Limited Company Formation
Discussion
Have just googled the above.
Rather than find helpful information about such matters one gets bombarded with instant set up only £29.99 limited company ads etc.
Has anyone tried one? Is there any advantage to sitting down face to face with an accountant over these sorts?
I have a scenario where I will be billing internationally if this makes a difference in the actual formation of the limited.
Any sage advice?
Rather than find helpful information about such matters one gets bombarded with instant set up only £29.99 limited company ads etc.
Has anyone tried one? Is there any advantage to sitting down face to face with an accountant over these sorts?
I have a scenario where I will be billing internationally if this makes a difference in the actual formation of the limited.
Any sage advice?
I've done it 3 times, used an off-the-shelf package for the last two, they're so cheap now it's not worth the hassle of doing it yourself, IMHO. Accounting is seperate issue from setting up co., you must have accounts ready for end of first year, you can extend this by a further 6 months if you apply in good time (1 simple form). A "short" form of accounts is allowed if turnover under a certain amount (might be 300k???) but you must still use real accountant. I've never sold abroad but if I did I would speak to accountant before I got in too deep about best way to set it up - start a co. abroad to handle foriegn currency? or seperate uk account? or how/when to show currency conversion in books?
Just some thoughts, hope this helps.
Just some thoughts, hope this helps.
Setting up a limited company is the easy part. Maintaining it and meeting all the relevant deadlines is where all the hassle starts.
Once the company is set up, the following areas need to be looked at:
It is almost certain that the company will need to register with the Inland Reveneue for PAYE purposes. Even if the company has no employees, it will need to remunerate the directors.
The company may need to register for VAT. If the turnover exceeds £600,000 it is compulsory to register for VAT. Under that threshold, registration is voluntary.
Companies with turnovers under £5.6 million are no longer required to have their annual accounts formally audited - although they can be if the shareholders so wish.
Despite the fact that audits are not required, the company accounts MUST still be prepared in accordance with the strict requirements of the Companies Act. It is not compulsory that they be prepared by "qualified" accountants but I have yet to see a set of accounts for a limited company which have been prepared by a non-qualified accountant that actually complied with Companies Act requirements. Incorrectly prepared accounts will be rejected by Companies House.
Companies have a host of deadline dates they need to be aware of. Accounts must be filed at Companies House within 10 months of the end of the financial year. Corporation Tax liabilities must be paid with 9 months of the end of the financial year. A Corporation Tax return and the annual accounts must be filed with the Inland Revenue within 12 months of the end of the financial year. In addition to these will be the normal deadlines associated with PAYE and VAT - if appropriate.
An accountant is not necessary at the formation stage of the company, but I would certainly ensure you get an accountant on board very soon after the company is set up.
Once the company is set up, the following areas need to be looked at:
It is almost certain that the company will need to register with the Inland Reveneue for PAYE purposes. Even if the company has no employees, it will need to remunerate the directors.
The company may need to register for VAT. If the turnover exceeds £600,000 it is compulsory to register for VAT. Under that threshold, registration is voluntary.
Companies with turnovers under £5.6 million are no longer required to have their annual accounts formally audited - although they can be if the shareholders so wish.
Despite the fact that audits are not required, the company accounts MUST still be prepared in accordance with the strict requirements of the Companies Act. It is not compulsory that they be prepared by "qualified" accountants but I have yet to see a set of accounts for a limited company which have been prepared by a non-qualified accountant that actually complied with Companies Act requirements. Incorrectly prepared accounts will be rejected by Companies House.
Companies have a host of deadline dates they need to be aware of. Accounts must be filed at Companies House within 10 months of the end of the financial year. Corporation Tax liabilities must be paid with 9 months of the end of the financial year. A Corporation Tax return and the annual accounts must be filed with the Inland Revenue within 12 months of the end of the financial year. In addition to these will be the normal deadlines associated with PAYE and VAT - if appropriate.
An accountant is not necessary at the formation stage of the company, but I would certainly ensure you get an accountant on board very soon after the company is set up.
Thanks Eric.
So there are no detail based devils at the formation stage that could trip me up?
Its for an IT solutions business if that has any bearing.
Also is there any real advantage in setting up offshore as my main client is Oz based?
>> Edited by Plotloss on Saturday 11th June 15:40
So there are no detail based devils at the formation stage that could trip me up?
Its for an IT solutions business if that has any bearing.
Also is there any real advantage in setting up offshore as my main client is Oz based?
>> Edited by Plotloss on Saturday 11th June 15:40
Eric Mc said:
The company may need to register for VAT. If the turnover exceeds £600,000 it is compulsory to register for VAT. Under that threshold, registration is voluntary.
Hate to be pedantic Eric as your posts are always top drawer info, but I believe you were a little trigger happy with the zero button. The VAT threshold is £60,000.
The biggest problem with ltd. company formation is choosing a name which is not taken, and has a suitable URL available.
Other than that, off the shelf is cheap and easy, and you just rename the company to your choice, amend the articles (if required), and off you go. The rest is up to statutory reporting (as Eric says).
Other than that, off the shelf is cheap and easy, and you just rename the company to your choice, amend the articles (if required), and off you go. The rest is up to statutory reporting (as Eric says).
Sorry about the aditional Zero. The VAT reg' threshold, as groomi pointed out, is £60,000.
What is the point of setting up a company "offshore"? Don't forget, an "offshore" company would not be a company registered at the UK's Companies House. It would be a company set up in the offshore country/territory and subject to the rules and regulation of that country/territory. Also, buying a cheap "off the shelf" company of this type is probably not an option.
If the company was succesfully set up offshore and somehow escaped UK tax on its profits, you still have the problem of getting money out of the company and into your own personal hands. You will still be a UK resident and you will still be liable to UK tax on whatever income yoy "draw" from the company - whether by means of dividends or salary.
Finally, you should be aware that setting up any scheme with a main objective of reducing tax liabilities constitutes "tax avoidance". This is all perfectly legal, of course, but recent legislation means that all tax avoidance schemes have to be approved IN ADVANCE by the Inland Revenue.
>> Edited by Eric Mc on Saturday 11th June 18:17
What is the point of setting up a company "offshore"? Don't forget, an "offshore" company would not be a company registered at the UK's Companies House. It would be a company set up in the offshore country/territory and subject to the rules and regulation of that country/territory. Also, buying a cheap "off the shelf" company of this type is probably not an option.
If the company was succesfully set up offshore and somehow escaped UK tax on its profits, you still have the problem of getting money out of the company and into your own personal hands. You will still be a UK resident and you will still be liable to UK tax on whatever income yoy "draw" from the company - whether by means of dividends or salary.
Finally, you should be aware that setting up any scheme with a main objective of reducing tax liabilities constitutes "tax avoidance". This is all perfectly legal, of course, but recent legislation means that all tax avoidance schemes have to be approved IN ADVANCE by the Inland Revenue.
>> Edited by Eric Mc on Saturday 11th June 18:17
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