Why set up a limited company

What you need to consider when setting up a limited company

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Setting up a limited company

A limited company is a separate legal entity and while operated by the shareholders and directors, it has its own income and expenditure, can enter into its own contracts and will pay its own taxes, completely separate from any owner.

A director and shareholder is responsible for the day to day operations, compliance and ensuring accounts and tax returns are completed and submitted on time.

There are minimum requirements that must be followed when you operate a limited company and this should be considered before you contemplate choosing this route as a way of contracting.

What are the requirements

Bank account

A limited company does require it’s own bank account to receive income and pay expenses. It is important to note that the bank account must not be used for personal expenditure by the directors.

Declared salary

All payments to the director and shareholders must be declared, usually as salary or dividends and these payments could potentially be taxed on top of what tax the company pays.

Compliance

As a minimum, accounts and tax returns must be produced and submitted. However, depending on how the company is set up, it may also need to calculate and submit VAT and PAYE returns on a regular basis.

What are the advantages

Limited liability status

Since a limited company is its own legal entity, this provides a level of protection against any wrong doing by the company to the directors and shareholders, assuming all rules have been followed.

Tax savings

You can typically choose how you want to take money out of the company and make use of the most tax efficient method based on your circumstances’

Perception

In recent times, operating under a limited company does provide reassurance with your customers that you are a professional and compliant business. In fact in some sectors, it is mandatory to operate a limited company.

How to become a limited company contractor

How can JSA help with your limited company

Expert & Professional

We’ve been providing professional, expert accountancy services for 30 years.

Compliance Credentials

We ensure our services our fully compliant so you don’t need to worry.

Dedicated Accountant

Your own expert and experienced accountant, providing unlimited advice.

Comprehensive Service

Fully comprehensive service providing all your accounting needs.

Free Accounting Software

Market leading, MTD-approved online software and mobile app from Freeagent.

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We provide a bespoke accounting service to you and ensure you are expertly taken care of.

Unlimited Service

Unlimited support to ensure you get the best possible advice from your accountant

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Accredited with the FCSA and IPSE to ensure our standards are second-to-none.

Our monthly service includes everything you need

Fixed fees of ÂŁ120 + VAT per month

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Your own expert dedicated accountant

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Clear tax efficient advice and health checks

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MTD compliant VAT returns

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Year end accounts submitted

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Self Assessment tax return

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Expert IR35 advice and contract reviews

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Bookkeeping software provided by Freeagent

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Payroll processing for 1 director

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