How to Contract through your own Limited Company
Running your own Limited Company is actually very straightforward.
The first thing you'll need to do is form a Limited Company. This will take 5 minutes and your company should be set up within two hours. The cost of formation is £125 VAT. To form a company click Company formation. We will also help you with VAT registration and setting up a business bank account.
Invoice your client/agency (we provide you with a template). Complete a very simple Excel spreadsheet, similar to an expense claim form which should take about 15 - 20 minutes per month to complete.
Forward any correspondence you get from the Revenue or Companies House to your account manager at SJD and we will take care of it for you.
We guarantee that there is no more effective way of working than contracting through your own Limited company.
Frequently Asked Questions
1. How much will I take home?
Typically, contractors working through their own limited company take home between 75% and 80% of their contract value. For more details read our NEW page 'How much can I earn as a contractor?' or try our online Limited Company Business Calculator.
Also visit SJD's case study section under the Information heading to read more about take home pay examples.
2. Am I caught by IR35?
The only way to be sure whether your contract falls inside or outside IR35 is to have it reviewed by a specialist. SJD are one of only 3 firms in the UK who advise the Professional Contractors Group on IR35 and so are well qualified to give you the correct advise. Just forward a copy of your contract to your Account Manager and they can advise. To read our plain English guide to IR35 click here.
3. I’m inside IR35, should I still use my own Company?
Even if your contract is inside IR35 you can still claim travelling and accommodation expenses, 5% of your turnover, get the benefit of VAT flat rate (saving around £2000 a year), and get the interest on the funds held within your own Company, so yes, from a financial point of view it could still definitely worth it.
4. What expenses can I claim?
If you are outside IR35, you can claim back anything that is "wholly and exclusively" incurred to carry out the day to day running of your business. This includes insurance, accountancy fees, travel and accommodation expenses, motor expenses, computer hardware and software, telephone, stationery, training etc etc, click here to read SJD's full Guide to Expenses.
5. Why should I choose SJD to be my Company's accountants?
SJD Accountancy is the UK's largest specialist providers of Accountancy Services to Contractors, Freelancers and SME’s.
Our credentials:
- The most recommended accountancy firm on the Internet;
- The chosen accountancy firm to over 8,500 Ltd companies (SJD Accountancy have been providing Accountancy services for over 15 years);
- Winner of the www.contractoruk.com ‘Best IT Contractor Accountant’ award for the last two years;
- Recommended by the Sunday Times;
- Winners of the Accountancy Age Awards for Excellence, in 2007 and 2004, finalists in 2006, 2005 and 2003;
- We have a two star 'Outstanding' accreditation from the organisation behind The Sunday Times Best Companies awards.
6. How much do you charge?
The fee for our services are £95 plus VAT per month. There's no minimum length of time you need to appoint us and there are no entry or exit fees.
If you have any queries or would like further advice please don't hesitate to contact us on 0500 152 500 / 01442 232700, email info@sjdaccountancy.com or download our FREE guide to contracting: Contractors Guide to going Limited.
You may also find the following pages, guides and case studies useful:
Take home pay calculator - How much could you be taking home
First time Contracting or Freelancing? - A summary of the alternatives along with pros and cons
Step-by-step Guide to Contracting - Download a FREE copy of our guide
Limited or Umbrella? Can't decide? - We help you decide which is best for you
Take home pay case studies - Examples of contractors using a ltd co. & umbrella co.
Expenses Guide - Know exactly what you can claim
Umbrella company guide - Everything you ever wanted to know about umbrella company services
IR35 Guide - A great plain English guide to IR35
SJD Accountancy is the UK's largest specialist provider of fixed fee, limited company accountancy services to contractors and freelancers. It is the only national specialist firm of accountants with offices in all major cities, and is the chosen accountancy firm for more than 8,500 clients. It is also the only national accountancy firm in the UK to be accredited as a Quality Accountant (QA) by the Professional Contractors Group (PCG).
SJD Accountancy has been acting for contractors and small businesses since 1992 and is the most recommended accountancy firm on the Internet. It has more qualified staff than any other specialist firm, with qualifications covering the following major Tax and Accountancy bodies, including ATII, ATT, ACCA, CA, ACA, FCCA, ACMA.
SJD Accountancy offers a complete package including completion of accounts, payroll bureau, dividends, corporation tax computations, personal taxation and all company returns.
On top of all that, SJD have also won every relevant industry award possible, including:
- 'Small Firm of the Year' - Winner Accountancy Age 2007
- '100 Best Companies to Work For' Award - Sunday Times 2008 & 2007
- 'AXA Business of the Year' - Finalists National Business Awards 2007
- 'Best Contractor Accountant' - ContractorUK 2007 and 2006
- 'Outstanding Two Star Status' - Best Companies Accreditation 2007 and 2008
- 'Accountancy Age Award for Excellence' Winner 2004
- Winners of the "Sunday Times Best Small Companies to Work For in the UK" Award, achieving the highest position ever for a firm of accountants.
And most importantly, in a recent survey 98% of our clients rated SJD as 'better than other accountants' - we are working hard to convince the other 2%!
