Q & A: Limited Companies
By Walker Smith’s Junior Account Manager, Rachel Whittle and Senior Marketing Executive, Caroline Martell.
What does having a Limited company mean?
Having a Limited company means that you would become the Director of your own business. This gives you the opportunity to build your own brand, take control of your finances as a contractor and create a legal separation between your work and personal affairs, which can make it easier to manage your finances and provides you with protection in difficult situations, like receiving claims against your business.
What are the advantages of having a Limited company?
This is perfect for individuals wanting to develop their contracting career whilst retaining flexibility and control when it comes to the hours they work, the amount they can earn, where they are based and who they choose to work with. Having your own company comes with many benefits, such as being able to:
- Increase your net take home pay via dividend payments
- Claim back a wider range of business expenses
- Access the Flat Rate Vat Scheme
- Have the chance to develop your very own brand
- Build and grow a business
- Separate your personal finances from your work finances
- Retain up to 85% of your gross earnings.
How do I set up a Limited company and how long does it take?
Once you have decided on a company name, Walker Smith will register the company for you with Companies House. It takes 24 hours for your application to be accepted, at which point we will send you your Certificate of Incorporation. Once you have your certificate, we will then assist with opening up a business bank account via partners such as Santander and Barclays who can put you into their ‘fast track system’
What information do I need to set up a Limited Company?
We will send you our registration form to fill in all of your personal details. You’ll just need to have a think of a unique name for your company.
Can I trade immediately?
Once you have your company is registered and your business bank account is open, you are able to trade at this point. If you have decided to register for VAT then this will take around 2-3 weeks for the certificate to come through. We would also recommend taking out some Company insurance and can introduce you to Kingsbridge, our insurance partners.
How do I get paid?
You will send either a timesheet or an invoice to your agency/client. They will pay the gross funds into your business bank account. You’ll also upload your expenses onto your FreeAgent portal either online or via the mobile app.
From there, we will advise you how much you can safely withdraw from the company and how much you need to keep in the business bank account to cover your liabilities.
As the Director, you become an employee of the company, and you are also the shareholder so you can pay yourself in the following way; a director’s salary, dividends (profits of the company) and reimbursed business expenses.
What is required to maintain a limited company?
With a limited company comes certain responsibility such as:
- Registration for taxes
- Payroll and RTI Processing
- Quarterly VAT preparation and submission
- Prepare and file P11d & P11d(b)
- Prepare and file Corporation Tax return (CT600)
- Prepare and file Annual Return (AR01)
- Prepare & file your limited company accounts;
- Keeping track of expenses
- IR35 Contract Reviews
- Self Assessment Tax return
All of this can be difficult to keep on top of, which is why we provide you with a mobile app as well as your own dedicated accountant to make sure your company finances are kept on track.
What else can you do for me when I have a limited company?
Our packages are designed to take the stress, hassle and any admin work away from you. If you have any questions at all, please let us know as we will be able to answer any queries and provide support on not only the accounting side, but the legislative and contractual considerations for your company.
If you have a question which is not listed please do not hesitate to contact us on 0161 359 3235.