Relieve the stresses of Limited Company contracting with 4 simple solutions

So you’ve made the decision to leave permanent employment and are considering going Limited, you may have heard from other contractors that setting up and running a Limited Company is more hassle than it’s worth.

Whilst the higher take home pay and increased control over your money and business is attractive, you’re trying to weigh up the pros and cons for going Limited vs using alternative trading models.

In this blog, Laura Hepworth from Intouch Accounting shares some of the stresses and simple solutions Limited Company contractors face to help show you just how straightforward it can really be.

1. STRESS: How do you pay your taxes? VAT and PAYE

The majority of Limited Company contractors are VAT registered, so every quarter they’ll be required to submit their VAT returns and pay the tax due.

SIMPLE SOLUTION: Your Contractor Accountant should be able to register you for VAT and PAYE, so there’s no need to worry about doing it yourself. They should also remind you when returns are due and when (and how much) tax is required in payment, so no worrying over what needs to be done and when.

You’ll also need to complete and submit your annual Self-Assessment Tax Return as a Limited Company director. Your Personal Accountant should also be able to assist you with this and ensure you submit your return and amount of tax due on time and correctly.

2. STRESS: You have to submit your confirmation statement to Companies House

Companies House requires updated information about your company; including your address (and updating this is if you move), your company’s personnel and company’s share capital.

SIMPLE SOLUTION: Your confirmation statement must be submitted to Companies House within two weeks from the date you incorporated your Limited Company. Should you decide to enlist the services of a Contractor Accountant, they will be able to help you complete this, so there’s no need to worry when first starting out.

3. STRESS: You must submit annual accounts

The thought of having to deal with HMRC and Companies House is enough to put anyone off going Limited! But with the right support in place, you’ll find that they will do all the legwork for you.

SIMPLE SOLUTION: Your Personal Accountant will compile and submit a copy of your annual accounts to HMRC and Companies House every year. You must then pay your due Corporation Tax within nine months of the deadline from your accounts submission.

Many Contractor Accountants have online software which allows you to record your expenses and invoices. By keeping this up to date and using a system which allows your accountant access, you can enjoy hassle-free annual accounts, compiled and completed by your accountant from the information you provide.

4. STRESS: You have to invoice clients and chase payments

Traditionally a Limited Company contractor will invoice three to five clients per year, as the duration of each contract will determine how many they can complete on an annual basis. They will also have to chase payment if, for whatever reason, the client is late. Whilst both can be the bane of contractor’s day to day life, it’s the fundamental end part of each contract and also getting paid!

SIMPLE SOLUTION: Ensure you have a contract in place that outlines your payment terms, so that each client knows your plan for when things don’t go to schedule. When invoicing clients, your Contractor Accountant’s online software should allow you to upload invoices directly, allowing your Personal Accountant to see which invoices are in the system and which are awaiting payment.

Final thoughts

So there you have it. A no nonsense guide to some of the main barriers and solutions we hear from contractors when they’re considering going Limited. With the right support and guidance in place from a specialist Contractor Accountant, there’s nothing to fear!

Everyone’s circumstances are different and what’s right for one contractor may not be right for you, so speak to our team of expert advisers today about how Intouch can help you achieve contracting success from going Limited.