Web Hosting Talk : Other Forums : Web Hosting Lounge : Running a Limited Company UK

[Bakie]

I am about to form a Limited company in the UK and am wondering how much work is there to actually do to keep it running as a limited company? Im sure that there are quite a few people from the UK here that run their own limited companies and am just wondering how much paperwork etc is there to do every year to keep Companies house happy?
My company will probably only make about £1,000 - £3,000 a year so not much money flowing through it, if that makes any difference.
Also the company is just going to be a small IT services company as well as a company that I will run all of my web projects under.

Mods feel free to move this topic if you want but I would have placed it in the "Running a Web Hosting Business" forum but its not a web hosting business so wasnt sure.

[Vortex-Steve]

Basically just general housekeeping. You'll have to get an accountant to do your annual accounts (We pay about £500 for this). The other bits you can do your self online, Annual Return etc just to keep Companies House up to date with Directors etc.

If it's only going to make £1000 in a year you are going to be losing a pretty big chunk of that to the running costs!

[Bakie]

Is it possible to do the Annual Accounts myself or do you need to use a registered accountant?

[elofty]

im sure you can use sage (or similar software to do your accounts) bit cheaper than payin someone £500)

[Dark Light]

Many small businesses I know use Sage or a similar small business targeted software (Sage edition targeted at small businesses) to do most of their accounting. Then, after checking the accounts they may pass it to their accountant to finalize it and file it, though these businesses are processing much much more than £3000 a year, but they are still small.

Depending on if you will be self-employed or not you may have to look into declaring yourself self-employed and paying the respective taxes or national insurance contribution.

You may be able to do all the accounts yourself if you are a Limited Company; though an accountant can advise you on your accounts and related filings if you decide to get one; which can be a big help than trying to learn everything yourself.

Best Regards,

P.S. If I accidentally got something wrong there; please feel free to let me know.

[Bakie]

I would like to do the accounts myself but what are the consequences if I do something wrong?
So I can just use sage and that will be enough for the company accounts?

[Kemik]

I'm fairly certain your accounts must be audited by a certified accountant to make sure your not screwing over the shareholders and for tax reasons.

Either way, your accounts need to be filled correctly otherwise you'll get a pretty large fine as its a criminal offence.

If you do get an accountant, make sure you give them all the information they need because even if they file the accounts late your the one who will be hit with the fine. Not them.

Can I ask why your making the business in to a limited company when generating such low revenue? Why not just keep it a sole trader? You probably get lower taxes.

[include]

I agree with Kemick, for such low turnover its not worth it.

After you've paid your 20% corporation tax, 12% National insurance tax as an employer, and you £500 or so accountancy fees, you then have to pay 10% national insurance tax as an employee plus any additional taxes should you go above your £5k threshold.

The amount you would pay to be incorporated for a year really isnt worth it. I can understand that stating a limited company name rather than yourname t/a company name on an invoice or website is attractive to customers, but your turnover would make it pointless!

Sorry to be so negative, ive worked with companies that have dissolved due to taxes and fees, so i wouldnt recommend it to anybody!

p.s the percentages i quoted were from memory, i may be incorrect!

[Bakie]

Thanks guys. I guess that for now I will not form a Ltd Company. Too much effort for too little good.