Reply to: First timer - urgent advice needed

[victorantos]

Ltd

I've created my company when some potential client had asked me for my company number, but he found someone else later from London

I don't want any Unemployment Benefits, I just want to find an interesting web project to work on

[pmeswani]

I started my LTD last month, too
and I'm still loking for contracts...

You should have waited until you got your first contract before starting your Ltd Company. If you are on the bench, you may not be entitled to any Unemployment Benefits if you are a Director of the Limited company.

[victorantos]

good luck

I started my LTD last month, too
and I'm still loking for contracts...

[radish2008]

I did much the same thing, and went with an umbrella for the first 3 month contract intending to go back to my permie job at the end. I didn't, and always regretted not going Ltd. from the start.

So my suggestion is go Ltd., unless you're certain it is just for 3 months. Even then it could still be worth having the Ltd.

BTW don't expect an accountant to do everything for you. Having a Ltd. isn't like working through an umbrella, or being an employee. You have to take responsibility for the finances.

Indeed - I fully intend to carry on contracting regardless of what happens here. Although I've a very good chance of a 3 or 6 month extension. I've set up the Ltd and have just done my fisrt months books.Thanks for the advice re the accountant, Ill take that on board.


I think in general everyone has to start somewhere so I guess I'll just see where it takes me.

[QwertyBerty]

Go umbrella for the 3 months and see how it goes. Then if you make a decision to commit to contracting for, say, a couple of years then do the ltdco thing. A ltdco shouldn't be set up on a whim or for short term.

QB.

[chris79]

Don't forget that as a Limited company you may also need some professional indemnity insurance which could set you back a good number too.

As said above it's not a case of just paying 3 months payments to the accountants, the accounts and other things will be needing work done well beyond your 3 month contract.

On the VAT side, if your rate is £250 a day and you work say 46 weeks a year, this puts you below the VAT limit so registration for VAT is optional, might not be worth the hassle.. then again if you are hiring an accountant, then ask about the flat rate VAT scheme, it might put a few hundred quid in your pocket.. all counts I guess.

[PhilAtBFCA]

3 month Contract and a Limited Company

I think it maybe worth considering what you are getting into. A Limited Company comes with responsibility for filing ontime and paying taxes correctly. These are your responsibility whether you have an accountant helping you or not. So if you want to run your own business then a Limited Company maybe a good option. If you want to have some more money for three months then I would be carefull about doing this for the wrong reasons. All the legislation now means that having a Limited Company comes with the real intent to be a freelancer professional running a business, and taking the appropriate responsibility.

[VectraMan]

I did much the same thing, and went with an umbrella for the first 3 month contract intending to go back to my permie job at the end. I didn't, and always regretted not going Ltd. from the start.

So my suggestion is go Ltd., unless you're certain it is just for 3 months. Even then it could still be worth having the Ltd.

BTW don't expect an accountant to do everything for you. Having a Ltd. isn't like working through an umbrella, or being an employee. You have to take responsibility for the finances.

[blacjac]

They don't charge £100 per month.

They charge £1200 for a full years service, including final accounts, and in some cases self assesment, and let you pay in monthly installments.

[Alfie]

100 pound/month is too much!

it's only one or two contracts in 3 month period,
what has to do be done by an account company for 3*100=300 pounds? Register 2 contracts and some VAT???

Is it so complicated ?!

Not quite that simplistic I'm afraid. It may only be three months of trading, but a full set of accounts and CT600 will still have to be prepared. Then there's advice on setting up the company, shares, VAT, dividends, wages, expenses, a tax return as a company director, CH annual return, advice on possible closure of the company, IR35 reviews, registered office service...

£100 a month is on the expensive side of the contractor specialist accountants, but it's far from unreasonable.

[victorantos]

too much

100 pound/month is too much!

it's only one or two contracts in 3 month period,
what has to do be done by an account company for 3*100=300 pounds? Register 2 contracts and some VAT???

Is it so complicated ?!

[Sausage Surprise]

right - thanks for that - i have applied already the bank that i've used for the past several years, although i haven't actually registered the company yet. SJD accounts can do it all for around £100 a month - i was thinking it might be better to let them handle it all ... thanks for the advice though ... i'm presuming you can still trade until the vat registration comes through ... ?

Nixon Williams £60 + VAT per month.

[Alfie]

A company can be set up within 24 hours, VAT registration can take as little as 10 days if it's done online, and a bank account will take about a week depending on where you go.

However, three months isn't worth it. Even with the benefits of flat rate VAT the accountancy charges will outweigh the profits given your daily rate.

If you're seriously going to carry on contracting after this current contract then it's worth considering. I would suggest you call an accountant and have a chat.

[TykeMerc]

From the tone of your post it looks like you aren't committed to being a contractor in the medium to long term, obviously contracting isn't for everyone.

For a 3 month period I wouldn't bother setting up a Ltd. At 250 a day I doubt the amount you would save after accountants fees would be worth the effort.

[radish2008]

It takes a week or so to get the company incorporation certificate sorted, unless you buy an off the shelf company.
Once you have that, you can get a bak account opened the same day if you go to the right bank, we used HSBC.

However VAT registration can take anywhere from 1 week to 6 months, depending on how busy / lazy the VAT office is at the time.

right - thanks for that - i have applied already the bank that i've used for the past several years, although i haven't actually registered the company yet. SJD accounts can do it all for around £100 a month - i was thinking it might be better to let them handle it all ... thanks for the advice though ... i'm presuming you can still trade until the vat registration comes through ... ?