Limited Company - FAQs

 

You should work through a Limited Company if: 

You earn over £25,000 per year, or £100 per day

You want to maximise your take home pay and minimise your tax liabilities

You are a career contractor or expect to be contracting for an extended period of time

You want to work for yourself and take responsibility for your own finances

You are happy to determine IR35

 

You should be aware that:

You are responsible for invoicing and maintaining accurate accounts

You may need to arrange insurance in order to work for clients

There is additional administration involved, compared to working through an Umbrella

 

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You should work through an Umbrella Company if:

You earn less than £25,000 per year, or £100 per day

You want to minimise administration and paperwork

You are only contracting short term or don’t know if you will continue to contract

You want to be employed, with the employment rights that includes

IR35 does not apply

 

You should be aware that:

All income is subject to PAYE tax and NICs, and your take home pay will be lower

The Umbrella Company makes its profit by taking a margin from your invoice value

Only very limited expenses can be claimed through an Umbrella

 

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A limited company is the most tax efficient way to work, offering returns of 75 – 80 %.

Sidekick offer both Limited and Umbrella services, and our advisors would be more than happy to discuss the options of both with you. Get in touch for more information.

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Before you can form a Limited Company, you will need to choose a name! Many people find this the hardest part so below are some tips when coming up with a company name:

• Don’t Use your own name. It makes the business look small and ties the business and operations to you. Future sales and restructuring can leave your name and reputation tied to something you no longer control.
• Keep it professional. Puns and wordplay may be frowned upon in the corporate world.
• Think about the web domain and email addresses, there aren’t many short domains available but no one wants to email something too long, so keep it short and sweet.
• Do your research, google the name, check companies house, trademarks and copyright.
• Business is more global than ever, putting a city, region or country can be very limiting so try to keep it generic.
• The name must be available. This one should be obvious but as a Limited Company name is protected, If the name is already in use, it’s off-limits.
• The name cannot be too similar to another.
• Avoid protected or ‘sensitive’ terms. You can’t use terms like “Accredited” or “Institute” in your company name without written permission from the government or appropriate regulatory body.