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Limited Company

Limited Company FAQ

We talk to a wide range of contractors and small business each day, each one has different requirements but the majority will ask a number of common questions about their new limited company.

The list of frequently asked questions about limited companies is below for your perusal. Remember we are only a call away and are happy to talk through your specific requirements:02031 37 64 62, you can also contact us and we will call you back to save you the cost of the telephone call.

Limited Company Accountants

1. How much tax will I have to pay from my contract income?

Trading through your own limited company means you can consider tax planning to reduce your tax bill. Your Contractors Limited Company account manager will discuss your specific situation and will advise your best course of action. In most cases you can expect to take home around 80% of your gross income.

2. Will I have much paperwork to do myself?

The amount of paperwork you have to do is your choice. If you register for the Contractors Limited Company Starter service you will raise your own invoices as well as spend around 30 minutes per month completing very simple spreadsheets.

If you would like Contractors Limited Company to handle all this for you, simply sign up for our Complete service, and we will take care of this administration on your behalf.

3. Can I claim expenses?

Running your own limited company is likely to involve expenditure on your behalf. There are normally two types of expenses:

  1. Expenses incurred in performing your contract assignment, such as travel.
  2. Expenses incurred in the administration of your company, such as accountancy fees.

Contractors Limited Company clients will benefit from an expenses guide detailing the most common expenses that will be incurred by your limited company, together with an expenses claim form.

You will have expert tax advice that ensures expenses are claimed correctly and makes sure there are no personal tax charges.

4. What are dividends?

Dividends are the proportion of your company's profits that paid out to the shareholder (that's you!).

5. Is there a tax on dividends?

There is no National Insurance tax on dividends. There is no income tax on dividends if you are a basic rate tax-payer. There is 25% income tax on dividend income above the basic rate tax threshold.

6. What does the fee include?

The Contractors Limited Company fee is based on a fixed annual amount dependent on whether you choose the Starter or Complete service. The fee is for all the accountancy related work we carry out for your company throughout the 12 month period.

Payment is made in 12 equal monthly installments.

7. How do I set up my limited company?

Setting up your limited company takes less than 10 minutes on our website. After this the limited company will be formed within just a couple of hours. All you need to start is a company name and a credit card to complete the transaction.

You will receive all the necessary Limited Company documentation, together with VAT and PAYE registration details.

The online process will require you to have certain details:

  1. Director: that's you. Directors control the company's bank account.
  2. Shareholder: that's you. Dividends are paid to the Shareholder(s).
  3. Registered Office: that could be your own home address or Contractors Limited Company's offices if you'd like us to handle your company's business mail.

8. Do I need insurance?

This will depend on your specific contract assignment, so you should check your contract and see what insurance(s) you require. It is common for freelance contractors' limited company to have: Professional Indemnity, Public Liability and Employer Liability insurance.

9. Will a Student Loan affect me setting up my own limited company?

This will depend on your current status. We suggest calling us to discuss you specific situation or contacting us to request callback. We cater our services and solutions to suit your needs and situation, its normally more effective for us to discuss your student loan and the best approach.

10. How can I get started?

Simply click here to register and engage the services of Contractors Limited Company. One of our expert business consultants will call you back at a time that is convenient to you.