Costs of setting up a limited company

Hi danl,

Just setting up a limited company is fairly cheap (less than £50), but as you've already been trading as a sole trader, you need an accountants advice on how to "sell" your business to the ltd company to avoid capital gains tax and provide you with immediate tax free "draw down" through a directors loan account. This adds to the cost, but if the valuation isn't reasonable in the eyes of HMRCE, they will challenge it.

The ongoing costs of annual accounts/ tax should be less than £1,000 for a company turning over £35k and not VAT registered. However, it could depend on your trade. If you've got lots of small bitty invoices that you expect your accountant to sort out then the costs will rise.

If you are the only employee, why do you need the accountant to do the PAYE. A good accountant will teach you how to do this yourself, saving you money. Similarly, I supply all my clients with dividend paperwork that they can fill in themselves, all it needs is the date and amount adding.

Can I ask why a ltd co? Is it purely for tax reasons or something else? Depending on your levels of net profit, a ltd co may not save you much in tax, but could add an administrative burden and higher costs (including accountancy!). If your net profit is below £20k, it's not worth it from a tax perspective.

Don't pick your accountant purely on price. You need to consider one who will be pro active and help you build your business. Most importantly you should be able to build a solid relationship with them and not be afraid to pick up the phone for advice (free of charge!!). Find out what will be charged for on top at the hourly rate, it could be more than you think.

If you want any more advice at no obligation, drop me an e mail to stuart@accountancyextra.co.uk and I'll try and guide you if I can

Hi danl,

Just setting up a limited company is fairly cheap (less than £50), but as you've already been trading as a sole trader, you need an accountants advice on how to "sell" your business to the ltd company to avoid capital gains tax and provide you with immediate tax free "draw down" through a directors loan account. This adds to the cost, but if the valuation isn't reasonable in the eyes of HMRCE, they will challenge it.

The ongoing costs of annual accounts/ tax should be less than £1,000 for a company turning over £35k and not VAT registered. However, it could depend on your trade. If you've got lots of small bitty invoices that you expect your accountant to sort out then the costs will rise.

If you are the only employee, why do you need the accountant to do the PAYE. A good accountant will teach you how to do this yourself, saving you money. Similarly, I supply all my clients with dividend paperwork that they can fill in themselves, all it needs is the date and amount adding.

Can I ask why a ltd co? Is it purely for tax reasons or something else? Depending on your levels of net profit, a ltd co may not save you much in tax, but could add an administrative burden and higher costs (including accountancy!). If your net profit is below £20k, it's not worth it from a tax perspective.

Don't pick your accountant purely on price. You need to consider one who will be pro active and help you build your business. Most importantly you should be able to build a solid relationship with them and not be afraid to pick up the phone for advice (free of charge!!). Find out what will be charged for on top at the hourly rate, it could be more than you think.

If you want any more advice at no obligation, drop me an e mail to stuart@accountancyextra.co.uk and I'll try and guide you if I can

Hey Stuart - you must hae been really pleased with this reply if you sent it twice:-)
------------------------
Mike Tombs
TaxAssist Accountants
www.taxassist.co.uk/dudley

He he, no, just pressed the button twice and don't know how to delete one of them!! Apologies from a new boy!

Hi,this a link that I found on this forum(I think!).Accountancy at reasonable cost as a lot of the work is DIY to save costs.

http://www.cheapaccounting.co.uk/rates.php
------------------------
www.scotia-aquatics.co.uk