easiest way to set up a limited company
Discussion
UpTheIron said:
billb said:
Trying to avoid paying for an accountant just yet!
If you don't know how to form a company (which is easy) are you confident you can manage without an accountant whilst you run the company (which is less easy)?can get some chums who are accountants in a few weeks but need to set up company now - i do know how to set one up you just go online i was wondering if anyone could rec any of the sites and whether this was the best way. am not spending few hundred quid on an accountant now to set up a company that costs 25 quid online but yes in the long run they should save money.
billb said:
what point do you think you need an accountant? when the first cash starts coming in? towards the end of the year? thanks
As soon as you feel out of your depth or can't afford the time to do your own accounts IMHO.If it's a very straightforward transactional type business, you can do it yourself. If it is more complex with assets, liabilities, stock and capital good investment etc, I'd get a bean-counter on it sooner rather than later.
billb said:
Eric Mc said:
Don't use an accountant to set up your company.
what point do you think you need an accountant? when the first cash starts coming in? towards the end of the year? thanksAt the end of the first year, you will need to supply a set of very specific accounts to Companies House, another set for Corporation Tax purposes to the HMRC and a CT600 booklet with specific figures needed. You will also need to file a self assessment tax return for your own personal income tax. Further to this, if you intend on employing staff or paying yourself through PAYE you will need to account for their deductions and wages at the end of the tax year through a whole different set of forms and procedures.
The thing is, to make sure you can comply with all this at the end of the year, you need to have the correct procedures in place now, or you will be completely stuffed. Further to that an accountant will be able to advise on your taxation situation where to minimise your tax payable take action *during* the year. At the end of the year it may be too late.
Put it this way, I have a Business Management degree from an 'old school' uni, and took accounting and have run Ltd Co's for 10 years, and I still don't know it all, and I still have to ask EricMc questions. At the start of my career I picked up a few late filing penalties for accounts which didnt comply fully etc, and that taught me the hard way.
Seriously, going the Limited route means a serious commitment to employing an accountant, or working a long time to pick up the knowledge and making mistakes that cost you more than the accountant would have cost you in the first place!
JustinP1 said:
billb said:
Eric Mc said:
Don't use an accountant to set up your company.
what point do you think you need an accountant? when the first cash starts coming in? towards the end of the year? thanksAt the end of the first year, you will need to supply a set of very specific accounts to Companies House, another set for Corporation Tax purposes to the HMRC and a CT600 booklet with specific figures needed. You will also need to file a self assessment tax return for your own personal income tax. Further to this, if you intend on employing staff or paying yourself through PAYE you will need to account for their deductions and wages at the end of the tax year through a whole different set of forms and procedures.
The thing is, to make sure you can comply with all this at the end of the year, you need to have the correct procedures in place now, or you will be completely stuffed. Further to that an accountant will be able to advise on your taxation situation where to minimise your tax payable take action *during* the year. At the end of the year it may be too late.
Put it this way, I have a Business Management degree from an 'old school' uni, and took accounting and have run Ltd Co's for 10 years, and I still don't know it all, and I still have to ask EricMc questions. At the start of my career I picked up a few late filing penalties for accounts which didnt comply fully etc, and that taught me the hard way.
Seriously, going the Limited route means a serious commitment to employing an accountant, or working a long time to pick up the knowledge and making mistakes that cost you more than the accountant would have cost you in the first place!
I thought that your accounts didn't have to be certified by an accountant if your turnover (or something) is less than 60K. Given that many small businesses are going to trade in that region why do you not mention this.
Moreover, I would assume that if this is the case then, companies house and the revenue, are going to cut you a bit of slack for lack of knowledge, no?
dilbert said:
JustinP1 said:
billb said:
Eric Mc said:
Don't use an accountant to set up your company.
what point do you think you need an accountant? when the first cash starts coming in? towards the end of the year? thanksAt the end of the first year, you will need to supply a set of very specific accounts to Companies House, another set for Corporation Tax purposes to the HMRC and a CT600 booklet with specific figures needed. You will also need to file a self assessment tax return for your own personal income tax. Further to this, if you intend on employing staff or paying yourself through PAYE you will need to account for their deductions and wages at the end of the tax year through a whole different set of forms and procedures.
