Costs check

[dankmemes]

Hi,

Looking to start contracting in the next few months, and want to form a personal holding company plus a service company so I've been speaking to accountants.

They're quoting me £400 to set up the two companies, £100 tax + vat set up, £150 quarter for MTD and £2k a year for accounts and tax for both companies.

£3.1k in the first year seems a bit steep. What do you think?

[mudskipper]

Hi,

Looking to start contracting in the next few months, and want to form a personal holding company plus a service company so I've been speaking to accountants.

They're quoting me £400 to set up the two companies, £100 tax + vat set up, £150 quarter for MTD and £2k a year for accounts and tax for both companies.

£3.1k in the first year seems a bit steep. What do you think?

Yes, it seems steep.

[Lance]

Setup seems steep. MTD should be included in accountancy. Annual fee seems about right.

My advice is to setup the companies yourself. Only use one company. And read the accountant recommendation thread.

Dare I ask, what on earth do you want 2 companies for? If you’re simply a contractor then you have no need for a holding company.

[dankmemes]

Setup seems steep. MTD should be included in accountancy. Annual fee seems about right.

My advice is to setup the companies yourself. Only use one company. And read the accountant recommendation thread.

Dare I ask, what on earth do you want 2 companies for? If you’re simply a contractor then you have no need for a holding company.

I was thinking of establishing the companies myself after seeing their costs, thanks.

As for the holding, I just thought I would make thinks 'clean' from the start, and allow the money to be used for investments. Rates will be pretty high, so thinking I'll want to keep the money in the company.

[Maslins]

My opinion:
- don't bother with two companies,
- don't DIY.
Will half your costs, simplify things greatly, and reduce risk of mistakes.

[Lance]

I was thinking of establishing the companies myself after seeing their costs, thanks.

As for the holding, I just thought I would make thinks 'clean' from the start, and allow the money to be used for investments. Rates will be pretty high, so thinking I'll want to keep the money in the company.

Why not invest in a pension if tax efficiency is your goal?

As for leaving it in the company for investment.... not a great idea. Your simply delaying the tax you'll have to pay to get it out.

Building a war chest should be your goal. Complex company setups can be considered after that.

[northernladuk]

I was thinking of establishing the companies myself after seeing their costs, thanks.

As for the holding, I just thought I would make thinks 'clean' from the start, and allow the money to be used for investments. Rates will be pretty high, so thinking I'll want to keep the money in the company.

I think you need to learn to walk before you run. If you can't find a decent accountant to start your company up, which should be a ridiculously simple thing to do, I'd say you've got a lot more learn around just basics before getting giddy over investments.

Your warchest should be number one and you should be paying yourself the absolute minimum for the first 6 months. You should have less pare money in this period than you've probably ever had IMO.

I've a feeling you are going to want to play with that money that appears just to be sitting there but you can't.

Basics first, fancy stuff much much later.

P.S. Maslins is one of our well respected accountants on here and he's already given you some advice for free. You can't do wrong giving him a buzz and getting him to sort your affairs for you. He's on our accountant recommendation list and posts very regularly on here so that's one thing of your list of things to do.

[dankmemes]

Why not invest in a pension if tax efficiency is your goal?

As for leaving it in the company for investment.... not a great idea. Your simply delaying the tax you'll have to pay to get it out.

Building a war chest should be your goal. Complex company setups can be considered after that.

All makes sense, thanks. I'll simplify things.