Business bank accounts
- Thread starter vickster
- Start date
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phil_hg_uk
I am not a member, I am a free man !!!!!!
Fair enough but you know you dont have to register until you do go over the threshold, thats what I did.
OP
OP
vickster
Squire
Yes, I understood that to be so
At the moment, I'm on a contract, PAYE, which ends in August. After that, I intend to freelance/consult for different companies. Just getting my ducks in a row at the mo so I'm ready to go
phil_hg_uk
I am not a member, I am a free man !!!!!!
Yes, I understood that to be so
At the moment, I'm on a contract, PAYE, which ends in August. After that, I intend to freelance/consult for different companies. Just getting my ducks in a row at the mo so I'm ready to go
If you are just billing out labor then I wouldn't be in a hurry to go the VAT route as all it will do is make your hourly rate more expensive, I understand that probably the companies you deal with will be VAT registered but still something to be aware of anyway. The only reason I went the VAT route was because I was selling computers so I can claim the VAT back on the hardware plus I was selling a lot of PC's back then so you can go over the limit quickly, but I am mostly doing repairs/ upgrades these days so I am reviewing the need to be registered at all.
- Location
- Somewhere wet & hilly in NW England.
[QUOTE 4240433, member: 9609"]is that loop hole still open?
we were a limited company for many years and I always thought that was a bit unfair, entirely legal and in our case all set up by the accountants, but a little unfair all the same. think we paid ourselves about 650 a month each and then took dividends twice a year. the gov paid for our NI stamp!
depends on what you do, we had potential massive liabilities, could have easily been wiped out by others going to the wall. least being ltd means you don't loose your home.[/QUOTE]
Yes, just trip over the Lower Earnings Limit for salary and the rest in dividends as you say. Full credit for zero outlay.
The saving is obviously bitten into from this year with the double whammy on dividend above the £5k pa tax free allowance.
we were a limited company for many years and I always thought that was a bit unfair, entirely legal and in our case all set up by the accountants, but a little unfair all the same. think we paid ourselves about 650 a month each and then took dividends twice a year. the gov paid for our NI stamp!
depends on what you do, we had potential massive liabilities, could have easily been wiped out by others going to the wall. least being ltd means you don't loose your home.[/QUOTE]
Yes, just trip over the Lower Earnings Limit for salary and the rest in dividends as you say. Full credit for zero outlay.
The saving is obviously bitten into from this year with the double whammy on dividend above the £5k pa tax free allowance.
Tin Pot
Guru
All small business accounts are much of a muchness, unlike personal accounts.
Use a free one and move every couple of years to keep it free.
I should have switched from HSBC a while ago but can't be arsed. They wouldn't open an account unless I took debit and credit cards, not used once in years, now they are charging me for them.
Use a free one and move every couple of years to keep it free.
I should have switched from HSBC a while ago but can't be arsed. They wouldn't open an account unless I took debit and credit cards, not used once in years, now they are charging me for them.
I had a business account with Natwest for a few years and they refused to give me an overdraft yet i had one on my personal account . I kept asking my business manager to transfer the overdraft as i didn't want one on my personal account as i only used it to fund materials for my business but he refused . So i told him what a useless twat he was . Trust me on this . Never ever tell someone in charge of your bank account that he or she is a useless twat . He tucked me up big time 
He left the company but before doing so put a note on my account ( not to be removed ) that every request i made had to go through him . But it couldn't , because he didn't work for them any more
He left the company but before doing so put a note on my account ( not to be removed ) that every request i made had to go through him . But it couldn't , because he didn't work for them any more
OP
OP
vickster
Squire
A linked bump for this...someone has said that I need to get professional indemnity insurance. Anyone got such and through whom? AXA seem to offer, or I'd prefer to go with a similar big company who might actually pay out should someone claim against me
Also, regarding setting up the Ltd company, I can do this directly online via hmrc or apparently you can buy off the shelf packages with the company registered elsewhere? What's better? I'm in no great rush as I'm contracted until early August on a fixed term
Bank wise, I think I'll go with Natwest as it'll be simpler, but the free banking starts from the day of set up so I'd be best to wait until I know when money will be going in
I still need to confirm with my mortgage provider, but I might just pay it off if it's how much I think it probably is!
Much life admin to do!
