subject: Why Form A Limited Company [print this page] If you are thinking about setting up your own limited company, then there are certain factors that you need to consider.
The majority of workers within the United Kingdom pay their tax by Pay As You Earn scheme (PAYE). This is where the employer takes out tax and National Insurance from your wages and then pays you what is left.
If you do not want to take a full time job within the United Kingdom, then you could think about creating a limited company. Setting up a limited company is ideal if you are going to be working on contracts that are only short term, whether you find these short term jobs yourself or if any agency finds them for you. If you form a limited company, you will avoid the Pay As You Earn scheme, which can deduct as much as forty percent of your earnings. Instead, you will be allowed to pay a lower rate of tax and may even be eligible to reduce National Insurance contributions.
After creating your limited company, throughout the course of year, you will be requested to complete a variety of forms; for example, an Annual Return form. This form requires information of any shareholdings and trading activities and details of a secretary or directors.
If you are seriously considering creating a limited company, then it can be important to get some professional advice. Here at Churchill Knight, we have financial specialists who can offer you advice relevant to limited companies.
