheme via FreeAgent and this can be done either the old fashioned way of sending a letter or using the basic hmrc tool or another free software. I have not heard of payroo before. I like another free cloud payroll software but will also have a look at this one, thanks.

[VectraMan]

PAYE can simply be closed with a letter. VAT deregistration takes 15 min online.

It's easier than that (I've just done it). It's part of the PAYE EPS/FPS to close the scheme (I use Payroo and it was easy), and VAT takes far less than 15 minutes online to deregister.

I'm surprised nobody has popped up to promote FreeAgent yet, but there are accountants that will do just the difficult year end part for £150 if you use FreeAgent for everything else. Obviously you won't get any hand holding, but it'll be a lot cheaper than £170pm.

[BrilloPad]

PAYE can simply be closed with a letter. VAT deregistration takes 15 min online. I don't see how he can incur a hefty bill for this. Though, depending on how many months he paid his accountant, he may have to pay additional fee to prepare a full set of accounts. The OP can also keep the company dormant instead of closing it down if the OP is planning to trade again in the near future. However, if he takes the first available opportunity to work as an employee and switch back to contracting in the near future, it may become a concern with regard to IR35.

Most accountants rely on a year's worth of income.

QDOS are very good - if you are not invoicing you pay a lower rate. Highly recommended.

[Chart Accountancy]

What ASB said.

A Ltd Co is not a suitable vehicle for very short term contracting stints.

You can't set up a company, register it for VAT as an employer, trade for a couple of months then make it dormant/put it on hold cos you've taken on a PAYE role elsewhere. You've basically got to either keep it going with all the ongoing responsibilities (and hence costs if you want assistance with them), or shut it down in which case you've basically got to reverse everything done at setup, file a corporation tax return with full accounts negligibly different to had the company traded a whole year. If you want your "pay monthly" accountant to assist with the latter when you'd only been trading and paying them a couple of months, expect a hefty additional charge.

PAYE can simply be closed with a letter. VAT deregistration takes 15 min online. I don't see how he can incur a hefty bill for this. Though, depending on how many months he paid his accountant, he may have to pay additional fee to prepare a full set of accounts. The OP can also keep the company dormant instead of closing it down if the OP is planning to trade again in the near future. However, if he takes the first available opportunity to work as an employee and switch back to contracting in the near future, it may become a concern with regard to IR35.

[Maslins]

What ASB said.

A Ltd Co is not a suitable vehicle for very short term contracting stints.

You can't set up a company, register it for VAT as an employer, trade for a couple of months then make it dormant/put it on hold cos you've taken on a PAYE role elsewhere. You've basically got to either keep it going with all the ongoing responsibilities (and hence costs if you want assistance with them), or shut it down in which case you've basically got to reverse everything done at setup, file a corporation tax return with full accounts negligibly different to had the company traded a whole year. If you want your "pay monthly" accountant to assist with the latter when you'd only been trading and paying them a couple of months, expect a hefty additional charge.

[ASB]

They send me my "weekly account summary", a PDF document sent by email which consists in a column of zeroes, no income, no expenses. Brookson says after 6 months of inactivity my status will become "no trading" and they would charge me £50 per month. I've argued that in reality I'm currently no trading so why not giving me discount now? But apparently these are not the rules.

I believe my options are:

• Change of accountant
• Keep my company dormant (call HRMC and tell them I'm no trading)
• Buy a software to do the paperwork instead of having accountants

By definition your company is not dormant in any reporting period which includes trading activity (btw the company paying an accountant would make it non dormant). You could pay fees yourself and not claim them back from the co. though.
https://www.gov.uk/dormant-company

[fatJock]

£170 a month 😱

My accountant does my PAYE, YE accounts and SA for a fraction of that.

Add to that he's really responsive. Some folks taking the piss out there.

[Chart Accountancy]

Dear Brookson

I understand you have a "no trading" fee of £50 / month. If you will not move me to that immediately, I will change accountants and you will receive a "no client" fee of £0 / month.

Best regards
derloopkat

£50 per month for a dormant company is high. The normal charge is £10 for a dormant company. However £170 pm for a contractor is the highest accountancy fee I have come across in my practice and it appears to be unreasonably high and I don't think any accountant can justify this level of fee for simply accounting. Perhaps, other services are included, such as registered, service address, insurance. The standard full accounting service package for a contractor is in the region of £69-£100 per month.

[WordIsBond]

Brookson says after 6 months of inactivity my status will become "no trading" and they would charge me £50 per month. I've argued that in reality I'm currently no trading so why not giving me discount now? But apparently these are not the rules.

Dear Brookson

I understand you have a "no trading" fee of £50 / month. If you will not move me to that immediately, I will change accountants and you will receive a "no client" fee of £0 / month.

Best regards
derloopkat

[derloopkat]

They send me my "weekly account summary", a PDF document sent by email which consists in a column of zeroes, no income, no expenses. Brookson says after 6 months of inactivity my status will become "no trading" and they would charge me £50 per month. I've argued that in reality I'm currently no trading so why not giving me discount now? But apparently these are not the rules.

I believe my options are:

• Change of accountant
• Keep my company dormant (call HRMC and tell them I'm no trading)
• Buy a software to do the paperwork instead of having accountants

[ASB]

If there arw no substantive transactions during a complete financial year then dormant accounts can be filr. Op is not in this state but may reach it.

2040 a year for the accountantcy sevices payable in 12 convenient monthly instalments of 170 seems pricy.

Of course a lot of the work needs doing and is not dependant on number of transaction. I am sure the op can check their agreement with the provider to see what they agreed to. But for that price i would be expecting quite a lot of services.

[VectraMan]

Ouch. If you must keep your company going somebody is going to have to do the work; it isn't necessarily any less just because you're not in a contract.

[Mordac]

By October last year I became a contractor in the IT sector and completed two assignments (2 to 3 months each) as senior software developer, using my new limited company. For the last 3 months I was not working but still paying my accountant Brookson £170 a month as they claim I need their services anyway. My understanding about accountancy is very poor, but I must be prepared for contracting again so I haven't closed my company.

My question is:

How can I reduce to the minimum my expenses in periods of inactivity?

Not sure if HMRC was told I'm not trading but my company appears "Active" in the register. Wish to reduce accountancy fee and probably my corporate tax. I'm not aware of other expenses.

They saw you coming. Ask them what they actually do for their £170 a month. They won't like the question, but ask it anyway. You should be able to do 90% of it yourself, and if you can't (especially when you're not earning) you shouldn't be contracting through a limited.

[derloopkat]

By October last year I became a contractor in the IT sector and completed two assignments (2 to 3 months each) as senior software developer, using my new limited company. For the last 3 months I was not working but still paying my accountant Brookson £170 a month as they claim I need their services anyway. My understanding about accountancy is very poor, but I must be prepared for contracting again so I haven't closed my company.

My question is:

How can I reduce to the minimum my expenses in periods of inactivity?

Not sure if HMRC was told I'm not trading but my company appears "Active" in the register. Wish to reduce accountancy fee and probably my corporate tax. I'm not aware of other expenses.