Running your own Limited Company is actually very straightforward.
Step 1: 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 plus VAT. To form a company click Company Formation. We will also help you with VAT registration and setting up a business bank account.
Step 2: 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.
Step 3: Forward any correspondence you get from HMRC or Companies House to your accountant and they 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.
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 resource pages: Take home pay: limited company or umbrella company – The Real Story, ‘How much can I earn as a contractor?‘ or try our online Limited Company Business Calculator.
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 advice. Just forward a copy of your contract to your accountant and they can advise. Click the following link to read our plain English Guide to IR35.
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 be 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 . For more information 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 provider of Accountancy Services to Contractors, Freelancers and SME’s.
- Experienced, specialist providers to 15,000 contractors, freelancers and small to medium sized businesses.
- Outstanding customer service since 1992.
- The British Accountancy Awards ‘Accountant of the Year’ winners in 2011, finalists in 2013 and highly commended in 2012. Shortlisted for the ‘National Firm of the Year’ award in 2017.
- Ten time winners of the ‘Best Contractor Accountant’ award voted for by visitors to Contractor UK 2007 to 2016.
- More qualified staff than any other specialist firm with qualifications covering: ATT, AAT, CTA, ACCA, CA, ACA and FCCA.
- Offices across the UK.
- Deemed IPSE Accredited Accountants and fully MSC compliant.
- Recognised authority on IR35.
6. How much do you charge?
The fee for our services start from £120 plus VAT per month, there is no minimum length of time you need to appoint us and there are no entry or exit fees. Check our packages for more detail.
If you have any questions about contracting or would like any further advice please fill in our request a callback form below.