limited co

PSC stands for Personal Service Company, it is also sometimes referred to as a limited company.

If your assignment is deemed to be outside of IR35, you may be able to pay yourself a small salary and withdraw the remainder of your income as expenses and dividends. This is much more tax efficient than income being taxed as PAYE. You are also in control of when you pay yourself allowing for further tax planning.

We provide you with access to FreeAgent which is user friendly and provides you with all the accounting and financial tools required. Access is via your giant personal portal.

IR35 is legislation introduced by HMRC to help determine whether someone works like an employee of a business or as a contractor in business for themselves. It looks at a variety of factors including your contract and working practises.

If you are operating as a genuine business then you are deemed to be outside of IR35 and as a result, you can pay yourself low salary, expenses and dividends which saves you tax and national insurance. If you’re inside IR35 all income is subject to PAYE taxes. Please note if you thought that most of your assignments will be inside IR35 then the umbrella option may be more suitable.

Your hirer decides your IR35 status, unless they are a non-public small or medium sized company in which case you decide.

A dividend is a profit-share payment made from the post-tax profits of a company, to the shareholders (owners) of the company.

Dividends are generally a more tax efficient method of withdrawing money from your limited company, as they are taxed differently to salary and are not subject to employers national insurance.

Yes, your giant accountant will prepare your quarterly VAT Returns on your FreeAgent account, and file them online to HMRC and give you the correct instructions on how to make the necessary payments. Prior to submission, we will keep you informed of each stage of this process.

If your company income is over £85,000 per year, it is compulsory for you to be VAT registered however if your company income is below the threshold, it is optional. Your accountant will go through the different VAT options you have for your limited company.

You will need to set up a bank account in the name of your limited company. This is because your company is a separate legal entity and your personal and business finances are kept separate from one another. You can choose your own preferred bank, or we can put you in touch with ones that we partner with.

Yes, giant can set up a limited company for you within 24 hours, you just need to come up with the company name and we will take care of the rest!

Yes, your salary will be run once a month and a payslip will be generated towards the end of each month detailing your net salary and any PAYE liabilities you need to pay to HMRC. The payslips can be found on your company's FreeAgent account which your giant accountant will prepare for you on a monthly basis. 

Yes your company’s annual accounts - called ‘statutory accounts’ - are prepared by us from the financial records at the end of your accounting year. Statutory accounts include: a ‘balance sheet’, which shows the value of everything the company owns and is owed or owes on the last day of the financial year; a ‘profit and loss account’, which shows the company’s sales, running costs and the profit or loss it has made over the financial year; a director’s report; and notes about the accounts.

As a company director, you will be required to file a personal self-assessment tax return each year, giant will prepare and file this for you. This may incur an additional fee if there is income not related to your limited company.

You can start trading through your company via your FreeAgent account by billing your client for your services on a weekly or monthly basis. An invoice template can be found in your FreeAgent account together with simple instructions on how to create and send an invoice to your client. The knowledge base section in FreeAgent is packed with tutorials and videos that can help you perform these tasks and others.

If your assignment falls outside of IR35, you may be eligible to claim a large range of business expenses such as business travel, secondary accommodation, subsistence etc.

You can claim via the accountancy software provided by giant on your online portal and then reimburse the total expenses value to yourself monthly from the funds held in your business bank account.

As a director of your limited company, you have two pension options. You can either chose to contribute to a company pension or a personal pension. We can put you in touch with a financial advisor who can discuss the best option for you and your company based on your circumstances. To find out more, please call Humphries on 0208 390 9055 to speak with one of their Independent Financial Advisors

You may not be able to operate through a limited company or be a director of any other company, if you have been declared bankrupt and your bankruptcy has not been discharged.

No, giant can only assist you with setting up a company registered In the UK.

A contract ending has no impact on the limited company, it continues to operate as a business. However, if a contract comes to an end and there are no further contracts in the pipeline, you generally have 3 options:

Dormancy: If you plan to take a short break from freelancing, you may want to consider making your company ‘dormant’. This is a temporary suspension of some services, but the company remains on the Companies House Register as a trading company and all returns still have to be filed. The advantage of putting your company into dormancy is that the company remains there and ready to use when you need it and the company bank account is already up and running. 

Striking off: Your second option is to wind the company up by collecting all your debts, paying off all the creditors and taking all the remaining money out of the company by way of salary expenses or dividends. The winding up process includes de-registering for PAYE and VAT and applying to have the company struck off by the registrar of companies. As your accountants we can do this for you. The process usually takes up to 3 months.

Members voluntary liquidation: Finally, your third option is to undertake a member’s voluntary liquidation (MVL). There are significant tax benefits for taking this option.

If your company has a minimum net asset value of £25,000, normally represented by cash, and you meet certain conditions, then it can appoint a liquidator to formally close the company. 

Unlike the striking off process under option 2, where any income you take out of the company is subject to income tax, monies distributed under an MVL are subject to capital gains tax and in most cases you can benefit from entrepreneurs relief where the tax rate is only 10%. Tax savings can range from £10,000 through to £35,000 where net assets are above £100,000 in the company. As your accountants we can arrange for an MVL for you.