How to set up a Limited Company

How to set up your own limited company - checklist BROUGHT TO YOU BY 1st Contact Accounting Changing from permanent employment to contracting? The first decision you will probably make is whether to operate as a sole trader or set up a límited company. Register with Companies House Tell the HMRC If you start up a new limited company you must register for: A limited company is one of the best ways of running your business as it provides flexibility in structuring your income to minimise your tax. All UK limited companies must register with Companies House. The registration process for limited companies is known as incorporation. Once a business has been incorporated, it is officially a limited company. • corporation tax PAYE/NI if you are going to employ staff including yourself as a director • VAT if you want to claim VAT on expenses. However, you will need to add VAT onto your invoices A company must be registered with Companies House and directors and shareholders appointed. Financial Accounts Once a year you will need to file financial accounts to both HMRC and Companies House. If you haven't prepared financial accounts before, you will probably need a professional advisor to help you because they must follow certain Generally Accepted Accounting Principles (GAAP). Accounts must be prepared to show an'accurate and fair' reflection of your company's financial activities. or limited Company Record Keeping In order to draw up accurate annual accounts, you need to keep a full record of all business income and expenditure. This also allows for the correct calculation of corporation tax. Business records must be kept for six years from the end of an accounting period. Sole Trader Directors' Responsibilities Reasons to set up a Limited Company Personal Income Tax Unless the company is a non-profit making company and the director(s) receive no payments or benefits, they must complete a Self Assessment income tax return annually. Company Tax Return You are required to send a company tax return following every accounting period regardless if the company makes a profit or not. This is made up of a fully completed return form CT600 plus a copy of your company accounts and tax computations. Each company tax return can cover a maximum of 12 months. v Separate legal entity to the directors and shareholders v Members liability is limited Financial accounts Directors are responsible for making sure that the financial accounts of the company are accurate. Both the company's financial accounts and Company Tax Returns must be signed by a director to approve their accuracy. Corporation tax less than Income Tax v Easy to set up * It's inexpensive TAX AND ULTIMATELY.. YOU CAN STRUCTURE YOUR INCOME 1st Contact Created by 1st Contact Accounting | 1stcontact-accounting.com | Facebook/1stcontact | Twitter.com/1stContact a world of opportunity