When you start running your own business or even if you have been running it for many years we’re sure you have a lot of questions.
When you start running your own business or even if you have been running it for many years we’re sure you have a lot of questions. To help you out, we’ve put together the following FAQs from questions our clients have asked us in the past. Have a read through – if you can’t find the answer you’re looking for, simply give us a call on 0845 834 0264 or drop us an email at email@example.com.
What is best for me - sole trader or limited company?
There is a simple rule – if you are planning on running your business for more than 6 months, or it is your aim to run your business for the foreseeable future (this is the vast majority of people) then generally speaking the Limited company route is the best way to go. The sole trader route is great if this is just an interim project you are taking on before going back to full time employment.
However, as everyone’s circumstances are different we advise you have your individual needs and requirements reviewed first which is of course completely free
How do I switch from sole trader to limited company?
You can switch from running your business as a sole trader to your own Limited Company in no time at all. All you need do is:
- Fill out our join The CMJ Accountancy service form
- We will form a limited company for you
- We will help you open a limited company business bank account.
- We will undertake the incorporation work moving your business from being a sole trader to the new limited company.
Now you can run your business through your limited company.
If you have any further questions on this, please call us on 0845 834 0264 or email us at firstname.lastname@example.org.
Is there a lot of paperwork involved in running a limited company?
Paperwork will take no more than 30 minutes to 1 hour per month. This includes sending invoices, recording expenses and paying HM Revenue and Customs. It can take even less if we do your bookkeeping for you. All you do is post us a copy of your sales invoices, expense receipts and bank statements and we do the rest.
What expenses can I claim?
You can claim anything that is wholly and exclusively for the purposes of your business. This includes numerous things such as accountancy fees, business travel, postage, insurance and salaries.
Take a look at the Expenses pages of the Knowledge Centre for more information.
What if I decide to stop running my business?
This is not a problem, we can simply close your limited company or make it dormant. If you are a sole trader then we will de-register you as being self-employed. We will help you understand what’s best for you if the situation arise.
Is there a particularly good time to form a limited company or become a sole trader?
Any time is a good time. It makes no difference which month or at which point in the month you form a limited company or become a sole trader.
What are dividends?
Dividends are just a distribution of a Company’s profits to its shareholders. You do not have to pay National Insurance on any dividend payments and so this is a very tax efficient way of receiving income. Sole traders can not pay dividends, only limited companies.
How often can I pay dividends?
Dividends can be paid as often as you choose as long as your limited company is in profit; we will help you to understand this. You need to leave enough money in your company to ensure you can meet your tax obligations which we will calculate and explain as well.
How do I form a limited company, does it take long and when can I start to pay myself?
You can form your limited company in five minutes through our website and your company is usually set up within a few hours. If you are joining The CMJ Accountancy service then there is no fee otherwise there is a one off fee of £75.00 plus VAT.
As soon as your business bank account is open you can receive payment from your clients. You can then transfer money from your business bank account to your personal bank account each month, or whenever you like. We will help you to understand how much you need to put aside for tax and what expenses you can claim.
What insurances will I need?
This is completely up-to you but you’ll probably need:
Professional Indemnity Insurance which costs around £155 per annum depending on what you do. This provides financial protection for you and is designed to meet the cost of defending claims made against you.
Public Liability Insurance which costs around £105 per annum. This protects you against third party claims for injury or damage to people or their property.
Employer’s liability insurance if you employ just a single member of staff then by law you must have this policy in place.
All of the insurances above are claimable expenses through your business.
Am I tied into a contract with CMJ Accountancy?
There are NO entry fees, exit fees or tied-in periods you simply need to give us one months notice if you intend to leave, this ensures a smooth hand over period.
How do I appoint CMJ Accountancy?
Appointing CMJ Accountancy couldn’t be simpler and takes just 5 minutes! Either fill out our online Join The CMJ Accountancy Service form or call us on 0845 834 0264.
This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.