While setting up a Limited Company tends to involve more costs and admin than operating as a Sole Trader or under an Umbrella agreement, it also offers a wealth of benefits. Among them are greater tax efficiency, less personal liability and more control over your contracting business and personal finances.
If you’re certain that your skills are in demand and are confident that you can charge your desired day rate for your services, here’s what you need to do to set up your new business:
Choose a company name
Here’s the fun part – what do you want to call your company? This is completely down to personal preference; would you rather an abstract name, or an informative one that lets prospects know exactly what you do? Our top tips would be to research online for inspiration, brainstorm ideas and test a few of your favourites on friends and family. Before you get your heart set on anything, check with Companies House that your preferred name is available.
Incorporate your company
If you’re going it alone, you’ll be responsible for ‘incorporating’ your company, which essentially means registering with Companies House. Along with your company’s name and address, you’ll need:
- Details of the appointed directors, who’ll control the business (this is likely to be you but may also include a partner/spouse).
- Details of the company’s shares – for instance, you may have decided on shared ownership with a partner/spouse. If so, they’ll need to agree to forming the company and the written rules, called the ‘memorandum and articles of association.’
- To check what your SIC code is, which identifies the nature of your business.
- To establish a company bank account, register for VAT and set up a payroll scheme.
Pulling together all the required information can be slightly daunting; also, how you set up your company can affect how tax efficient you are further down the line. This is why you should consider seeking advice from a professional at Intouch, who will also help to ensure that you’re clued up about IR35 tax legislation. Do this and you’ll also have much more time available to channel into the next, important task…
Getting your name out there
With your company created, it’s time to shout about it from the rooftops and get your name out there. Take time to research different marketing and promotional tactics; how are you going to show prospects what you have to offer and encourage them to choose YOU to satisfy their next contract?
At Intouch Accounting our Personal Accountants get your new company all set up for free, and work with you to help you make the right business decisions and work in the most tax efficient way. We know that taking the first steps into contracting is a big decision, so we’re happy to chat through your questions even if you’re not ready to get going just yet. Get in touch with one of our expert team members today to find out more.
This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.