Frequently Asked Questions
What business insurance do I need?
As a contractor, it is essential to obtain the correct level of cover to protect yourself and your limited company. Business insurance requirements can usually be found within the service agreement contract. As a director of your own limited company, it is vital that you check all contractual obligations in regards to insurance and ensure the level of insurance you have meets the demands of each assignment.
The usual requirements in regards to insurance are as follows:
- Employers’ liability insurance
- Public liability insurance
- Professional indemnity insurance
Where can I obtain business insurance?
There are many insurance providers available; however, we are able to recommended an insurance provider to our clients. We have complete confidence in our preferred supplier and their expertise and comprehensive cover, which has provided a safeguard for our clients for many years.
When are my annual accounts due?
Annual accounts are due for filing at Companies House nine months after the end of your company’s financial year, but we prepare them in good time to calculate your Corporation Tax liability. They are submitted electronically on your behalf.
Will I be informed when my tax is due?
We will endeavour to give you as much advance notice as possible, providing you let us have all the relevant information in good time. You then simply need to make the relevant payment to HM Revenue and Customs.
Will you complete my self-assessment form?
If you are a director of a limited company you are required to complete a self - assessment tax return. MyAccountant can assist you with completion of this. Please contact us for details on our fees.
Do I have to file any other forms?
You will need to file a company’s annual return at Companies House together with the applicable fee. Our Company Secretarial team will prepare this and file it for you.
How does the invoicing process work?
Simply submit your time sheet (and any re-billable expenses) to invoice@MyAccountant.co.uk. If we receive this before our 12pm cut-off, then we will raise an invoice with your agency/end-client the same day. If received after this time, then it will be raised the next day at the latest. Once your agency/end-client receives this and runs payroll, they will pay the gross earnings directly into your business account.
How will I know when the invoice has been sent across to my agency/end-client?
You will be copied in on the invoice e-mail that is sent to your agency/end-client, so will be notified as soon as it goes across. Consequently, if you need to chase payment for any reason, you will have the e-mail for reference
How long does it take for an invoice to be paid?
This is dictated entirely by the schedule on which your agency/end-client run their payroll and can therefore vary accordingly. Therefore it is best to check with them for an accurate time frame as to when your invoice will be paid.
What expenses can I claim?
A wide spectrum of tax-free expenses can be claimed via your limited company. Please refer to the Expenses Guide for examples.
If I use my home for maintaining my business records, can I claim an expense via the limited company?
As there is only minor use, the Inland Revenue would allow a small claim (£4 per week).
If I use a room at my home for business use, can I claim an expense via the limited company?
Generally speaking you can only claim the additional cost incurred as a result of working from home. As this area is quite subjective you should contact your Accounts Manager for more information.
How does a director determine how much salary to take?
A director will decide how much to pay themselves based upon their own personal circumstance and needs. This should be discussed with your Accounts Manager.
Will I receive a monthly payslip?
Yes, we will issue you a monthly payslip, which clearly shows your net salary to draw to your personal account.
What are dividends?
A dividend is a distribution of company profits to its shareholders, in this instance yourself. National insurance is not charged on dividends, which is one reason why they can be a tax efficient method of remuneration.
How do I pay myself dividends?
MyAccountant will produce management accounts for your limited company showing how much profit is available for possible dividend distribution. You should then advise MyAccountant.co.uk in writing as to how much you wish to take, and draw the amount to your personal account.
How much dividend can I pay myself?
As above MyAccountant will advise you as to how much profit is available as a possible dividend. It is important to note that money should be set aside to meet your tax liabilities before drawing a dividend.
Do I have to register my company for VAT?
You are obliged to register for VAT if your gross turnover exceeds the threshold of £83,000 (as at 1 April 2016) over a rolling 12 month period. However you can choose to register below this threshold, voluntarily.
Why would I voluntarily register for VAT?
The advantages of registering for VAT are that you can reclaim the VAT on any VAT-able business expenses incurred. The disadvantages are that you would have to charge VAT on your sales invoices and pay this over to HMRC. There are different VAT schemes available to register on, some of which will result in increased profits. MyAccountant can advise which VAT scheme is right for you.
How long will VAT registration take?
VAT registration usually takes less than a week.
What is IR35?
IR35 is a piece of legislation introduced by HM Revenue and Customs in 2000, which was implemented to prevent contractors who are effectively employees of their clients benefiting from the tax-savings of operating via a limited company.
What does it mean for my limited company?
Any contractor deemed to be caught by this legislation will be liable to full taxation on their dividends, thus negating the primary tax benefit of operating via a limited company. Consequently, it is imperative that you review the IR35 position of each contract that you undertake.
Do MyAccountant.co.uk offer contract reviews?
We are unable to provide any legally binding judgements, however if you require the latter, MyAccountant can recommend one of its specialist partners, who are able to provide a comprehensive IR35 advisory service.
Recent HM Revenue and Customs guidelines state that those affected by IR35 should exercise “reasonable care” in establishing their tax position and could be liable for an increased penalty regime if they do not take the necessary steps to clarify their status. Therefore, MyAccountant recommends that an independent IR35 review be performed for each contract that is taken on.
Do MyAccountant offer IR35 insurance?
The Managed Service Company legislation prevents us from offering any type of IR35 insurance. However, as above, if you require this type of package then we will be able to put you in touch with one of our specialist affiliates. Please don’t hesitate to contact us for additional information.
Will my monthly fees cease if I am not contracting?
Our monthly fees do not stop automatically when your contract ends. This reflects the element of fixed costs that MyAccountant will incur in preparing the year end accounts and company tax return. We will however review charges made in the year to date and reduce the monthly fee where necessary, in order that a minimum annual fee is charged, based upon months worked in the year.