Ltd. Company FAQs

A limited company is the most common form of business structure and is characterised by limited liability for shareholders. This means that a shareholder’s liability is usually limited to the amount of their investment in the company. The company is a separate entity for legal and income tax purposes from its shareholder(s) and director(s).

With your own company bank account, you be able to ensure that your company’s money is kept separate from your own and thereby ensuring your company is setting aside sufficient amounts to cover the company tax liabilities.

You can approach any bank to setup your own company bank account. Different banks will have different benefits available such as fees, processing times and user friendly apps. Most banks will allow you to gain access to the live visibility feature through open banking but we recommend checking this with FreeAgent’s list.

You can choose where you have the registered address for the business. Primis offer this as an option to use their address as the registered address as well as the service address.

You will be employed by your limited company as a director. You will not be self-employed.

As the director of a limited company you are able to set yourself a salary (Director’s fee). This can be set at any level because as a director, you are not subject to the National Minimum wages or National Living Wage. We advise a salary of £240 per week or £1,045 per month as these are tax efficient levels that ensure you retain an entitlement to state benefits. In addition to a salary you will be eligible to reimburse certain expenses incurred whilst carrying our work for the business that were paid for personally.

As a shareholder you will also be able to take profits from the company in the form of a dividend.

The will depend if your agency/client is self-billing or require an invoice. They will go through the timesheet requirements on their side with you and then if they are self-billing, nothing further is required as they will then process the payment in line with their payment terms. If however, they require an invoice, then this will need to be generated through the accounting software and send over for them to trigger payment.

You should also be keeping your system up to date on a weekly/month basis with any expenses incurred so that an accurate positon for you and your company liabilities can be advised.

The company can reimburse you from the company bank account with certain cost incurred personally. These might include expenses such as stationary, travel expense and subsistence. To be tax deductible for the company, they must be incurred wholly, exclusively and necessarily in the performance of the duties of employment. In addition to reimbursements the company can pay for expenses direct from the company account. These might include purchases such as assets like a new laptop, subscriptions for software or hotel costs. These are still subject to the wholly, exclusively and necessarily rules for the business. Please see the expenses guideline document that outlines these in more detail.

You can claim mileage for any travel you carry out for the business in your own personal vehicle. You will need to track this by logging the postcodes from and to each time. If you are VAT registered and want to reclaim the VAT element of the mileage then you will need to keep petrol receipts. If you stay away from home for the night then you are able to claim a £5 allowance per night Personal Incidental Expense which doesn’t require receipts. All other expenses incurred should be supported by a receipts and retained or loaded onto the accounting software.

You will have access to a timeline on the accounting software that details each company tax that is relevant and what the period end is for each of these and the payment deadline for each. Providing you keep you information up to date, for each liability you will receive a notification of how much is due, how to pay this, references to use and deadlines. You will then make payment of this direct from the company bank account.

All directors have a requirement to submit a Self-assessment tax return. The system will generate a P60, P11D and dividend summary that will be included on this. If we are completing this as part of the service package you will receive a questionnaire to let us know of any other personal income we are not aware of that needs including.

Depending on the level of income you receive, there may be tax to pay on the dividends you draw from the company. All individuals are entitled to receive £1,000 of dividends tax free, dividends in the basic rate band are taxed at 8.75% and within the higher rate band these are taxed at 32.5%. As you draw dividends across the year, you will need to personally set taxes to one side ready for the tax year end.

VAT registration is compulsory if your company turnover exceeds £85,000 in a rolling 12 month period. You can choose to register on a voluntary basis before this if you want to.

If you registered the company for VAT, you will be required to add an additional 20% to your daily rate that is then payable onwards to HMRC by your company after it has deducted any VAT spent on expenses. This is the VAT accounting for the standard rate scheme.

You will be given a dedicated accountant that you can arrange a call with or email in with any queries you have on the process or in general.