Start Up Connundrum

#1

Hi All,

I am only just starting up, however have registered as a Limited Company as was advised to to limit liability etc. I have only done 5 hours work this year (am on maternity leave technically) and am really not planning on doing much more until I launch in the new year properly.

How hard would it be to do my end of year accounts myself and tax returns? The list that the accountant returned as to what she would do looks baffling and I have never had to deal with tax before, so am worried I will get confused. But she wants about £700 plus more for advice and P11D return etc, so I will be starting 2014 well in the red! Just seems a lot of money for not a lot of money earned this year.

Has anyone dealt with an accountant who charged any less than this - all 3 quotes I had were about the same price?

Alex.

#2

Who on earth advised you to be a limited company??? It’s very unusual to be limited as it’s not like we have masses of stock or equipment which you’d need to protect.

In terms of limiting your personal liability, if something went wrong with one of your jobs, that can be done via T&Cs or a client contract which is a lot cheaper to sort than the extra costs associated with being a limited company.

For a sole trader accounts it’s usually between £300-£600 for annual accounts - double that for a limited company. For sole traders, HMRC tends to do a lot of hand holding and you can go on free courses which they run - I am not sure they do as much for limited companies though?

#3

I went on a course training to become a VA and the advice was to register your name with companies house as a limited company, which I did, although I was obviously naive and didn’t realise the full implications of doing this. It seems a lot of trouble to go to, to secure my name from other business users.

Could I just dissolve the limited company and continue with the name as a sole trader I have been wondering?

#4

My accountant charged me £240 for last year as I didn’t put anything through the books, he charged me £420 the year before for not much.

I am a limited company but that is because if you do any work for the NHS they insist on it. Public sector won’t deal with you otherwise - so it depends who you will be working for.

#5

Ah that is interesting Debra - I have just left the NHS so was going to stay within Healthcare if possible, so in that case I would probably be best leaving it as a Limited company then. Thanks for the tip!

#6

A very valid point Debs - although up here you don’t need to be limited but you do need to carry professional indemnity insurance to work with the NHS/public sector.

#7

That is true Caroline, I have cover through your recommendation re Policy Bee and they allowed me cover for both IT Training and VA work which is great.

#8

They are by far the most flexible I’ve come across - definitely not “off the shelf” policies, they actually build them to suit your business.

#9

Could you make the company dormant until you need it when things get busier? I don’t know what difference this makes to the amount of work involved. £700 for company accounts sounds very reasonable to me! I pay in the region of £1000 for mine, but I do understand that in your position it’s not really feasible.

Sole trader accounts I am sure you would be able to do yourself, but I’ve had a bookkeeper and accountant from the start for my company as I was too scared to make a mistake or forget to do something that might get me into trouble.

Do you know anyone who might be able to help you out on a barter agreement? E.g. do your accounts in exchange for admin work when you come back next year? When I was starting out I did quite a bit of work this way and it was a godsend when cashflow was tight.

I guess the other option might be as you say, to dissolve the company, but that would be a shame if you then decide you want to go limited at a later date - I guess it depends a lot on what your plans are for the business in the long term

#10

Ah - but HMRC do not like you bartering if you are registered for VAT as they would lose out on their cut… And therefore could very well have you up for tax evasion!

From memory there was a website for this which launched over here a few years back and went down in the blaze of VAT investigations…

Just something to bear in mind!

#11

True, but as far as I’m aware, it’s ok as long as you still invoice for it. I use Bartercard and have done for about a year now and it’s brilliant. Picked up lots of new customers and contacts and got some big work done that I couldn’t afford to have done otherwise as I was limited by cashflow. There are loads of big companies that use it and apparently (I know because I asked them when I joined) HMRC have approved them.

My accountant tells me to invoice for all my Barter transactions, and they just invoice me the same amount in return to keep everything balanced.

Also, you can be a limited company and not VAT registered - I’m not quite at the threshold yet (although it won’t be long!) so haven’t yet gone VAT registered.

#12

I am limited but not VAT registered… seems to work ok for me.

#13

Thanks Steph, that is really handy advice - I have read about bartering so will definitely look into that some more.

I have actually made some headway - I’ve been quite assertive and asked people to re-quote based on my situation this year and companies have come back with quite significant discounts provided I do the reconcilliation, which I don’t find a problem. I have a couple more calls scheduled this week and next to ascertain what a couple of other companies can offer me. I ended up putting a tweet out about finding a local accountant!

#14

Try Nicola at
myaccountantonline.co.uk/year-en … rvice.html - she does my year end accounts for one of my companies, is very quick and easy to work with.

Dawn
Dawn

#15

Wow, thanks Dawn - £300 is amazing! That is a great service - thanks so much for recommending! :slight_smile: :slight_smile: :slight_smile:

Alex.

#16

It pays to ask round!