New startup with beginner questions

[JBMUAE]

Hi all,

I am looking at setting up a ltd company as I have been offered a 3 month contract working in Middle East (This hopefully leads to a longer term contract).

I have some beginner questions I hope you good folks can help with.

1...Do I need an accountant ?
2...Should i open a business bank account and CC ?
3...What type of expenses can i claim for ?
4...How do I pay out dividends ?

I probably have more questions, but these are forefront at the moment.

 

[Scalloway]

1. Some people would say you don't but due to the complexity of limited company accounts and tax I would strongly recommend you appoint an accountant. They will help with your other questions.
2. Yes for a bank account. If you will be incurring small incidental expenses that can't be paid by bank transfer then a company credit cars is very useful.
3. Pretty much anything needed for running the business but an accountant can advise on the details.
4. You need to look at the company accounts and see what profit is available after allowing for Corporation Tax then produce a company minute declaring the dividend. You can then transfer the money. It may be advantageous to pay yourself a salary through PAYE as this is an allowable expense for tax. Your accountant will advise.

 

[NickZ]

I would rather concentrate in keeping the client happy and how to get more.
Once you have earnings you start searching for an accountant.
The rest follows.

 

[Scalloway]

Hiring an accountant at the outset can prevent expensive mistakes.

 

[NickZ]

Hiring an accountant at the outset can prevent expensive mistakes.

It can also add to the company's expenses.

 

[Scalloway]

It is balancing the two. A good accountant can find tax savings that make their fee worthwhile.

 

[fisicx]

It can also add to the company's expenses.

A good accountant will save you far more than they charge. And their fee is tax deductible. Double win!

 

[JBMUAE]

Thanks all

 

[DoolallyTap]

Your post suggests you will not be employed by the client but will be a Ltd. Company 'supplier'. Make sure you have a strong contract with the client if you intend to work as a Ltd. company 'supplier' and if possible include a significant upfront deposit from them. Bear in mind that if you work for 3 months, then issue an invoice, they may want 90 days before payment or not even make the payment, how will you manage to sue for payment?
Do the work, get paid, worry about accountants, tax, dividends later.

 

[alisson38]

Hi all,

I am looking at setting up a ltd company as I have been offered a 3 month contract working in Middle East (This hopefully leads to a longer term contract).

I have some beginner questions I hope you good folks can help with.

1...Do I need an accountant ?
2...Should i open a business bank account and CC ?
3...What type of expenses can i claim for ?
4...How do I pay out dividends ?

I probably have more questions, but these are forefront at the moment.

Hey JBMUAE, congrats on landing the contract—that's a solid start and sounds like a great opportunity to build something longer-term. I was in a similar spot not long ago, figuring out the Ltd setup and all the logistics that come with it.


From experience, I’d say having an accountant is a huge help. You can try to handle things on your own at the beginning, but when it comes to sorting out taxes, expenses, and dividends, it’s so worth having someone who knows the ins and outs. Saves a lot of stress and you avoid rookie mistakes that can be costly later.


And yes, setting up a business bank account is a must—makes everything cleaner when it comes to tracking income and expenses. I didn’t bother with a business credit card right away, but I ended up getting one down the line to help with cash flow and a few setup costs.


On the expenses bit—it’s broader than you’d think. Home office, travel (if it’s related to the contract), software subscriptions, even part of your phone/internet if you’re working from home. Again, an accountant can help make sure you’re claiming what you’re entitled to.


Paying yourself through dividends comes into play once you’ve got some profit left after salary and tax. There’s a method to it, so it’s not something I winged—I let my accountant handle that part too.


If you’ve got more questions as things progress, feel free to drop them here or DM me. Always happy to chat. Also, if your contract grows into more work and you find you need help managing the backend without hiring someone full-time, I’ve come across some great remote support solutions that can make life a lot easier.

 

[fantheflames]

Great idea already from @Scalloway @NickZ , and others. I completely agree that a good accountant pays for themselves, especially if you’re working internationally (like your contract in the Middle East), the tax implications and setup can get more complex than it first appears. One thing I’d add is don’t underestimate the admin. It creeps up fast... when you're focused on deliverying for the client and managing everything, admin and finance can easily be last on the list. Also worth checking whether your setup falls outside IR35, just to be safe. It’s less likely with overseas clients, but perhaps still worth a look?