The thing is, to make sure you can comply with all this at the end of the year, you need to have the correct procedures in place now, or you will be completely stuffed. Further to that an accountant will be able to advise on your taxation situation where to minimise your tax payable take action *during* the year. At the end of the year it may be too late.
Put it this way, I have a Business Management degree from an 'old school' uni, and took accounting and have run Ltd Co's for 10 years, and I still don't know it all, and I still have to ask EricMc questions. At the start of my career I picked up a few late filing penalties for accounts which didnt comply fully etc, and that taught me the hard way.
Seriously, going the Limited route means a serious commitment to employing an accountant, or working a long time to pick up the knowledge and making mistakes that cost you more than the accountant would have cost you in the first place!
I thought that your accounts didn't have to be certified by an accountant if your turnover (or something) is less than 60K. Given that many small businesses are going to trade in that region why do you not mention this.
Moreover, I would assume that if this is the case then, companies house and the revenue, are going to cut you a bit of slack for lack of knowledge, no?
That said, it depends what you call slack, for example if you are late with your accounts for Companies House and HMRC they don't take you to court straight away, for each of Companies House, Corporation Tax, P35 for PAYE and Self assessment. However, one day late for any of these and its £100 for each one.
Even if your company turns over £50 in the year, then you will need to fill out these forms. There is no law which means that for small businesses these need to be done by an accountant, this is not what I have said above - the 60k turnover is irrelevant for limited companies, but the fact is, to fill out these forms and produce these accounts you need to know what you are doing. Otherwise the accounts won't be in the format they need and they will just reject them and fine you for being late as above.
This is of course without the factor as director you will be signing them to be accurate - if they are not then you can be prosecuted.
Thirdly, by knowing how accounts and taxation works even at a basic level, you can save yourself thousands of pounds a year in tax.
If your business knowledge is minimal, unless there is a particular reason, I wouldnt automatically say there is a reason to go limited. Of course, it limits your liability, but as I have explained above there is a lot more accounting responsibilities to perform.
As I have mentioned, even with a business degree, you still wont be able to fill out all of these forms and produce proper accounts by yourself, correctly straight away. It is good to be eager, but unless you have a lot of business knowledge built up, starting a limited company without the advice of an accountant straight away is financial suicide.
I didn't say don't use an accountant. I said don't use an acountant for your initial company formation.
Get in touch with an accountant as early as possible.
Company accounts (as opposed to those of a sole trader) need to be prepared top a higher stnadard and to a set of formats laid out under company law.
There are lots of rules and regulations covering company transaction - especially those between the company and its directors/shareholders. You need to be aware of these rules from the off and bringing in an accountant at the point where your first set of accounts needs to be prepared may be too late to avoid some pitfalls.
Get in touch with an accountant as early as possible.
Company accounts (as opposed to those of a sole trader) need to be prepared top a higher stnadard and to a set of formats laid out under company law.
There are lots of rules and regulations covering company transaction - especially those between the company and its directors/shareholders. You need to be aware of these rules from the off and bringing in an accountant at the point where your first set of accounts needs to be prepared may be too late to avoid some pitfalls.
Edited by Eric Mc on Sunday 9th March 22:10
The point is that unless you are an accountant, or have a lot of spare time to keep up to date, there is little or no chance that you will be able to keep up with changes.
We have a small company, our accountants don't cost much in the big scheme of things and the fact that I have peace of mind with regard to that side of things means I can use my time to do stuff which I am actually good at and which pays us cash.
Managing the books is another thing..
D
We have a small company, our accountants don't cost much in the big scheme of things and the fact that I have peace of mind with regard to that side of things means I can use my time to do stuff which I am actually good at and which pays us cash.
Managing the books is another thing..
D
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