Advice on bcoming a limited company

[Chippie]

Hi,

I’m a qualified and experienced carpenter who is looking for advice on setting up as a limited company.

At the moment, all my work is sourced via a recruitment agency, but to be honest I am becoming rather fed up of the whole agency and umbrella system and believe going limited would have its advantages.

Initially my plan would be to continue working on site under my limited brand, and hopefully that alone would increase my take home pay. However, I’ve recently turned my garage into a joinery shop where I have started to build some items of furniture that have sold within days of advertising and received positive feedback, giving me a little confidence boost. This could be a stepping stone towards becoming independent, however, it would be nice to have more freedom over my work as I do also like a busy environment, so the freedom to do both would be ideal. At least for now, anyway.

Is it difficult or complex running a limited company? I plan to be the only director, company secretary, shareholder and employee etc. I’m certainly not going into this with the idea of huge profits, but I do believe it would have its advantages financially, and again more freedom. I guess the main thing that concerns me is the paperwork. Is there much, and would it take over your life if you didn’t employ an accountant? Some people seem to suggest that you should allocate about 30 minutes a week for sorting your accounts etc. Does this sound right?

Also, would this mean I could approach a principle/sub-contractor directly and maybe negotiate a better pay packet, as the extortionate agency and umbrella fees could be avoided if I was to introduce myself directly, surely?

I know I’m asking a lot of questions, but any advice would be gratefully received. I would also like others to share their own experience of running a limited company good or bad, pro and cons.

Thanks

[Manic]

Chippie

Suggest you ask a mod to move this to Accounting sub forum. There are some Guides on the right which will give you some background.

Personally I run my own accounts in Xero*, submit my own VAT and Companies house submissions, but use an accountant to produce my end of year and SA returns.

*Freeagent is another popular option.

[original PM]

Really...

It depends on what jobs you take....

if you are only ever dealing with doing jobs for the general public you can get away with being a sole trader.

But what about this?

https://www.gov.uk/what-is-the-const...ndustry-scheme

And finally no it is not difficult to run a ltd company - but you will need an accountant - try a local one as you may find it cheaper - although it will depend on the complexity of the accounts.

Do you bleed radiators as part of your services?

[DaveB]

Most people on here are IT contractors so you wont get much reedback directly related to your trade.

The balance between Self Employed, Ltd Company and Umbrella very much depends on your day rates. As a rule the lower the day rate the more marginal the gains are by going Ltd. It will be worth you doing some sums and working out just what you stand to gain or lose. Bear in mind that by going Ltd ytou may save brolly fees etc but will have to pay for accountancy and other running costs for the business and it will take time to manage.

The First Timers link on the left of the page has links to some online calculators that will help you get a better view. It's aimed at IT contractors but the basics still apply.

https://www.contractoruk.com/calculators

[NotAllThere]

Less than friendly responses removed. Thread moved to Accounting/Legal.

@Chippie - in case you saw the responses I removed, don't worry about them. Some people are idiots.

[DaveB]

Less than friendly responses removed. Thread moved to Accounting/Legal.

@Chippie - in case you saw the responses I removed, don't worry about them. Some people are idiots.

General is a bear pit and the regulars always get excited at the prospect of fresh meat.

Stick to the professional forums (Accounting/Legal, Businedss/Contracts etc) until you find your feet and you'll be fine.

If you just want to waffle about stuff of no consequence with like minded folks then TPD is the place to be. Just don't try and read it all from the beginning, it's really not worth it and may do your sanity some long term harm

[Lance]

I have a pal who is a chippy who refuses to deal with umbrellas.
He's not bothered with a LTD though. He's just self-employed and invoices directly.

Most IT contractors who don't want to use an umbrella, are LTD for 2 reasons. The first and main one is that agencies or clients want to deal with LTD companies not self-employed individuals.

The second reason is for tax efficiency. Whether that works for you is something that we cannot answer as we don't know the industry that well. What I can tell you is that there is a thing called the Construction Industry Scheme (https://www.gov.uk/what-is-the-const...ndustry-scheme). That is likely to limit your options, or at the very least have an input into what you decide to do.

What you need to do is to talk to an accountant who specialises in self-employed builders.

Good luck.


EDIT: Oh and running a LTD is easy as long as you read the guides, pay attention, and get a half decent accountant. There is a lot to learn but as long as you don't spend the tax mans money, and don't miss important dates for submissions it's not likely to go wrong.

[Maslins]

Stick to the professional forums (Accounting/Legal, Businedss/Contracts etc) until you find your feet and you'll be fine.

Yes...nobody's ever rude in the professional forums

My opinion (and for disclosure I am an accountant, but your situation wouldn't be one we could assist with so hopefully I'm unbiased) is a Ltd Co may well be a good option for you, but given your comments please don't even think about DIYing it. I'd recommend a more standard "small business accountant", rather than one of the "contractor specialists". Having said that, if you go for the latter, at least ensure they're one confident with things like CIS deductions, as I imagine you'll have to deal with that.

It'll inevitably take more than half an hour a week for the first couple of months as you get your head around it all...but yes, half an hour a week over the longer term sounds plausible for a one person company.

Whether it also means you can negotiate a better rate with the principles...no idea!

Good luck with it

[WLB2018]

I would speak to an Accountant and seek their advice. From what I know of trades (chippies, plasterers, plumbers, sparkies and alike), they are all sole traders not Ltd.

[NickFitz]

If you just want to waffle about stuff of no consequence with like minded folks then TPD is the place to be. Just don't try and read it all from the beginning, it's really not worth it and may do your sanity some long term harm

Also, a lot of FG's links don't even work any more