View Full Version : Cost of maintaining a private limited company?
james.hill
31st May 2005, 18:22
Hi all,
I'm currently working on two serparate but similar projects. One is to manage small/medium biz IT with the use of open source software, and the other project is a consultancy project where I handle sales/organisation/reputability for freelancers such as students and offer their services on certain projects.
The first project is my baby, the second project I'm running in conjunction with a friend and entrepreneur from the US. The friend wants a small stake in the second project.
My question is - what does it cost to upkeep a limited company? I know all about the initial costs, but what costs are involved in the running? There's accountancy and end of year returns... anything else? Anyone got any rough figures as to what I'll be looking at?
If it's not too expensive, I'm going to create two separate companies. If it is, I'm going to create one limited company, and use different trading names/branding.
Thoughts anyone?
Cheers,
James
Hi James
Interesting question.........
The accountancy costs will vary depending on the size and complexity of the business and the company doing the work for you.
End of year returns ( I assume you mean audit, corporation tax, payroll ) will also depend on the complexity of the companies financial history throughout the year.
Hows that for a simple answer..........
I'd be happy to discuss the issue more fully with you, that way we may be able to narrow it done a bit. Please send me a PM with afew more details.
Paul
james.hill
31st May 2005, 18:56
Hi James
Interesting question.........
The accountancy costs will vary depending on the size and complexity of the business and the company doing the work for you.
End of year returns ( I assume you mean audit, corporation tax, payroll ) will also depend on the complexity of the companies financial history throughout the year.
Hows that for a simple answer..........
I'd be happy to discuss the issue more fully with you, that way we may be able to narrow it done a bit. Please send me a PM with afew more details.
Paul
Hi Paul,
Ask a simple question, get a simple answer ;-) The first company is an IT support company providing savings through the use of open source software. We'll need to do corporation tax + VAT + payroll for say upto 5 employees in the first few years.
The second company is much smaller. The majority of the work will be outsourced, with just myself as an employee to start with. This company will avoid VAT if possible.
I don't see either company doing the 1.5mil turnover required for a while. The first company may reach this milestone in a couple of years.
I've also PM'd you to discuss this further.
Cheers,
James
Alpha
1st June 2005, 11:21
Hi James and welcome.
The running costs will vary depending on the volume of business each company has particularly if you outsource book keeping and payroll.
Not sure what your reference to £1.5m is though, the VAT threshold is £60k and the audit threshold is £5.6M (Don't think you will be at that level for some time :) .
If you have 5 employees you will have to operate and make available a pension scheme although you do not have to have company contributions. You will need to have a health and safety policy, staff handbooks or at least the main terms contained in an offer letter, maintain an accident record and so on.
If you are taking on 'sub contract' workers you will need to ensure that you have contracts with these and you are covered as the IR is now actively persuing the issues of 'disguised employment' (That is it wants the employers NI).
I presume for the first company you already have standard supply contracts drawn up.
If not I would run through these with a solicitor.
Anything else you want to know by all means ask away.
james.hill
1st June 2005, 22:59
Hi James and welcome.
The running costs will vary depending on the volume of business each company has particularly if you outsource book keeping and payroll.
Not sure what your reference to £1.5m is though, the VAT threshold is £60k and the audit threshold is £5.6M (Don't think you will be at that level for some time :) .
If you have 5 employees you will have to operate and make available a pension scheme although you do not have to have company contributions. You will need to have a health and safety policy, staff handbooks or at least the main terms contained in an offer letter, maintain an accident record and so on.
If you are taking on 'sub contract' workers you will need to ensure that you have contracts with these and you are covered as the IR is now actively persuing the issues of 'disguised employment' (That is it wants the employers NI).
I presume for the first company you already have standard supply contracts drawn up.
If not I would run through these with a solicitor.
Anything else you want to know by all means ask away.
Hi Alan, thank you for your welcome C=
I'm working on the contracts at the moment... I will definately get them checked by a solicitor, hopefully I can get a good deal as I have one as a (potential) client! I'll just have ot make sure he doesn't check his own contract *Grin.
My question has been answered... The running costs of a limited company (on the small scale) are the book-keeping and payroll overheads + end of year tax returns.
I plan to start doing the book-keeping myself until I have the spare cash to free up my time, and have an accountant check my systems etc to make sure I don't make a mess of things!
Thank you both Alpha and Paul for your help, I've got it sorted now =]
Cheers,
James
Hi James
Good to hear that you've found the right solution to your problem.
Anything that I can do, keep in touch.
Paul