Contractor Accountants : Limited Company FAQ

Operating your own limited company gives you the opportunity to minimise the amount of tax you have to pay through tax planning. Don’t panic though, as our dedicated EAFS accountant will discuss all these opportunities with you. As a general rule of thumb, you could take home between 75-85% of your contract income...

Both options offer their own advantages depending on your circumstances and requirements. If you are uncertain as to which option is best for you please contact one of our specialist business consultants. As EAFS provide both Limited Company Services and an Umbrella Solution, you can be assured that you will be given unbiased advice as to which option is best for you...

At Euro Accountancy & Finance Services, our services offer you the choice of spending as much or as little time on admin as you favour. By choosing our standard service you will prepare your own sales invoices and spend no more than 15-20 minutes each month completing our simple and easy to use spreadsheets. If paperwork and admin are not for you, then have a look at our additional services that can remove this burden from you...

When operating through your own Limited Company, you will incur expenses that will generally fall into two types; those incurred in performing your contract (e.g. travel) and those incurred to administer your company (e.g. accountancy fees). It is most likely that those incurred in performing your contract will be made from your own finances and will therefore need to be reimbursed from company funds. An expense claim form, detailing each expense, will need to be completed to support this payment to yourself.

As a client of EAFS, you will be provided with an expenses guide. This outlines the most common expenses that can be incurred by your business, to ensure expenses are claimed correctly and avoid any potential personal tax charges.

You can simply choose to leave your company dormant, if you plan on going back to contracting, or close your company down. In the event that you choose to close your company, EAFS will be there to assist you in this process at no extra cost...

A dividend is a slice of a company’s profit that is given to the shareholders. This means you, if you operate your own Limited Company. Dividend income that you receive will not be subject to National Insurance contributions and will be tax free if you are a basic rate taxpayer. 25% income tax is applied on the amount of dividend income that is received above the basic rate tax threshold...

Unfortunately, you will still have to pay the full amount for that month. Our accounting fee is based on a fixed annual amount, agreed in advance, for all the work we perform for your company throughout the year. In return for agreeing a fixed fee in advance, we request that payment is broken down into 12 monthly instalments...

"IR35" is a tax legislation that affects all contractors and therefore has to be given serious consideration. The legislation allows HMRC to tax the contractor, operating through their own Limited Company, as though they were an employee of the end client, rather than under normal Limited Company rules. The legislation applies to each contract you engage upon rather than to your actual company, so IR35 may apply to one contract but not the next.

In determining whether or not IR35 applies to your contract, you will need to consider the terms and conditions of the contract, together with your actual working practices. To determine your IR35 status, it would be advisable to seek expert advice and have your contract and working practices assessed by an industry professional.

Yes, even if your contract is considered to be inside IR35, there are still some benefits that can make it worthwhile. You can still claim 5% of your turnover to cover company administrative costs, claim the benefit of being on the flat rate vat scheme, claim any HMRC online filing incentives and earn interest on funds held in the business bank account...

You can easily form your own Limited Company in an efficient and easy five-step guide, only taking a matter of minutes to complete. Once you have submitted all your details, we can incorporate your company within 24 hours. Alternatively, contact one of our specialist business consultants.

You can easily form your own Limited Company in a very simple five-step guide, which should only take you a matter of minutes to complete. Once you have submitted all your details, we can have your company incorporated within 24 hours. Alternatively, contact one of our specialist business consultants...

When forming your own Limited Company, you will be appointed as director (and employee) of the company and will be responsible for managing the company affairs. The company will pay you a salary for acting in this capacity. You will also be the owner (shareholder) of the company and will receive dividend income from the company’s taxed profits. The frequency and amount of this dividend income is decided upon by the company’s director(s). All the cash held in the company bank account legally belongs to the company, the finances of the company are separate to your own personal finances. You can extract funds from the company through a combination of the following:

Salary – as an employee, a net salary is paid after income tax and NI deductions.
Dividends – paid to you as a company shareholder.
Expenses – you can claim your allowable business expenses.

Each year, the company will have to pay corporation tax on its profit, where profit is calculated as the total amount of sales income earned – less any business expenses incurred. As a director of a UK Limited Company, you will be legally obliged to complete a personal tax liability. You may also have to pay additional income tax on your dividend income if you are a higher rate taxpayer.

When operating your own business, you will need to consider if there is a need to take out any business insurances. This can include professional indemnity, public liability, employer liability or business equipment cover. It is advised that you review your new contract as this may stipulate a minimum level of insurance cover required to fulfil the contract...

Here at Euro Accountancy & Finance Services, we understand that not every client requires the same exact degree of service. We provide a standard service that can be complemented with additional amenities to suit your needs. All fees are fixed and agreed in advance, starting from as little as £80 plus VAT per month...

Quite simply, call us on +44(0)131 220 2820 and speak to one of our specialist business consultants. Alternatively, arrange a no-obligation meeting to discuss your requirements...