new contractor: payment method and VAT

re

Take your cheque to one of those cash checking places along any high street. 10% commission fee beats 65% tax any day. Hope I was of help..

Business Banking

"Most of us mitigate the poor interest rates and high charges of a business account by..."

Speak for yourself.

Cater Allen are the most used bank for contractors.
Free banking (unless you're sad enough to always leave less than £5000 in your account).
Investment account currently pays 3%
Term Deposit account currently pays 5% for a one year lock-down.

BTW: What is a director's personal account? if you're referring to a director's loan account, it is technically illegal to run a director's loan account habitually like this.

A business account is a legal necessity for Ltd Co transactions as far as I know.

Most of us mitigate the poor interest rates and high charges of a business account by using a Directors Personal Account but the money coming into the company must pass through the business account.

This will take around a week or 2 to setup so get your skates on.

I think the maximum turnover before you have to register is £54k, so if you expect to make that much in your first year you have to register. Otherwise, you need to weigh up the admin headache against being able to claim back the VAT on all your software, pens, crates of white Burgundy for the lady who manages the PSL etc.

customs.gov.uk is the place to go diving into leaflets. Plus their call centre is pretty helpful, as call centres go.

also have a look at the flat-rate scheme, which means you can charge VAT at 17.5% but pay it back to Customs at a lower rate. You pocket the difference, the catch being that you aren't allowed to claim back VAT on the software and wine.
Click on the link that shows 2 pound coins dissolving, an apt metaphor for my company at the moment.

tl, did 1st VAT return this year and now an expert

heres the link

Customs and Excise where to register

if your turnover is less than 58k the there may still be a benefit to you with the flat rate VAT scheme.

There have been several threads on this, but simply you can keep about £35 of the VAT for every £1000 you charge.

"money for nothing" as the song goes

MG

I'm new to contracting, so be gentle. I formed a ltd and have entered into a contract with no written contract. I'm about to invoice and I expect to be paid by cheque as opposed to credit transfer. Is there any problems asking for a cheque made payable directly to me or should I be using a company bank account (which I dont currently have)

Also, can some kind soul point me in the direction of information describing the benefits of VAT registration that may help me decide if I need it or not?

many thanks,
sc