A Quick Guide to Going Limited

If you’re a contractor working through your own Limited company your take home will be anywhere between 75% - 80% of your contract value, for example:

  • Daily rate £200 take home between £150 - £160
  • Daily rate £300 take home between £225 - £240
  • Daily rate £400 take home between £300 - £320
  • Daily rate £600 take home between £450 - £480

Also, compared to working through an umbrella company, you’ll save literally thousands due to there being no National Insurance contributions on dividends (this obviously does assumes your contract is outside IR35). To give you an idea; with a typical £350 per day contract you’ll save £12,000, £200 per day and you'll save £9,000 and on £600 a day save £20,000.

When you take into account the huge financial benefits, it’s no surprise that so many contractors are choosing to go limited.

Find below our 30 second guide.

1. Is your contract outside IR35 i.e. compliant or inside IR35?

Call us on 01442 275789 or email newbusiness@sjdaccountancy.com who will help you to understand if you are outside or inside. Even if your contract is inside IR35 it may still be worth going limited, click here to read our simple plain English guide.

2. Form a Limited Company

This will take approximately five minutes and your company will usually be formed in under than four hours.

The cost is £125 plus VAT which is one of the lowest in the market; there are cheaper options but you very rarely get everything you need and often have to purchase extras later on (in the last year SJD has formed over 5,000 limited companies, so as you can see we are a popular choice).

Included in our fee is:

  • Online name company checking
  • Advice on share structures
  • Registration for VAT and PAYE
  • Help with FREE business banking
  • Freephone advice line to help guide you through the whole process

3. Appoint your accountant

This will just take one minute. Once you have appointed your accoutant, they will help you to understand the most tax efficient way to take money from your company and will be happy to answer any of the questions we are sure you’ll have.

SJD offers a complete package including: completion of accounts*, payroll bureau, dividends, corporation tax computations, personal taxation, free bookkeeping software, unlimited access to your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

We are the UK’s largest specialist tax accountants to over 15,000 contractors and freelancers.

4. Closing a company

What happens if I change my mind and decide I don’t want a Limited company any more?

All you have to do to be removed from the register of companies at Companies House is complete a form. Plus you’ll more than likely have end of year accounts to submit – your tax expert will help you with all of this.

If you have any questions about contracting or would like any further advice please call our New Business Team on 01442 275789 or email newbusiness@sjdaccountancy.com

Other useful pages, guides and case studies include: