Starting your own company

[SlipperyP]

8 hours ago, SlipperyP said:

https://www.gov.uk/set-up-self-employed

Easy stuff.

 

[Ro Sham Bo]

1 hour ago, Cardinal Richelieu said:

Cheers for the advice guys. The only reason I don't want to set up a company is cos of the time / expense, but from what you guys have said, it doesn't sound too difficult. 

It's all moot anyway, cos I've just logged in this morning to be informed that I managed to delete every file from their Sharepoint folder, so my jacket is already on the shoogliest of pegs. 

The actual set up doesn't take much time and can be done cheaply if you are happy enough to set it up yourself.

https://www.gov.uk/set-up-limited-company

Once set up you do need to speak to an accountant though to ensure you're operating it in the most tax efficient manner. 

Depending on the nature of your working relationship with your customer, the other thing to be aware of is the new IR35 regulations which come into force next month, although the company you're working for should be keeping you right with this.

[strichener]

12 hours ago, strichener said:

You will also need liability insurance in case you f**k up and get sued.

Best to speak to an accountant lawyer.

 

2 hours ago, Cardinal Richelieu said:

Cheers for the advice guys. The only reason I don't want to set up a company is cos of the time / expense, but from what you guys have said, it doesn't sound too difficult. 

It's all moot anyway, cos I've just logged in this morning to be informed that I managed to delete every file from their Sharepoint folder, so my jacket is already on the shoogliest of pegs. 

I have updated my advice for you.

[Shtuggie]

14 hours ago, Cardinal Richelieu said:

I recently quit my job and started freelancing (doing semi-geeky shit). The company that is currently using my services made it clear they'd prefer dealing with a company rather than an individual. So I guess I need to set up a company. But what is the best way of doing it? I'm not really a company - just an individual. So I don't think I need to set up a limited company or anything, but I'm a bit clueless about what I should do. Obviously I could Google it, but I prefer my search results to be peppered with sardonic advice on keeping my heaters on / windows down. Anyone got any advice?

And what should I call it? Simply my name? I quite like the sound of The Richie Group, but that's a bit of a grandiose name for a no-mark like me. 
Have any other P+Bers set up their own company etc? Is there even a difference between a company and a business?

Happy to advise on this but there are a few things I would need to know advance:

 

Is the work you are doing classed as outside or inside the IR35 regulations? (If the company is small enough this won't matter)

Where does the money for what you do currently go?

Will you earn enough (77k in a year) to have to register your company for VAT? 

It sounds like they want you to set up a ltd company which is fair enough. Its easily done and can either be done through a local accountant or through one of the larger accountancy/umbrella firms. 

 

[GordonS]

12 hours ago, invergowrie arab said:

Turnover is less than 1000 a year... I spend all the money on whisky. 

If your turnover is more than that i don't recommend this approach 

I would strongly endorse this position.

[Cardinal Richelieu]

8 minutes ago, Shtuggie said:

Happy to advise on this but there are a few things I would need to know advance:

 

Is the work you are doing classed as outside or inside the IR35 regulations? (If the company is small enough this won't matter)

Where does the money for what you do currently go?

Will you earn enough (77k in a year) to have to register your company for VAT? 

It sounds like they want you to set up a ltd company which is fair enough. Its easily done and can either be done through a local accountant or through one of the larger accountancy/umbrella firms. 

 

Cheers Shtuggie. I've just been reading about the IR35 regulations and the company I'm working for is too small. 

Quote

Where does the money for what you do currently go?

Not quite sure what you mean, but it's my only source of income so it'll go on the usual stuff like bills and beer. I'm very unlikely to earn £77k in a year so I don't need to register for VAT. 

The only bit I'm not sure about is whether it's better to register as a sole trader or a limited company. Sole trader definitely sounds like the simpler option. I'll go back to my "boss" and ask, although they're based in Poland so it's possible he won't know. 

Edited March 22, 2021 by Cardinal Richelieu

[Melanius Mullarkey]

12 hours ago, invergowrie arab said:

All I did was set up a business bank account in name of my company and got invoices to be paid into that account.

Turnover is less than 1000 a year as it is just a hobby I do every month or so.

I spend all the money on whisky. 

If your turnover is more than that i don't recommend this approach 

Prozzy IMO

[Thistle_do_nicely]

10 minutes ago, Cardinal Richelieu said:

Cheers Shtuggie. I've just been reading about the IR35 regulations and the company I'm working for is too small. 

Not quite sure what you mean, but it's my only source of income so it'll go on the usual stuff like bills and beer. I'm very unlikely to earn £77k in a year so I don't need to register for VAT. 

The only bit I'm not sure about is whether it's better to register as a sole trader or a limited company. Sole trader definitely sounds like the simpler option. I'll go back to my "boss" and ask, although they're based in Poland so it's possible he won't know. 

Jumping in a bit, but i think the question about where your money goes is driving at allowable/disallowable expenses, would look into that a bit.

[Sergeant Wilson]

2 hours ago, Cardinal Richelieu said:

Cheers for the advice guys. The only reason I don't want to set up a company is cos of the time / expense, but from what you guys have said, it doesn't sound too difficult. 

It's all moot anyway, cos I've just logged in this morning to be informed that I managed to delete every file from their Sharepoint folder, so my jacket is already on the shoogliest of pegs. 

You're worth your weight in gold normally though eh?

[gc_smfc]

Set up the company yourself on companies House, think it was around £35 for the process compared to an accountant charging over £100. Worth doing as the liability ends with you being company director and doesn't pass onto you personally. Also umbrella companies are a total con. 

 

You could use something like quick books to run your payroll from the Ltd company, but it's worth speaking to an accountant who can maybe get you a deal on a license for one of them. They'll also tell you how to make yourself tax efficient and give you a rough idea of how much your company books and if needed self assessment will cost. 

 

You'll get lots of different 'advice' from different people with regards to what they claim off the company. And with accountants not being liable for their advice it can be quite murky but just be sensible and keep a record of every invoice and potential work expense.

 

IR35 is another thing to look out for. I reckon I'm alright because I'm always fixed term and work for different companies throughout the year but through the same agent. 

[Shtuggie]

27 minutes ago, Cardinal Richelieu said:

Cheers Shtuggie. I've just been reading about the IR35 regulations and the company I'm working for is too small. 

Not quite sure what you mean, but it's my only source of income so it'll go on the usual stuff like bills and beer. I'm very unlikely to earn £77k in a year so I don't need to register for VAT. 

The only bit I'm not sure about is whether it's better to register as a sole trader or a limited company. Sole trader definitely sounds like the simpler option. I'll go back to my "boss" and ask, although they're based in Poland so it's possible he won't know. 

OK good news on the IR35 front.

 

You can ask about working as a sole trader but its incredibly risky for a company to engage sole traders v ltd company contractors so they may say no. You said its kind of geeky what you do - is it something in IT? 

 

On where your money goes - I meant  more on whether it was a business bank account or personal bank account. I could then make suggestions about expenses and also explain that VAT registration may be beneficial even if you don't go above threshold to mean you have to be VAT registered.

Edited March 22, 2021 by Shtuggie

[Cardinal Richelieu]

5 minutes ago, Shtuggie said:

OK good news on the IR35 front.

 

You can ask about working as a sole trader but its incredibly risky for a company to engage sole traders v ltd company contractors so they may say no. You said its kind of geeky what you do - is it something in IT? 

 

On where your money goes - I meant  more on whether it was a business bank account or personal bank account. I could then make suggestions about expenses and also explain that VAT registration may be beneficial even if you don't go above threshold to mean you have to be VAT registered.

Why is it risky for the company to engage with a sole trader?

I do technical authoring and eLearning type work. So my expenses are pretty much zero (except for heating and lighting). I don't have a business bank account - I understand there are usually fees involved. I'll get one if I need to, but only if it's necessary. 

13 minutes ago, gc_smfc said:

Set up the company yourself on companies House, think it was around £35 for the process compared to an accountant charging over £100. Worth doing as the liability ends with you being company director and doesn't pass onto you personally. Also umbrella companies are a total con. 

Does this really apply to me though? There is no danger of going out of business / running up debts because I don't have any debt / expenses. I'm literally just doing work for a company but I'm not a direct employee. 

