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Guidelines for Expense

Umbrella Service Sheet

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NoPalaver Accountants will set up a company for you, if you do not already have one. There is a small, one off fee for this. What we will do:-

  • Arrange for the company to be formed at Companies House.
  • Advise on an appropriate share structure to provide maximum tax efficiency.
  • Register the company with the HM Revenue Customs and Excise.
  • Set up a PAYE scheme for the company.
  • Register the company for VAT.

You will be the director and shareholder of the company. In certain circumstances, it may be beneficial for your spouse or partner to also be a director and/or shareholder. This will be beneficial when their income is less than about 9,440 per annum, or if your income after expenses is greater than 41,450 per annum. If either of these situations applies to you, please let us know so that we can advise further.

Alternatively, if you already have a limited company and would like us to become your accountants, we will be more than happy to do this. We would need you to notify us of the contact details for your current accountant, if you have one, so that we can write to them for any information that they hold. We would also ask that you send us copies of any paperwork that you hold for the company for example, Certificate of Incorporation, VAT certificate.

We recommend that the company is VAT registered, using the flat rate scheme. This is likely to provide you with additional income of a few hundred pounds as compared to not being registered and is a simple method of accounting for VAT. The amount of VAT you have to account for is purely dependent on the company's income, not on individual payments.

Forming part of our complete service to you, we will prepare the quarterly VAT returns on your behalf and file them online.

In normal circumstances, we recommend a salary be paid to you from the company of around 7,696, per annum, which is covered by your personal allowances. If you incur genuine business expenses in undertaking your contract, e.g. travel expenses, these can be claimed back from your company without any tax or national insurance liability. Whatever is left after your salary (and your spouse or partner's salary if applicable), business expenses, and other costs (including our fees), is the profit of the company. After deducting Corporation tax on this at 20%, the balance can be paid to the shareholders as a dividend. This is a tax and national insurance efficient way of you taking money out of the company there is no tax or national insurance on the 7,696 salary, nor on the expenses and there is no national insurance on dividends. Therefore, the only tax incurred would be the 20% Corporation Tax on the profit.

You will need to open a bank account in the company name, and notify your agency of those details so that they can pay the money under the contract to that account. We recommend that you open the account with the same bank that you hold your personal account with. This will then mean that you can pay yourself from the company by telephone or internet banking as an instant transfer. In addition, it may make opening the account easier as you are already known to the bank.

If you could arrange for duplicate bank statements to be sent to us, or send us copies yourself, we will be able to keep an eye on the bank transactions and make sure that our records reflect those transactions.

Please contact us to speak to us straight away or request a callback.