Why go limited? – Revisiting the limited company option.If you are reading this, chances are that becoming a freelancer has crossed your mind before. If you feel that you have the skills and experience to strike out on your own, but never got around to it, this may be the time.
We are not going to claim that this move is completely risk-free, but if it turns out to be the right move, the rewards can be very attractive. In this blog, we are revisiting why you should do it and how MyAccountant can help. It may seem like a daunting task to get the ball rolling, but it doesn’t have to be.
Although it’s perfectly possible to freelance as a sole trader or partnership, a large proportion of freelancers prefer to set up a limited company.
Here are the main advantages of choosing a limited company trading vehicle:
Agencies prefer to deal with Ltd companies, so you will have increased potential by incorporating (also, this may be your opportunity to create your own brand).
- Limited liability and lower personal risk (financial protection).
- Business freedom – you will be able to take on as many different contracts/revenue streams as you like.
- You are in control as to how you pay yourself, thus maximising tax efficiency and retaining more of your earnings.
- There are numerous opportunities for saving tax, such as an occupational pension scheme and R&D tax credits.
Of course, operating a limited company comes with increased responsibility and additional administrative burden. It is therefore essential that you chose your accountant wisely, as you will need an advisor who is there every step of the way.
These are some key aspects of operating through a limited company, through which we can guide you:
- Incorporation – the very first step: we offer this service at no cost to you.
- Rules and regulations; increased reporting and administration – your dedicated accountant will ensure that your company meets all deadlines, whilst taking the admin burden off your shoulders.
- IR35 Legislation – we can answer all your questions and have an IR35-specialist affiliate, who has the knowledge and expertise to give you complete peace of mind.
- VAT – there are a number of advantages of becoming VAT registered as a company, one of which is a potential increase in your take-home earnings. We are here to help you register and choose the right scheme to use.
- Self-Assessment – If you are incorporated, you will need to submit a tax return – which our dedicated Personal Tax Manager is here to assist with.
If after reading this you feel that this could be the right move for you, why not give us a call on 0800 917 9100 and have a non-obligatory chat? We can even prepare an Earnings Retention Illustration, based on your own figures. You really have nothing to lose, and if it turns out that the limited option is not the best for you, we can advise you on using a PAYE Umbrella scheme instead – provided by our sister company, SmartWork.