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Currently a VAT registered sole trader but need to limited ASAP (this week) for a contractor job. Can't get hold my accountant so either seems to be do it myself or use one of the 3rd party online services that offer a quick turn around (spotted one in Bristol).
Concerned with the latter they will tie me into something that will give me grief when I try to get full control but concerned with the former I will mess something up.
Seems simple enough to DIY, I assume I just assign a single £1 share to me at the moment and transfer my VAT registration? Was just going to use my surname as I can't think of anything imaginative, checked with companies house and it is available which is no surprise.
I set up a Ltd with one evening of research and one on line. (Currently dormant) add a business bank account and you are good to get rolling. Sort the other details out with your accountant when you can. Contact them.
Just use the companies house website. It is well explained. No need to pay someone to fill out a form
that is what I thought. Everything seems to be on there including models of the Articles of Association. The share thing just confused me a bit.
Yes, easy peasy. Model articles are your friend. Transferring the VAt will be the complicated bit, and then probably just a form to fill in. Andyl Contracting Ltd or whatever, you can always use a trading name later if the urge strikes.
You might want to consider 100 shares - but only if there's a possible need for subdivision later (i.e. a partner receiving a dividend)
No plans to divide, just put 1 share. I assume I can break this up into more shares later on?
Transferring the VAt will be the complicated bit,
Its not a case of transferring it - you'll need to just register the new company for VAT and it'll be a new vat account and new VAT no. Creating the company is the quick bit - waiting for getting HMRC stuff set up takes a bit longer, especially as you have to wait for government gateway things to come via post to start the process. HMRC are a bit slow getting a Tax Ref number to you too if thats required by anyone you're invoicing.
So if you're in a real rush setting up for new work a hang up will be that you can't invoice with VAT until you've got the HMRC stuff up to speed.
should I do 100 share at £1 each and say £100 is unpaid and then when I get the business account stick £100 in so at least there is some money there?
I got the understanding I could transfer my VAT here: https://www.gov.uk/business-legal-structures/change-business-structure
maybe not then. Seems a bit silly as I don't want to be personally VAT registered anymore if I am now setup as ltd.
Actually yes, I MAY have to cancel and re-apply. Not a huge issue to start with as I will be invoicing monthly I guess so it will either be through in time OR the first invoice will be without VAT and I won't be going over the VAT threshold any time soon.
The reason I was VAT registered as a sole trader was I spending >£30k on parts and equipment and only working for VAT registered companies.
I got the understanding I could transfer my VAT here: https://www.gov.uk/business-legal-structures/change-business-structure
I wish I'd spotted that page when I did my switch! Wasn't a big deal for me to close one and start the other as the work I was doing at the time wasn't compromised by not being able to invoice for VAT
maybe, maybe not. We will see.
Just changing to 100 shares at £1. Seems to be a common way to do it.
Yeah, 100 at £1 was the way we went, but there are two of us.
Seems pretty common, and easy enough to do, as in not actually any harder than 1/£1.
I think there might be a slight advantage to actually putting £100 of your own money in, to buy the shares (i.e. so it's real, not a debt). I can't quite remember why now.
On reflection, the VAT issue might be minor - if you don't expect any great expenditure, you could just start off then register as the need arises. You can back date a chunk of claim too (as you maybe know already). It would depend on who you are contracting to, and the expected longevity of the arrangement.
VAT shouldn't be a worry. Your new company can't charge VAT until the reg comes through but can claim back stuff prior -
4 years for goods you still have, or that were used to make other goods you still have
6 months for services
That should be enough time for HMRC to sort themselves out.
https://www.gov.uk/vat-registration/purchases-made-before-registration
Get the accountant to have a look asap.
My folks sold the goodwill to the Ltd company which was a great move. Very tax efficient way of transferring funds out of the company. Depending on the business.
IANAA though.
Why do you need to set up your own ltd company? - can't you sign up with a service company than raises invoices, handles VAT and payroll. Especially if you're in a rush - then sort out the ltd company at you're leisure.
I did 1 share of £1 🙂
Filled in the online form during lunchtime, company was incorporated before the next morning.