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Setting up as a ltd company

(8 Posts)
KayTee87 Thu 13-Apr-17 14:01:09

Don't know if I'm posting in the correct place. My husband is setting up as a ltd company as an IT consultant. He will obviously speak to a professional but just wondering if anyone on here can give us some pointers:

How to go about setting the ltd company up?
Should he open a business bank account?
Can you pay your tax & ni bill monthly and how do you go about doing this?
He mentioned employing me as his secretary and paying me a small salary (I don't want to go into the next tax bracket and already have a full time job). I would actually be doing some paperwork for him - is this morally / legally wrong as it means he would be paying less tax on his profit?
What kind of things can he claim as business expenses; IT equipment, travel costs, stationery, what about business lunches etc?
Any pension advice? Better with a scheme or isa?
Does anyone know anything about sickness insurance?

Sorry if I sound completely clueless but we've both always been paye.

crabbyoldbat Thu 13-Apr-17 18:01:56

I do this for my partner

Government and HMRC pages are really useful (and readable) on this www.gov.uk/limited-company-formation/setting-up

How to go about setting the ltd company up?
Search online for companies house for info - and there are many companies that will do it for a small fee (<£50) - but read around first, because your start date may be important
Should he open a business bank account?
Yes - keeps things simple - these can take 4-8 weeks to come through, though
Can you pay your tax & ni bill monthly and how do you go about doing this?
PAYE info is due monthly, you have to file monthly returns online, which means you'll need payroll software that works with HMRC software (they have recommendations), or to pay an accountant to do it for you
He mentioned employing me as his secretary and paying me a small salary (I don't want to go into the next tax bracket and already have a full time job). I would actually be doing some paperwork for him - is this morally / legally wrong as it means he would be paying less tax on his profit?
Tax on profit has gone up - there won't be much difference, and if you're doing the paperwork, why not get paid for it? It reflects the true cost of doing business
What kind of things can he claim as business expenses; IT equipment, travel costs, stationery, what about business lunches etc?
Some, but not all, and they may not amount to much - HMRC have the rules (not as clear as some, I'm afraid)
Any pension advice? Better with a scheme or isa?
The company, as an employer, has no choice - it has to set up and offer a stakeholder pension (then the employee(s) can turn it down!) - but you get over a year's leeway before doing this, so no need to think about it yet. From a personal point of view, if he already has a private pension, he can probably decide to continue paying out of his salary, or save in another way.
Does anyone know anything about sickness insurance?
Employees would be entitled to SSP (lower than their wage, usually) - paid by the employer (the company) - this would come out of company profits, before tax. I haven't done it, but there might a way for employers to take out insurance - or maybe its just the cost of being an employer (in fact, when my partner isn't working, he just gets payed his salary anyway, out of the accumulated income in the company, so I'd say our 'sickness policy' is the first 6 months on full pay!)

My main tip would be - always make sure that at least 30% of the income into the company is saved/kept/left alone and there at the end of the year when the tax bill comes in - don't think that the company income is all yours!

If all this sounds onerous, you can pay an accountancy company to do all of it (although company directors remain responsible for it). Good Luck!

KayTee87 Fri 14-Apr-17 15:57:28

Thanks crabby that's good advice.

I've just realised he will need to register for VAT at some point too. I think we will defo get an accountant.

paperbattles Sat 15-Apr-17 09:29:34

What name is he thinking of using? He doesn't need to pay any of the private search business name registers, just check Companies House register. I also suggest a trade mark search, domain name search and a google search to check for Intellectual Property issues. He doesn't have to trade using the same name as the company, but again check IP.

Hoppinggreen Sat 15-Apr-17 10:01:32

Good advice from crabby but with regard to the pension if there are 2 or fewer Directors you just don't have to set one up.
Get an accountant to sort everything out, my DH is an IT consultant and I also consult in a different area via our limited company.
Look out for IR35, especially if he is going to work for Public Sector clients

crabbyoldbat Sat 15-Apr-17 10:09:05

That's interesting, about pensions, hoppinggreen - the Pension's Regulator is currently saying we must set one up (2 directors, 1 employee). Do you have a link/source?

crabbyoldbat Sat 15-Apr-17 10:11:31

Ah, maybe I'm getting confused with automatic enrolment

Hoppinggreen Sat 15-Apr-17 13:40:15

If you have an employee it's different I think, we don't . I should have said 2 Directors and nobody else
The advice was from my Accountant

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