[Aubrey Maturin]

8 minutes ago, Cardinal Richelieu said:

Why is it risky for the company to engage with a sole trader?

I do technical authoring and eLearning type work. So my expenses are pretty much zero (except for heating and lighting). I don't have a business bank account - I understand there are usually fees involved. I'll get one if I need to, but only if it's necessary. 

Does this really apply to me though? There is no danger of going out of business / running up debts because I don't have any debt / expenses. I'm literally just doing work for a company but I'm not a direct employee. 

I'm still waiting on you updating my CV.

[gc_smfc]

13 minutes ago, Cardinal Richelieu said:

Why is it risky for the company to engage with a sole trader?

I do technical authoring and eLearning type work. So my expenses are pretty much zero (except for heating and lighting). I don't have a business bank account - I understand there are usually fees involved. I'll get one if I need to, but only if it's necessary. 

Does this really apply to me though? There is no danger of going out of business / running up debts because I don't have any debt / expenses. I'm literally just doing work for a company but I'm not a direct employee. 

The benefit is more leaning towards the company you are working for. Its a clear business relationship rather than looking like an employee without their needed benefits. But it means that if you mess something up, it'll end at company level rather than you being personally being liable. 

Professionally I wouldn't be able to get any work without the use of my Ltd company other than in Norway were I'd have to go into an umbrella for their tax. 

 

 

[Shtuggie]

1 hour ago, Cardinal Richelieu said:

Why is it risky for the company to engage with a sole trader?

I do technical authoring and eLearning type work. So my expenses are pretty much zero (except for heating and lighting). I don't have a business bank account - I understand there are usually fees involved. I'll get one if I need to, but only if it's necessary. 

 

Many reasons. If they are currently paying you an agreed hourly/daily rate straight into a personal bank account, they could be liable for unpaid tax. Also insurance - very unlikely but if you bring down an entire server or break something whilst on-site - you are not covered under their company insurance policy.

 

They are getting all the benefit of an employee without having to pay employers national insurance or pay for your holidays/trips to the dentist. Have you negotiated for more money than you would have been on perm? Are you working full time hours? 

 Sounds like you could maybe work through an umbrella if you really can't be arsed starting a company. They will charge for the service but make sure you pay all the right taxes etc. 

Edited March 22, 2021 by Shtuggie

[Cardinal Richelieu]

11 minutes ago, Shtuggie said:

Many reasons. If they are currently paying you an agreed hourly/daily rate straight into a personal bank account, they could be liable for unpaid tax. Also insurance - very unlikely but if you bring down an entire server or break something whilst on-site - you are not covered under their company insurance policy.

 

They are getting all the benefit of an employee without having to pay employers national insurance or pay for your holidays/trips to the dentist. Have you negotiated for more money than you would have been on perm? Are you working full time hours? 

 Sounds like you could maybe work through an umbrella if you really can't be arsed starting a company. They will charge for the service but make sure you pay all the right taxes etc. 

Gotcha. I'll ask the question. Given that I've already cocked up massively, I think it's likely that they'll want me to go down the limited company route!

And yes - the hourly rate is about 50-100% higher than it would be if I worked for them directly so at least it means I can afford to pay someone to ensure that all this shit is done correctly. 

[Sherrif John Bunnell]

I hate Sharepoint. My workplace spent a fortune setting it up a few years ago, with orders for us to save everything on there. We all quickly learned to keep local copies of any files that we didn't want to be deleted or edited by some department that should be nowhere near any of our stuff.

[DA Baracus]

Can't you just upload the files to Sharepoint again?

[madwullie]

Just fire me over your long card number, expiry date, mother's maiden name, 3 digit csv code, and your dob and I can set this all up for you np. You won't have to lift a finger  

[Guest Peter LaFleur]

I went to an accountant who specialises with limited company contractors. They assisted with the company start up and then I just had to go to a bank to create a business account under my new business name. Please beware that this step for me took around 2 months so I was without a wage until RBS pulled their finger out. 
You can also look at working PAYE under an umbrella company. You will receive slightly less money but don’t have the stress of being a limited company.

I don’t use this company but Champion contractors have a take home calculator based on both in relation to your hourly rate.

Edited March 22, 2021 by Peter LaFleur