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0330 124 4675
Office Hours: 9am to 5.30pm

Do I need an accountant to set up a Limited Company?

You are not legally obliged to use an accountant when you want to set up a limited company, but it’s a good idea to do so. It can be a complicated process, and there is a risk that mistakes might be made when you don’t have the guidance of someone with the appropriate expertise.

In this article, you’ll find out the benefits of asking for an accountant’s help and why you should think carefully about hiring one to set up a limited company.

A wide range of support

Most people do opt to use accountants when they want to set up a limited company. Accountants serve a host of purposes, so if you need someone to do your bookkeeping, register your company with the relevant tax departments and look after your accounts, it makes sense to get them to help you register too. An accountant can set up and run your payroll, make sure you are compliant, register you for VAT, PAYE and corporation tax and handle correspondence from HMRC on your behalf.

Dealing with HMRC

Dealing with the tax authorities can be challenging, so it’s a good idea to get experienced professionals to do it on your behalf so you can focus on other priorities. Accountants know how to submit information correctly and understand the law, minimising the chance of an error. They can also provide you with advice on claiming expenses, declaring dividends and give you access to pioneering and vital accounting software that ensures you have access to the bigger picture, providing the financial clarity that you need.

Complying with accounting standards

If you do decide to set up a limited company and look after your own accounts, you must comply with GAAP rules. GAAP stands for Generally Accepted Accountancy Practice, and following it ensures you are running your business lawfully. You will also need to ensure the information needed by HMRC is submitted accurately and on time to avoid tough penalties. Those fines can have a big impact on your finances and could force your business to close down if money is tight, so it’s always best to check you are doing what is expected. Looking after your own accounts can be time-consuming, and it can take your attention off doing other things. Going it alone can cost a great deal compared to hiring an accountant who can complete these tasks on your behalf. Working with one could save a considerable amount of time and money.

The benefits of becoming a limited company

Let’s take a look at some of the reasons why people decide to form limited companies in the first place.

You have more protection if something does go wrong when you are acting as a limited company rather than a sole trader because your personal and company finances are separate. Since the late 19th century, the law has treated limited companies and the people that run them as different entities. When you enter into an agreement with a supplier or client, the contract is between them and your company as opposed to you as an individual. If a sole trader’s business fails, then they are responsible for the debts accrued.

Possible tax savings

Another reason for setting up a limited company is that you may be able to make tax savings. By paying yourself in dividends as opposed to a sizeable salary, you can reduce a tax bill. Operating as a limited company can also make you appear more credible and help you win new clients, including bigger-name ones. You will be perceived as significantly more credible once you have set yourself up as a limited company. Indeed, some businesses refuse to work with companies that aren’t incorporated.

How much does it cost to set up a limited company?

Setting up a limited company isn’t as expensive as you might think. It won’t cost you thousands of pounds, and the benefits can be considerable. However, mistakes are far more likely to be made when you have no experience of what is required, so it does pay to call one the support of someone well-versed in the area who can also help you with many other tax and accounting-related duties.

More access to finance and brand protection

The benefits of forming a limited company don’t end there. You may also find it easier to source finance once you have set up a limited company and will also get legal protection for your company name, which means nobody else can use it. If you are a sole trader, there is nothing you can do to prevent others from using your brand name. It will also be easier to transfer ownership of your limited company if you do decide to move on from the business, retire or pass away.

Contact us today

At OneClick Accountant, we can help you set up a limited company in no time at all. The process can even be concluded within one day. In fact, the vast majority of applications are approved by Companies House in just a few hours.

Not only can we get your company registered, but we can also deal with HMRC on your behalf, give you advice on the best way to structure your company, help you appoint directors and make your limited company as tax efficient as possible.

We are waiting to hear from you right now if you are interested in setting up a limited company and need to make sure that everything is carried out in an appropriate and compliant manner.

If you would like to find out more about our limited company formation service or if you have some questions that you would like to ask a member of our team, please feel free to contact us today.