Limited Company
If you choose the Limited Company route, you will go into business yourself and you will become a Director and Shareholder of your own Company, so you must be committed to managing the business’s finances and the responsibility of working within the relevant legislation. This includes a requirement to complete and submit annual accounts, limited company tax returns and, if registered, VAT returns. This is in addition to bookkeeping and PAYE management. As a Director of your Company you are not personally responsible for any Company debts, provided you have been acting appropriately.
A limited company is different to an Umbrella Company, for more information on how they differ so our article on Limited Company v Umbrella Company
If you are running your own Limited Company, you will need a limited company accountant to help you administer your accounts and manage the responsibilities involved. There are also specialist business advisors that can work with you and support you to minimise the administration burden but the ultimate responsibility will rest with you.
Further consideration should be given to the necessary insurance, including public liability and professional indemnity insurance. Your policy should include retrospective cover, so you are protected from the day you start trading. If you cease contracting then it is recommended that you are covered for at least 12 months afterwards, in case a claim is made against you. As a minimum, you will require business use insurance for your vehicle and property, and contents insurance for your business property (if applicable).
You should also investigate banking solutions so you can open a Company bank account, separate from your personal bank account, in your Company’s name. You may wish to consider additional services such as loan and overdraft facilities and a savings account where you can invest the money you allocate for VAT and tax purposes.
