When you are moving from permanent work to your first contract, there is a basic list of things that must be done.
To make the transition hassle free, it’s a good idea to use a provider who has experience in in all aspects of the move, that way, you can have peace of mind that decisions you make at an early stage will be the right ones, for example:
- Finding a suitable name for your company
- Checking the agency contract terms and conditions
- Sorting out business insurances
- Getting a company bank account setup
Behind each of the above however, is a level of detail you should be aware of, to ensure that your first venture into business runs smoothly.
Limited Company Set-up
There are many firms who register limited companies, but one of the most important factors is to ensure, from the outset, that the share allocation is structured to minimise your overall tax liability. AccountsNet will take the time to find out your long term plans for additional directors and employees, and from this we will structure the share allocation accordingly. In addition, your company must be registered for PAYE and, optionally, VAT. Again these are details which we take care of as part of our company start-up fee
Working out your IR35 Status
Your contract must reflect the way in which your relationship with the client will work in practise. However, if there are pertinent clauses omitted by the agency, then you could be leaving yourself open to a challenge from HMRC further down the line. This can be very costly in practise, and we always recommend that we conduct a thorough review of your contract. We will then provide a written report detailing any pointers toward / against deemed employment, and also suggestions of how your contract could be strengthened against IR35.
Business Insurances
Most contracts specify that the supplier (your limited company) will possess professional indemnity as well as public & employers liability insurance. These offer protection for your company and employees and are a pointer that you are legitimately in business in your own right. There are specialist providers which cater for freelancers insurances, and they will provide a fixed quotation based on the levels of cover your contract specifies.
Again, we can explain what each of the insurances cover, and what is likely to be needed in your particular circumstance.
Bank Accounts
In order that the agency / client can pay for your company services, you will be required to setup a business bank account in your companies’ name. We generally recommend you consider bank accounts that have no services charges for life such as Santander, but for expediency, you may wish to also use a bank in which you already have a personal account. In this case, you should be able to negotiate a service charge free period of at least a year. Some intermediaries receive payments for persuading clients to open an account at a ‘private bank’, but bear in mind that these banks have a monthly service change – for the privilege of holding your money.
In summary then, AccountsNet will form your limited company within 4 hours of your instruction, register for PAYE & VAT and setup an online account on our system for £100+vat.
Please feel free to contact us today for an initial discussion of your requirements.
