Going LTD... Company Formation Prices

[WebFlair]

Hi all,

Based on the advice of my accountant, I am going Ltd from the start of the new financial year. My accountant is charging me £160 + VAT for company Formation. To include formation fees, registration for VAT, PAYE and initial Corporation Tax registration forms. Well that's what his letter says, I am not actually VAT registered.

Today I have searched Google for 'Company Formation' and can't help noticing a great many companies offering company formation for ten times less than the price my accountant is charging.

Is my accountant overcharging me?

 

[nelioneil]

Generally formation companies online will register your company, fill the necessary forms, pay a fee to companies house and thats it. You will probably receive your Certificiate of Incorporation, a business bank account with Barclays and possibly other benefits, like use of an address as your own Registered Office. Generally does not include registration of PAYE, Corporation Tax, VAT, though some of the higher end packages do include VAT registration.

In contrast, an accountant could also offer some additional expert advice and services. When companies are registered, especially with formation companies, they use "model" Articles of Association. Which is fine for most people. But an accountant could be helpful in drafting your own Articles or shareholders agreement if you are not happy with the model ones.

I do think personally your accountant is charging alot for company registration unless he is offering extra services which you require for the company, and if you would need them. It is not too much effort needed to register for PAYE and Corporation Tax.

 

[Merchant UK]

Yes your accountant is over charging you, you can go online and do your own limited company for about £20, still keep your accountant, but ordering your company online in 5 minutes will save you £145 compared to what your accountant would charge.

 

[number42]

My accountant is charging me £160 + VAT for company Formation. To include formation fees, registration for VAT, PAYE and initial Corporation Tax registration forms. Well that's what his letter says, I am not actually VAT registered.

You me mention your sole trader business is not currently vat registered, so I presume your trading under the threshold currently?

Are you expecting to go over in the next couple of months? As really unless your involved in b2b, VAT reg is sometimes best postponed until you have a legal obligation to register.


Sent from my iPhone using Tapatalk

 

[Philip Hoyle]

You can buy a tin of paint for £20 and paint your lounge yourself or you can pay a decorator a hundred or two to do it.

The same applies with company formation.

You can do it yourself directly with Co House for just £15. But, then, who deals with the tax registrations, and other issues with the transfer of the business from sole trader to ltd company etc? Are you happy to do it all yourself or will you then get your accountant to do it - they'd probably charge the same as, like you've found out, the actual Co House formation fees are very low.

Your accountant is probably going to do a lot more than the formation. If you're happy to do all the other bits yourself, then fair enough, but if you want advice from your accountant, then you have to pay for their time and experience.

Whether that fee is reasonable depends on lots of other factors. For us, we'd do it for free if the client signed up for a monthly retainer service package. Some accountants charge a lot more than yours - figures of £500 are often banded about. Some accountants charge similar or less.

What I would say is that if you do it yourself and get something wrong, then it'll cost a lot more than that for your accountant to unravel and correct it.

 

The guy who started this forum runs a formations company (Quick Formations), which is very highly thought of, and is a very inexpensive way of getting it done right, with little hassle for yourself.....and he was a pretty decent bloke.

 

[David Griffiths]

Yes your accountant is over charging you,.

He isn't actually. I charge between £100 and £300 depending on what is required. I always point out that the client can form the company for a fuver if they wish, and explain why we charge what we do.

I have never had anybody go away to do it themselves, whether they are long standing clients incorporating or a new client at our first meeting.

Every time this topic comes up people jump in saying it's a rip off with apparently zero understanding of what is involved. Philip's analogy of the paint is spot on.

 

[Ozzy]

The guy who started this forum runs a formations company (Quick Formations), which is very highly thought of, and is a very inexpensive way of getting it done right, with little hassle for yourself

Thank you . We don't do tax advice, such as what you would use an accountant and pay their fair rates to advise you on, but we are at the end of the phone for any company law advice when needed.

.....and he was a pretty decent bloke.

I'm still around, maybe not as often as I used to be but I'm not dead

 

[Moneyman]

The formation fee is the least of your problems. If he is setting up the PAYE VAT etc and getting everything fixed up right, you are getting a bargain. One small fine for a cock up and you would lose every penny if you try and save this.
try to get him to register your company at his address. That way he can make sure you are not missing anything.

 

[seopeak]

Why you don't go for an offshore account? Will cost you more, but you will save a lot after on tax. Ask your accountant about this. I am sure you will prefer it. Special if you own an online business , I think offshore is the best

 

[Anna Chandley]

Why you don't go for an offshore account? Will cost you more, but you will save a lot after on tax. Ask your accountant about this. I am sure you will prefer it. Special if you own an online business , I think offshore is the best

If an offshore company is managed and controlled by a UK resident then it will pay UK tax.

 

[TODonnell]

Or is it the case that a person in receipt of monies from said company will pay the tax? Or, as you say, you pay tax, as a UK resident, on whatever the foreign company earns, if you have a controlling interest in it?

Also: we do company formations as part of of mail forwarding and virtual office business. See my link below ...

 

[Anna Chandley]

Or is it the case that a person in receipt of monies from said company will pay the tax? Or, as you say, you pay tax, as a UK resident, on whatever the foreign company earns, if you have a controlling interest in it?

Also: we do company formations as part of of mail forwarding and virtual office business. See my link below ...

A company which is managed and controlled in the UK will pay UK corporation tax (and possibly overseas tax) - this would be the case even where the UK resident did not receive income from that company.


Anna

 

[TODonnell]

So how do these offshore gurus manage it? Do they live abroad, also?

Just curious.