Your Limited Company Questions Answered

In the first instance you will need to incorporate a limited company and become the sole shareholder and director.

You will then be able to offer your services to your agencies and clients through the limited company.

The limited company will invoice your client for your services which will be deposited in the company’s business bank account. You will be paid a salary from the limited company which can include dividends out of the company profits.

At year-end both the limited company and you as director have to submit a tax return.
All of the services above are included in our Limited Company Service.

The dividends that you draw on profits, are not subject to National Insurance and are taxed at a lower rate than your salary.

As your salary will be made up of both a salary and dividends from your limited company, you are able to reduce the amount of tax and national insurance you would pay than if all you’re earnings were treated as salary.

You are also allowed to claim tax relief on certain business related expenses which will we also help to increase your take home pay.

IR35 is tax legislation that came into effect in April 2000 and affects all contractors who are not deemed by HMRC as self-employed. The legislation allows HMRC to tax a contractor operating through their own limited company as though they were an employee of their end client rather than under normal limited company rules if certain conditions are not met.

It is important to determine whether IR35 applies to any contract you sign with an end client.

It is advisable to seek expert advice and have your contract and working practices assessed by an expert, which is a service we provide through our Limited Company Service.

Our expert accountants will walk you through the basics of running your own limited company, and will answer any and all questions along the way. After the initial consultation, which usually takes no longer than 30 minutes, they will have you up and running with your own limited company within hours.

i-CAS limited company services which start from as little £95 per month.

Our monthly fee includes unlimited advice and support, RTI-compliant payroll for company directors, quarterly VAT returns and all your year-end HMRC and Companies House filings.

We also provide you with a cloud based software which will automate Invoices, expenses, RTI payroll, on-the-fly reporting and tax return filing.

There are two type of expenses incurred when working through your own limited company:

Expenses incurred performing your contract, like travel, and those incurred administering your company, like accountancy fees.

Expenses incurred performing your contract will most likely be paid out of your own pocket and will need to be reimbursed from company funds. You will complete and submit an expense claim form to support this payment yourself.

Business expenses incurred by the company can be deducted for tax purposes and or advisers will provide you with a list of claimable expenses.

If you are a contractor where you cannot work through your Limited Company, you can choose to leave your Limited Company dormant until you are in a position to use it again.