Reply to: Setting up ltd co

[northernladuk]

I'm just about to go into my first contract, start Monday, I had absolutely no idea where to start. There is so much info out there, that putting it into a brief 10 step guide isn't the case. Totally depends on you and how you want to run (Ltd) or be run (Umbrella).

The way I decided was tapping up all the contractors I know of in the office and seeing what they do and how they work, and borrowing ideas from them, networking really does help here. Having experienced guys explain the pitfalls of IR35 and how to work in a work place being a contractor have been invaluable.

After I decided, I phoned up SJD and they answered pretty much every question that I had that hadn't been answered.

Until they get sick of you and lose all respect for you. No one likes a lazy shister.

[Nathan SJD Accountancy]

Ok, maybe a little bit

Haha. No worries.

Pages 8 - 15 are about SJD and who we are, 16 - 57 is all to do with VAT, IR35, expenses, contracting etc.

[malvolio]

I'm just about to go into my first contract, start Monday, I had absolutely no idea where to start. There is so much info out there, that putting it into a brief 10 step guide isn't the case. Totally depends on you and how you want to run (Ltd) or be run (Umbrella).

The way I decided was tapping up all the contractors I know of in the office and seeing what they do and how they work, and borrowing ideas from them, networking really does help here. Having experienced guys explain the pitfalls of IR35 and how to work in a work place being a contractor have been invaluable.

After I decided, I phoned up SJD and they answered pretty much every question that I had that hadn't been answered.

The definitive and commercially neutral guide to all things freelance (not just IT contracting or small company accounting) is the PCG one. Go to www.pcg.org.uk and look for the Guide to Freelancing. But really you need to read and understand everything you can get your hands on for a proper perspective. You will be amazed at how much you don't know

[Waldorf]

Nathan is too modest to say but the SJD website has an excellent free (you do have to sign up) beginner's guide.

My accountant, Nixon Williams has a very good guide and you can access all their guides without having to register on the website.

http://www.nixonwilliams.com/images/...ny%20Guide.pdf

[SeaBass]

I got sent an unsolicited richard nixon guide. That was very useful.

[LumbaBread]

Yes you are.

Ok, maybe a little bit

[spongeym]

I'm just about to go into my first contract, start Monday, I had absolutely no idea where to start. There is so much info out there, that putting it into a brief 10 step guide isn't the case. Totally depends on you and how you want to run (Ltd) or be run (Umbrella).

The way I decided was tapping up all the contractors I know of in the office and seeing what they do and how they work, and borrowing ideas from them, networking really does help here. Having experienced guys explain the pitfalls of IR35 and how to work in a work place being a contractor have been invaluable.

After I decided, I phoned up SJD and they answered pretty much every question that I had that hadn't been answered.

[northernladuk]

I got that guide today. Bit of a shame almost 1/3 of it is all about SJD and what they can do for you , testimonials etc. The rest is I suppose useful to a degree, although nothing I haven't seen already on this site. The only section of real interest to me was that which deals with the dividends and how it all works and ties together.

Hey, it's free though, so not complaining .

Yes you are.

[LumbaBread]

.. Yes we do...! The 'sign up' is free too, and we will even post the guide out to you too if preferred (also at no charge).

I got that guide today. Bit of a shame almost 1/3 of it is all about SJD and what they can do for you , testimonials etc. The rest is I suppose useful to a degree, although nothing I haven't seen already on this site. The only section of real interest to me was that which deals with the dividends and how it all works and ties together.

Hey, it's free though, so not complaining .

[Nathan SJD Accountancy]

Nathan is too modest to say but the SJD website has an excellent free (you do have to sign up) beginner's guide.

.. Yes we do...! The 'sign up' is free too, and we will even post the guide out to you too if preferred (also at no charge).

[speling bee]

Nathan is too modest to say but the SJD website has an excellent free (you do have to sign up) beginner's guide.

[Jeremiah@RHJAccountants]

Just to echo what all the other accountants have said you need some professional advice on this matter and this what us accountants are here for.

So call a few up and see what advice you receive.

[captainham]

And you have no less than 3 reputable firms to call from the last 3 posts alone!

[Nathan SJD Accountancy]

Call a few accountants, there's more involved in your questions than a quick answer can provide and you'd benefit from having a full conversation with someone who can cover all the various options (and all the places those questions can digress to).

It'll also give you a chance to compare a few service providers, which is never a bad thing.

I agree completely. I wouldn't know where to start in answering the OP question. There are too many factors to be taken into account and questions that I would have to ask.

To the OP. I think you need to speak to an accountant (give a few a call), because this question can lead you down so many different routes.

[Craig at Nixon Williams]

If you wish to appoint a second shareholder, in order to ensure that your arrangement will stand up to a HMRC challenge then the other shareholder should be a spouse/civil partner whom you live with in order to avoid any CGT implications and to be compliant with S660 (settlements legislation) as tested in the Arctic Systems case in 2007. It is also important that the second shareholder holds shares of the same class, and with the same rights attached as your shares (usually ordinary shares) so not to give the other person a 'right to income'.

This arrangement will only give rise to a tax advantage if the second shareholder’s income falls into a lower marginal band – it is possible to calculate an ‘optimal split’ if both shareholders intend to remain basic rate taxpayers in the year based. The tax thresholds for dividends are exactly the same as they are for any individual – the higher rate is reached with a total income of £42,475 (2012/13 rates); however with dividend income you need to ensure that you ‘gross up’ the dividends received in order to establish which tax band your income falls into – this can be done by dividing the dividend received by 0.9.

It is always worth consulting an accountant on issues such as this – they will be able to provide you with more detailed advice and can do calculations/income illustrations to establish what the most tax efficient strategy would be whilst remaining compliant with all relevant legislation.

I hope this helps!

Craig