Reply to: Advice on bcoming a limited company

[Chippie]

There is a similar rule for Ltd Companies - IR35. If your engagement does not look like one of 'self employment', then you need to pay all the income from the contract PAYE (including Employer's NI). So if you are under supervision, direction and control you may be worse off than sole trader. (IR35 is a bit more complicated than that - read up on the right, or download IPSE's guide to IR35 .)

Thanks for the link and the information. I will have a look at this tonight.

[mudskipper]

I did consider the sole-trader route, but I’ve been informed that sole-traders are no longer classed as self-employed when working on site under the direction of someone. Apparently, the only way around this would be limited, and tbh I would like the idea of forming my own brand.

There is a similar rule for Ltd Companies - IR35. If your engagement does not look like one of 'self employment', then you need to pay all the income from the contract PAYE (including Employer's NI). So if you are under supervision, direction and control you may be worse off than sole trader. (IR35 is a bit more complicated than that - read up on the right, or download IPSE's guide to IR35 .)

[Chippie]

How should we know? That's like asking you if the carpenter that just quotes me 50 quid is any good.

Its obvious any carpenter charging £50 is going to be naff.

Its a reasonable question, as others here may have experience or be familiar with such firms.

[northernladuk]

I’ve seen some companies online that offer accounting services for around £65 a month I believe it was. Are these any good?

How should we know? That's like asking you if the carpenter that just quotes me 50 quid is any good.

[Chippie]

Hi guys,

Thanks for all the replies, I really appreciate it.

Firstly, my apologies for posting this in the wrong section.

I did consider the sole-trader route, but I’ve been informed that sole-traders are no longer classed as self-employed when working on site under the direction of someone. Apparently, the only way around this would be limited, and tbh I would like the idea of forming my own brand.

I viewed some of the forms and paperwork via the gov.uk site, and it doesn’t seem the friendliest. I think I would prefer the easier option of hiring an accountant. I’d be worried about making a stupid error and receiving a huge fine from HMRC, and sometimes I’m just too tired after a 10-12hr day on-site. It’s odd, as I’ve recently started seeing a girl that does the accounts for a construction company, but it’s just too cheeky to even go there so I haven’t shared my idea with her, yet.

I’ve seen some companies online that offer accounting services for around £65 a month I believe it was. Are these any good?

[MB2]

The only other advantage I can see to being an ltd rather than sole trader is that you have more flexibility if you have a good year one year with ltd but ST you simply pay tax on everything that year so for steady work it is less of advantage.

Broadly the tax take has to be about the same or everyone would go one way or the other.

[NickFitz]

If you just want to waffle about stuff of no consequence with like minded folks then TPD is the place to be. Just don't try and read it all from the beginning, it's really not worth it and may do your sanity some long term harm

Also, a lot of FG's links don't even work any more

[WLB2018]

I would speak to an Accountant and seek their advice. From what I know of trades (chippies, plasterers, plumbers, sparkies and alike), they are all sole traders not Ltd.

[Maslins]

Stick to the professional forums (Accounting/Legal, Businedss/Contracts etc) until you find your feet and you'll be fine.

Yes...nobody's ever rude in the professional forums

My opinion (and for disclosure I am an accountant, but your situation wouldn't be one we could assist with so hopefully I'm unbiased) is a Ltd Co may well be a good option for you, but given your comments please don't even think about DIYing it. I'd recommend a more standard "small business accountant", rather than one of the "contractor specialists". Having said that, if you go for the latter, at least ensure they're one confident with things like CIS deductions, as I imagine you'll have to deal with that.

It'll inevitably take more than half an hour a week for the first couple of months as you get your head around it all...but yes, half an hour a week over the longer term sounds plausible for a one person company.

Whether it also means you can negotiate a better rate with the principles...no idea!

Good luck with it

[Lance]

I have a pal who is a chippy who refuses to deal with umbrellas.
He's not bothered with a LTD though. He's just self-employed and invoices directly.

Most IT contractors who don't want to use an umbrella, are LTD for 2 reasons. The first and main one is that agencies or clients want to deal with LTD companies not self-employed individuals.

The second reason is for tax efficiency. Whether that works for you is something that we cannot answer as we don't know the industry that well. What I can tell you is that there is a thing called the Construction Industry Scheme (https://www.gov.uk/what-is-the-const...ndustry-scheme). That is likely to limit your options, or at the very least have an input into what you decide to do.

What you need to do is to talk to an accountant who specialises in self-employed builders.

Good luck.


EDIT: Oh and running a LTD is easy as long as you read the guides, pay attention, and get a half decent accountant. There is a lot to learn but as long as you don't spend the tax mans money, and don't miss important dates for submissions it's not likely to go wrong.

[DaveB]

Less than friendly responses removed. Thread moved to Accounting/Legal.

@Chippie - in case you saw the responses I removed, don't worry about them. Some people are idiots.

General is a bear pit and the regulars always get excited at the prospect of fresh meat.

Stick to the professional forums (Accounting/Legal, Businedss/Contracts etc) until you find your feet and you'll be fine.

If you just want to waffle about stuff of no consequence with like minded folks then TPD is the place to be. Just don't try and read it all from the beginning, it's really not worth it and may do your sanity some long term harm

[NotAllThere]

Less than friendly responses removed. Thread moved to Accounting/Legal.

@Chippie - in case you saw the responses I removed, don't worry about them. Some people are idiots.

[DaveB]

Most people on here are IT contractors so you wont get much reedback directly related to your trade.

The balance between Self Employed, Ltd Company and Umbrella very much depends on your day rates. As a rule the lower the day rate the more marginal the gains are by going Ltd. It will be worth you doing some sums and working out just what you stand to gain or lose. Bear in mind that by going Ltd ytou may save brolly fees etc but will have to pay for accountancy and other running costs for the business and it will take time to manage.

The First Timers link on the left of the page has links to some online calculators that will help you get a better view. It's aimed at IT contractors but the basics still apply.

https://www.contractoruk.com/calculators

[original PM]

Really...

It depends on what jobs you take....

if you are only ever dealing with doing jobs for the general public you can get away with being a sole trader.

But what about this?

https://www.gov.uk/what-is-the-const...ndustry-scheme

And finally no it is not difficult to run a ltd company - but you will need an accountant - try a local one as you may find it cheaper - although it will depend on the complexity of the accounts.

Do you bleed radiators as part of your services?

[Manic]

Chippie

Suggest you ask a mod to move this to Accounting sub forum. There are some Guides on the right which will give you some background.

Personally I run my own accounts in Xero*, submit my own VAT and Companies house submissions, but use an accountant to produce my end of year and SA returns.

*Freeagent is another popular option.