There are several vehicles through which you can legally perform services on behalf of third parties in exchange for remuneration. The most common of these is the Pay As You Earn (PAYE) system where you are directly employed by a company who handles your tax and national insurance liabilities on your behalf.
But what if you’re self-employed? If you’re in this position, you have several options available to you including the formation of a limited company, allowing you to operate as a legal entity and exchange services for payment.
As a chartered accountant, we can advise you on setting up such a company to provide you with the most efficient way of providing your services to your customers.
What is a Limited Company?
A limited company is best described as an entity which acts as an umbrella for the conducting of business transactions. Whether you’re an individual and don’t plan to hire any employees or already manage a team of staff, the formation of a limited company can be used to cover your activities.
Unlike carrying out these activities as a sole trader, you are seen as an employee of your company and therefore benefit from the separation of your personal assets and liabilities from those of the company.
How Do I Set Up a Limited Company?
The process is straightforward but there are several important details which need to be collated. As your accountant, we will handle this process on your behalf to ensure that your company is registered properly and you can begin trading immediately.
Small Business Accounting
You will be required to submit details of your earnings, typically on an annual basis as you are subject to both corporation tax in addition to tax on your personal salary and any dividend you pay yourself.
As your bookkeeping tax account, we will assist you in ensuring that all necessary financial information is present such as invoices, receipts and details of your expenses. Our tax preparation services will then see us collate these documents to assess how much tax you are due to pay.
Once your tax submission is required by HMRC, we will then submit it on your behalf and manage any further liaison required with the tax authorities.
The Benefits of Operating Under a Limited Company
For many self-employed people, this method of working is usually most beneficial for several reasons;
- Your tax liability can often be reduced compared to other methods of working, saving you money and allowing you to keep more of your earnings.
- You gain increased commercial credibility through the formation of a limited company.
- You are personally protected in the event that your business fails, with any liabilities remaining those of the company.
Barron & Co Ltd: Providing a Variety of Small Business Accounting Services
As an experienced business accountant, we have the ability to provide you with a wealth of expertise in all matters pertaining to the operation of your business. Whether you’re looking for a new tax accountant or require professional tax services, we can provide the guidance you require.
Call us today on 0121 274 9108 to discuss your requirements with a member of our team or visit us at our premises which are located at Abacus Court, Bull Street, Harborne, B17 0HH to hire us as your accountants in Birmingham.