Also, regarding setting up the Ltd company, I can do this directly online via hmrc or apparently you can buy off the shelf packages with the company registered elsewhere? What's better? I'm in no great rush as I'm contracted until early August on a fixed term
Bank wise, I think I'll go with Natwest as it'll be simpler, but the free banking starts from the day of set up so I'd be best to wait until I know when money will be going in
I still need to confirm with my mortgage provider, but I might just pay it off if it's how much I think it probably is!
Much life admin to do!
phil_hg_uk
I am not a member, I am a free man !!!!!!
I had a ltd company with someone else many years ago for a very short time and they took care of all that but as far as I remember you just go to companies house website and find a name no one else is using then go here -> https://ewf.companieshouse.gov.uk//runpage?page=welcome and pay your £15 but I think you have to appoint a secretary and directors and stuff.
I spoke to my accountant about all this a little last year and he already told me he could take care of registering the company and preparing the annual accounts and all that if I wanted to go ahead so that would be my first port of call. One thing I do remember was getting a letter telling me I was going to be fined for not submitting the annual accounts on time which is why I ended up going off on my own the other person just couldnt get there act together to submit the company accounts on time
I am sure if thats not right someone will be along in a min with more info.
I spoke to my accountant about all this a little last year and he already told me he could take care of registering the company and preparing the annual accounts and all that if I wanted to go ahead so that would be my first port of call. One thing I do remember was getting a letter telling me I was going to be fined for not submitting the annual accounts on time which is why I ended up going off on my own the other person just couldnt get there act together to submit the company accounts on time
I am sure if thats not right someone will be along in a min with more info.
Don't do any work for them then . Keep it simple for you , not them .
OP
OP
vickster
Squire
Except the work will be plentiful and well paid...and easy for the money
they will happily deal with limited companiesI know them, they know me, just the policy of the parent company...who are huge so it's possible I may do work for another subsid
bikingdad90
Guru
I would go an speak to an Accountant and a lawyer as there are so many different options and problems. Off the top of my head..
If you register for VAT do you go for a conventional registration or get on a flat rate scheme?
If you go down the Ltd route, how do you take you earnings? If you take a salary your NI will be on a directors basis not paye basis. If you resign midyear for whatever reason you can get a big NI bill due to the way it is calculated.
There are also insurances to consider. You need to ensure if someone thinks what you have done is rubbish and they sue you that are properly indemnified.
How are your service contracts going to be written so that you are not seen as an employee on long term assignments in HMRC eyes.
If you register for VAT do you go for a conventional registration or get on a flat rate scheme?
If you go down the Ltd route, how do you take you earnings? If you take a salary your NI will be on a directors basis not paye basis. If you resign midyear for whatever reason you can get a big NI bill due to the way it is calculated.
There are also insurances to consider. You need to ensure if someone thinks what you have done is rubbish and they sue you that are properly indemnified.
How are your service contracts going to be written so that you are not seen as an employee on long term assignments in HMRC eyes.
Don't worry too much about winding a company up at this stage, it is not too much bother. Set up your limited company with companies house for £15 as you said above. Or you can buy one off the shelf for about £100. Then set up your bank account when you need to. You will need the certificate of incorporation to set up the account. You will then become an employee of the company and will need to pay PAYE and NI on your earnings. At the end of the tax year you will have to submit abbreviated accounts to Companies House and accounts to HMRC to account for corporation tax on any profits in the company. All of this is very easy and you can pay an accountant to do this for you. The accountant will also be able to tell you the best combination of how to withdraw money from the company, i.e. salary and/or dividends.
The only fly in the ointment as far as I can see is that HMRC don't like individuals working this way for one company. Hopefully you will be able to get around this by having some work with another company or individual.
Way, way in the future if you want to wind up the company you can do that easily. You don't need to keep the bank open. You will need to tell HMRC that you are no longer employed by the company, by giving yourself a P45. The company will need to have dormant accounts submitted once a year, but these are very easy to do. After a year or so you can apply to have the company struck off the listing, which will cost £10 (or did do when I did it).
Take it step by step and don't get daunted by things that may not happen. It will work out OK.
The only fly in the ointment as far as I can see is that HMRC don't like individuals working this way for one company. Hopefully you will be able to get around this by having some work with another company or individual.
Way, way in the future if you want to wind up the company you can do that easily. You don't need to keep the bank open. You will need to tell HMRC that you are no longer employed by the company, by giving yourself a P45. The company will need to have dormant accounts submitted once a year, but these are very easy to do. After a year or so you can apply to have the company struck off the listing, which will cost £10 (or did do when I did it).
Take it step by step and don't get daunted by things that may not happen. It will work out OK.
