FAQ
We are a full service, general practice accounting firm, We work with various business types and individuals. FTSE, small businesses, shop owners, entrepreneurial start-ups, sole traders, contractors... we work around your needs and optimise our services to your specific requirements.
We have specialist advisors in all areas of our business as well as fantastic support staff who will be able to help you if your advisor is unavailable when you make contact.
What is best for me - limited or umbrella?
Ultimately, the decision is up to you; working through an Umbrella company is simpler than working through your own limited company, but you will take home less money from your contract. As a general rule, if you earn more than £25,000 per annum, or if you are on a contract for more than three months and intend to stay contracting for the foreseeable future, then the limited company route would be best for you.
How do I switch from umbrella to limited?
Switching from Umbrella to Limited is simple. All you need to do is form your Limited Company, which will take about 5 minutes on our website, open a business bank account, and appoint an accountant. As soon as your company is formed you can stop working via your umbrella company and start trading through your limited company.
Is there a lot of paperwork?
Paperwork should take no more than around 15 – 20 minutes per month. This includes sending invoices, recording expenses and sending cheques to HM Revenue and Customs, which isn’t much more than if you were to use an umbrella company.
What expenses can I claim?
You can claim anything that is wholly and exclusively for the purposes of your business. This actually includes numerous things such as accountancy fees, business travel, postage, insurance, salaries and Employer’s NI contributions.
What if I decide to go permanent?
No problem, simply close your company or leave it dormant. We can help you understand what’s best for you if the situation arises
Is there a good time to form a limited company?
No, anytime is a good time. It’s a myth that April or the beginning of the year/month is best, as it really makes no difference at all. But if you are not planning on working through your limited company straight away, then you are better off waiting until a couple of weeks before your contract starts. It is better to do it in advance of your contract start date, so you have everything ready and can focus all your energy and time on your new contract.
What are dividends?
Dividends are just a distribution of your Companies profits to its shareholder (you!). You do not have to pay national Insurance on any dividend payments and so this is a very tax efficient way of receiving income from your company.
How often can I pay dividends?
Dividends can be paid as often as you choose. It is a myth that contractors who pay themselves dividends monthly are more likely to be caught by IR35. They are your profits so you can take them when you like, as long as you leave enough money behind to ensure you can meet your tax obligations
Do I still have to pay you if I don’t work for a month?
Yes we’re afraid so. Just like you car insurance, our monthly fee is just our annual amount broken down into 12 bites sized payments. However, if you decide to leave ABK at any time, all you need to do is to inform your accountant and then cancel your direct debit. There are no exit penalties.
What is IR35 and what are its implications for me?
IR35 is much less of an issue than it first seemed. Basically it tries to differentiate between genuine contractors and “disguised employees”. It has been found that in the overwhelming majority of cases contractors are NOT “disguised employees”. Providing you have a contract that is outside IR35 (we can review this for you and confirm) - and your working practices reflect that of a standard limited company and not that of an employee - you will be fine.
If your contract and working practices give the impression that you are inside IR35 legislation, you will have to pay full tax and full National Insurance, instead of the usual salary and dividends from the profits of your company, as well as reduced expenses. This basically means that you will earn less money.
If I am inside IR35, is there any benefit in trading through my own limited company?
Even if your contract and working practices are inside IR35 you can still:
- Claim travelling and accommodation expenses
- Claim 5% of your turnover
- Benefit from the flat rate VAT scheme which, on an average contract, will save you around £2,000 a year
- Receive interest on the funds held within your own company.
So yes, from a financial point of view it still could be worth it. Also, any other contract work you do could also be put through your existing company.
How quickly can I be up and running?
To activate your ABK account you need an active limited company, a business bank account, and your historical accounting data from your previous accountant (if applicable). If you have these, your account can be set up in a few minutes.
If not, your team will help you get set up. Your account managers can form your limited company, send you information on opening a business bank account, and transfer your accounting data over from your old accountant.
Am I tied into a contract with ABK Accountancy?
No. There are NO entry fees, exit fees or tied-in fees.
What is an authorised agent?
What is a registered office?
A registered office service means ABK will deal with business post on your behalf. All letters from Companies House and HMRC will arrive at our offices where they will be scanned, securely stored in your account and shredded. If action is required from you, your account manager will notify you and explain the situation.
Anything we do not need to deal with will be forwarded to your normal address.
In many cases business post must be dealt with by us (acting as your accountant), so a registered office service saves both us and our clients time, as well as keeping your doormat free from envelopes.
Can you help with VAT registration?
Yes! In cases where your turnover exceeds the VAT registration threshold, you are legally required to register for VAT. In some cases it can be beneficial to register for VAT before your turnover reaches the threshold.
Our accountants will advise you as to when you should register, and in both cases your team will handle the registration on your behalf for no extra charge.
How much advice is included in my monthly fee?
As much as you need! Your account manager and accountant are available at any time during office hours via email or telephone (no appointment necessary) to answer any questions you might have. We’ll never impose limits on how much support ABK clients receive.
What insurances will I need?
You’ll probably need:
- Professional Indemnity Insurance which costs around £165 per annum. This provides financial protection for your company and is designed to meet the cost of defending claims made against you.
- Public Liability Insurance which costs £115 per annum. This protects you against third party claims for injury or damage to people or their property.
Both insurances are claimable expenses through your limited company.
What kind of support will I get with my accounting?
Your team are there to help you run your business. We know there are many aspects of bookkeeping and finance which are confusing for first-timers (and second-timers, some even for third-timers!), so our accountants and account managers are trained to help with just about anything you care to throw at them.
Your account manager will send you reminders to help you stay on top of your books in preparation for key dates in your financial year, making sure you avoid any fines and stay on the right side of HMRC.
If you have a specific accounting or tax query, you can speak to our accountants for as long as you like. We also have a hand-picked selection of service partners offering complementary products. If you’re in need of some professional insurance, financial advice, a pension review, debt collection or business banking your account manager can point you in the right direction.
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