When I recently decided to start AutoLogic and enter the world of contracting, there was a lot I didn't know about. This ignorance ranged from setting up a limited company, right through to indemnity insurance and what it's about. I'm hoping this simple list will help anyone else looking to get into the field of contracting.
None of the advice here is legal advice. Anything to do with cash flow, taxes, contracts, or other legal matters should be discussed with the relevant professionals in the relevant fields.
This list is still massively ongoing. There is a lot to be added and a lot to be clarified. Any comments, feedback, suggestions, etc, are all welcome. Pull requests, provided they're relevant and make sense, are also welcome.
This guide/list is mainly aimed at people in the UK. It covers registering a UK based limited company and UK based services.
These are considered the minimum steps one should take to get a business up and running.
- Get a "virtual office" or mail forwarding service
- Register a limited company via Companies House
- Register for Corporation Tax
- Register for Value Added Tax (if applicable)
- Register for Payroll (if applicable - most likely)
- Get a business bank account
- Get an indemnity insurance policy
- Find an accountant
The above is a rundown - a simple list - but here we go into a bit more detail on each step. We maintain a list format to keep it simple to digest and easy to follow.
This is entirely optional, but recommended.
- Keep your residential address off public record
- Use it for the registered and service address
- Make sure it includes mail forwarding for non-government mail, such as bank related mail
- Takes 20 minutes and is all online
- Register here
- Certificate of Incorporation comes in via email (PDF)
Before you can register online for the varies taxes, you have to wait for HMRC to send you your Unique Tax Reference (UTR). Companies House will let HMRC know you've registered a company, and thus HMRC will send you a letter (or several) containing this reference and inviting you to sign up for paying taxes.
- This can all be done online using the government Gateway system
- VAT registration is optional until a certain turn over is reached by your company
- Consult HMRC for this threshold and other finer details
- Payroll is needed so you can submit payslips and pay Pay As You Earn (PAYE) and National Insurance (NI) contributions
- Corporation tax focuses on your companies' profits
- This can take upwards of 20-30 working days
- The process generally involves a call from the bank
- Some banks will give you a free banking period. Check out the deals on offer
- Setting up a business bank account with the same bank as your personal account can be beneficial and speed up the process
- Prepare to provide plenty of details to the bank about your business and your personal identity
- Potentially a legal/contractual requirement (confirmation needed)
- Price is based on your business and income, amongst other things
- Your agency/contract might have specific requirements of your insurance. Check this out before purchasing
- Can range between £300 - £1,000+ per year
- Get help with taxes and the legalities surrounding them
- Help with expenses and what you can and cannot claim
- Undestanding how and when to submit tax returns
- Sign off your book at the end of your financial/tax year
- (See below regarding Freeagent)
These are additional steps and services you can utilise to help make your life easier.
- Register with the PCG
- Cheap
- Added protection from tax investigations
- Helplines
- Networking
- Register a Freeagent account to make your accountancy very simple
- Provide it with access to the above tax systems
- Hook it into your business bank account (if supported) for consolidattion of incoming and outgoing cash flow
- STILL get an accountant. Freeagent doesn't replace or constitute a complete 100% legal framework (in my personal opinion). Freeagent has an accountant search facility
- Help us both out by using my referral code (10% discount):
43wr0t2g - Use Moo to get some very fancy, professional business cards
- Get a website in place so you can advertise your skills and experience