Best time to set up Ltd company

[ceebeepps]

Setting up the ltd co was quick for me, I actually did it 3 months before I left my perm job, and it was a good incentive for me not to fallback on the easy option of staying in perm (I'd still have paperwork to do!). I set up my bank account as soon as i left perm. My biggest learning curve was not applying for my vat reg until I had a contract, it took weeks to come through and the agency wouldn't accept invoices with a line of "in lieu of vat" (as per advice from hmrc and accountant) so I ended up having to bill the agency a vat only invoice covering several invoices weeks later, which eventually got paid the week before my vat payment was due. I found it pretty stressful, and could have definitely done without the hmrc hold music for hours on end, so if I were to do it again, Id set up the company and register for vat asap, bank account next asap. Unless of course you aren't really sure if you are committed to contracting...

[dkennedy1001]

Thanks everyone, lots of feedback i'll take on board

[TykeMerc]

Yeah the bank bit took weeks of chasing in my experience. Plus you need a registered company first, though that bit pretty much happens overnight.

My Cater Allen account was up and running in a matter of a day or two, I don't remember it being tricky at all, but that said I opened my current MyCo Ltd in 2009 so things may have changed.

I'd say open your company when you're confident you have a contract or when you've at least committed to getting your first one.

[PerfectStorm]

Yeah the bank bit took weeks of chasing in my experience. Plus you need a registered company first, though that bit pretty much happens overnight.

[SueEllen]

Main benefit is if you join a bank that takes weeks to open a business account then it should still be open in sufficient time to allow you to invoice an agency in a month.

[dkennedy1001]

Why do people think there's a best time to set up a limited?

Because they have zero experience of contracting or limited companies maybe...

[BolshieBastard]

Hi,

I am going to go contracting for the first time and wondered should i set up my Ltd company as close I can to the contract start date or if I do it a few weeks before does it matter for any particular reason I haven't thought about?

I know the sooner I do means I can get a vat number which would help with claiming that on my first invoice but any other benefits/issues?

Thanks

Why do people think there's a best time to set up a limited? It just needs to exist in time to be put on the contract before its issued.

You can extend the accounting period once in the life of a limited so even if you set it up and dont start trading for 3 months, you can still change the year end so it cover 12 months of active trading.

[dkennedy1001]

Thanks everyone, I'll go about putting everything in place asap. I think I was concerned that running a business without doing anything for a month may be less tax efficient or something so I should wait till the last moment.

Obviously not, must start reading more of the guides on here now.

Cheers

[TheCoconutDog]

I seem to remember that they'll do the first month into personal ?

You might be right - but wasn't there a thread on here recently with a tale of woe about not being able to get paid gross and having to get paid PAYE?

Why bother with the hassle when you can put things in place at a relaxed pace?

[PerfectStorm]

What about getting bank accounts opened ready to accept funds? Agencies won't just hand over money into any old account.

I seem to remember that they'll do the first month into personal ?

[NotAllThere]

Get it done in advance, while you've still got plenty of time on your hands.

[TheCoconutDog]

What about getting bank accounts opened ready to accept funds? Agencies won't just hand over money into any old account.

[dkennedy1001]

Hi,

I am going to go contracting for the first time and wondered should i set up my Ltd company as close I can to the contract start date or if I do it a few weeks before does it matter for any particular reason I haven't thought about?

I know the sooner I do means I can get a vat number which would help with claiming that on my first invoice but any other benefits/issues?

Thanks