How can i set myself up as a ltd company in the uk?

Question

i work as a chef for an agency, and they say i can't be self employed anymore cos of sum changes in tax laws or sumthin and say i should be able to set myself up as a ltd company.

What are the pros and cons of doing this and how mite i go about it?

i only really work for about 3 months solid in the summer and then sporadically during term time (studying my way out of the kitchens)

Thanks in advance.

Answer 1

I would seriously suggest that you take some advice on this before you make any decision. But to answer your question the link below will take to the Companies House information booklet on registering a company. As it suggests you will probably find it easier to use an agent such as Stanley Davis. Search for "company formation agent" and you should get a selection to choose from.

But should you really operate through a limited company? I doubt if you need the benefits of limited liability status (i.e. if the business fails your personal liability is limited to the share capital subscribed).

The agency are probably suggesting this as they wish to avoid you being classed as an employee of their business for in this case they have to pay national insurance (NI)contributions on your earnings. Working through a company will transfer this potential liability to you.

You haven't given enough information to be sure it is likely that your company would come under the IR35 regime. (Google that if you're in a cavalier mood). The rules can be quite complicated but the basic consequence is that your company has to pay most of the earnings to you as a salary, which incurs this employer's NI charge.

So, the pros. I can't really think of any except that the agency will allow you to work through them.

The cons. There is more paperwork involved with a company, more red tape with deadlines which incur fines if you fail to meet them, Accounts have to be produced in a specific format for filing at Companies House. If you have never done this before you will probably need to use an accountant which will incur fees (in my area these are a minimum of about £600 per year).

Go and talk to accountant who can advise if this is the best course of action.

Answer 2

both Ltd organizations and sole investors have strengths and weaknesses. For tax purposes the alternative relies upon on how a lot you're making each and each 365 days. frequently its very puzzling to provide precise advice, yet on your case that's common. Your income is envisioned to be lower than your income tax own allowance of £6475. so that you received't pay any income tax as a sole dealer. obviously you won't be able to get extra effectual than 0, so there is not any favor to even evaluate being a Ltd employer for tax purposes. I imagine that if you're writing software you're not any more determining to purchase in a lot "inventory" so there is little or no threat of you defaulting on any money owed. so that you received't favor the protection of restricted legal duty for this. You do favor to guage what may ensue in case your software replaced into defective. ought to the precise person be uncovered to massive economic losses as a effect? you're promoting the software as a employer so that you'll nicely be responsible, even with the actual undeniable actuality that in case your customers are businesses to boot you are able to disclaim this legal duty. You *may* favor to commerce as a Ltd employer to get the protection of restricted legal duty the following, yet an coverage coverage ought to possibly be more most low-cost and extra accessible. in case you settle on to stay with being a sole dealer and your employer grows you are able to continuously convert later if it is going to change into effectual to finish that.