The best date to form your company is a week or two before starting your first contract. This way you can have the relevant insurances in place and just as importantly (if not more so) have the company bank account opened ahead of your first invoice being paid.
The idea that it is best to start a company in early April is a common misconception, although it will make working out how much you personally draw from the company a more straightforward calculation.
That said, the closer that we are to the end of the tax year, on the 5th of April, the higher your earnings in that year are likely to be. This means that any dividends taken from the company before the 5th of April could well fall immediately into higher rate tax.
There are then two options: if you have already reached the higher rate tax threshold and can afford to, it is a good idea to leave the funds in the company until the new tax year starts, when your tax allowances will start again. The second option is to withdraw the dividends; you will then have to pay higher rate tax on those dividends but this is ordinarily cheaper than paying umbrella company taxes; this important piece of tax planning should be considered before your contract starts so please contact us without delay.
Why Integro Accounting?
Integro Accounting is the UK’s only specialist provider of fixed fee, limited company accountancy services for contractors, consultants and freelancers that was established to an award winning standard – our Practice Manager, Maria Hickmott FCCA, won The British Accountancy Awards’ ‘Accountant of the Year’ in 2011.
We were set up with the vision of providing a service that is the ultimate for the dynamic, busy professional of today in a language you understand.
Integro Accounting have designed a bespoke service for the contractor who is always on the go; never forgetting that one size will never fit all.
The relationship you have with your accountant is the most important factor in our service which is why we will always offer unlimited contact with your own personal accountant; whether that contact is via the phone, email or face to face.
We have our 3 offices located in London, the South-West and on the Bedfordshire and Buckinghamshire border. There are also meeting locations in many of the major cities and towns across the Home counties, South-West and South Wales, all conveniently placed so that you never have to travel far to meet your accountant.
If you have any questions about contracting or would like to find out more about how Integro Accounting can help you and business please call Christian on 01525 303984, email email@example.com or request a callback.