If you are thinking of contracting for less than three months, you should think about setting up an Umbrella company. If you are thinking of contracting more than three months, a Limited company is the most tax efficient way of working. Please see the Ltd. vs. Umbrella on our website.

To summarise the new IR35 legislation is in place to stop "disgused employment". To read the full details see our IR35 guide. We will be happy to review your contract for IR35 pitfalls completely free of charge.

One Day

Within three days of forming your company DNS will post the appropriate limited company paperwork to include Memorandum and Articles, Certificate of Incorporation and your DNS Contract Please see our New Client link.

DNS will help you open a company bank account.
We will send you the company bank account application form.
you will Submit proof of your ID and proof of Address to any Branch of HSBC.
DNS will set up your company bank account at HSBC.

Setting up a company bank account takes 24 days from the date of receiving the company formation form.
The process of setting up a company bank account Involves company formation and other formalities such as VAT Registration and Payroll Registration with Inland Revenue. Please see our inland revenue. Please see our new client process.

Send us your completed company formation form

Sign and send us the company Bank account form and form 64-8 along with your DNS Contract and standing order form (all paperwork will be posted to you by DNS)

Submit proof of yourID and Address to the Bank and DNS Associates.

DNS will be in touch with you as and when required. We can assure you that we will take care of all the aspects of your Company. All we ask is that you send us the information we request as soon as possible. For further details please see our New-Client Work Schedule link our client work schedule.
It is important you start reporting your income and expenses on DNS's online accounting software Full training is provided by our DNS.

This Blue Form is known as a CT41G

The CT41G is used by us to inform the Inland Revenue that you have started trading. Trading starts once you have raised the first invoice.

Please sign CT41G and forward it to us and we will do the rest.

It is important that you send us all paperwork relating to your accounts. Please send it to us by post, fax or scan it and email it to us

 

When we receive paperwork fromyou we will deal with it immediately and let you know if wew need anything further from you.

It depends on which service package you choose. Please see DNS service packages.

Please see the DNS article expenses you can claim . You will be fully trained on this aspect of your business by our Online accounting trainer.

We will keep you informed of every opportunity to claim expenses through our monthly newsletter. Why don’t you subscribe for DNS monthly newsletter now?

There are four types of tax:

Tax and NI - This is the tax you pay on your wages. Tax and NI are Payable on the 19th of every month if any tax is due. in most instances there is no liability. We will inform you if there are taxes to be paid

VAT - This is a tax on Sales Invoices. It is payable every quarter and we will inform you when it i due

Corporation Tax - This is a tax on company profit. This is paid 6 months after the year end date. This means you will pay corporation tax 18 months after you started the company.

Self Assessment Tax - This is a tax on Dividend income from the company (if there is any). It is payable every year by 31st January. We will inform you about this tax when and if it is due.

To understand the whole process, please check the client work schedule

If you do Online Accounting, all we need are your bank statements. You can fax or post these to us.

If you do not do online accounting then we will need Bank Statements, sales invoices and expenses sheet..

When we do year end accounts we need to check your receipts. So you only need to send us receipts once a year.

You can claim food expenses between £5 and £9 per day without submitting receipts depending on the number of hours you spend at work. Some people find it useful to keep their own records.

You can claim amileage allowance of 40 pence per mile for the first 10,000 miles and 25 pence per mile on any miles over 10,000. These mileage limits are annual and we do not, therefore, need fuel receipts but we do need you to keep a meticulous mileage allowance record. We don’t need Fuel Receipts.

 

Please download our mileage sheet (hyperlink) for keeping your mileage allowance record.

You take out Wages, expenses and dividends from the company every month.
Our online accounting software will work out the values for you.

We recommend that tax money is deposited in a company savings account and not used for personal purposes. Spending tax money can create future cash flow problems.

Yes you can claim a laptop as an expense if you have bought it for business purposes.

You can pay wages to your spouse but they should be appointed company secretary or given a contract of employment.

If this is a business travel then you can.

If you are thinking of buying a car with Co2 emission less than 110gm/Km then it is definitely worth considering buying a car through your company.

If you are thinking of buying electric or hybrid car it is still worth considering.

If you are considering buying a car that does not fall into the above two categories, it may not be tax efficient to buy through the company. We strongly recommend you contact us so we can advise at you personally.

It depends on your objectives and we suggest you to contact us to discuss your options further.

No, you don’t pay any taxes on them. The amount we advise is fully covered by rent a room relief allowance.

, you don’t pay tax on mileage allowance received from the company. The amounts of 40p for first 10000 miles and 25p over 10000 are fully exempt from taxes.

It is not mandatory to get the PI insurance but we always advise client to cover themselves due to the nature of work and risk involved. Professional Indemnity insurance covers against any claims made against you for damage to client due to contractor’s negligence. All contractors carry financial risk if they do not get PI insurance. Also some agencies insist on it and is mandatory requirement. Even for the purpose of IR35 it makes your position more stronger as an Independent contractor. Buy Professional Indemnity insurance here.

We suggest that you stick to the values provided by our Online Accounting software. If for any personal reason you don’t want to withdraw the amount suggested by our software then please discuss with us.

We suggest £500 per month to cover your personal allowances and therefore no tax and NI. In terms of tax planning using this practise we get maximum returns. In some cases when you form the company in the middle of the financial year and you have already used your personal allowance we suggest no wages till the end of financial year. Being a director you are not classed as an employee of the company and therefore national minimum wage legislation will not apply to you.

There are 2 kinds of Pension - Basic pension and Secondary pension. As a director even though you are not paying tax and NI you will be entitled to basic pension. It is treated for pension purposes that you are paying taxes and NI at NMW. Secondary pension depends on your NI contributions and in this case depends on overall working life. It will affect your secondary pension but its much better not to pay tax and NI towards secondary pension through employment for tax efficient planning.