The Practical Guide to Limited Company Tax
If you have chosen to operate your business as a limited com...
By Jonathan London on 15th March 2013
Name MICHAEL THORNBERRY
Company AIM CONSULTANTS LIMITED
Industry Sector CONSTRUCTION ( FINANCE)
Date incorporated 9 FEBRUARY, 2012
Time spent contracting I became a contractor about a year ago.
1 – What was the main decision for you becoming a contractor / freelancer?
I became a contractor due to the prevailing adverse marketing conditions within my industry. Many manufacturing and construction organisations have seen a downward pressure on prices, leaving them to look for other opportunities around staffing costs. One of these has been to employ more contractors, as the employers have less responsibility to them than full-time employees.
2 – What (if any) reservations did you have?
There has definitely been a trend of increased ‘projectisation’ of work in recent years, so maintaining continuity of employment was, and is, a key priority for me. I feel there is less job security in freelancing, and I know I’m not alone, with half of those surveyed in The Boox Report (48%) in the same mind. I also knew that I would need a reliable accountant due to the complexity of my tax affairs, which is when I turned to Boox.
3 – What sources did you use to research your first step into contracting?
I sought the advice of colleagues, who personally recommended making the transition from employment on a PAYE basis to freelancing. Many of them have had such success, in fact, that they will probably continue to freelance next year.
4 – What do you see at the main benefits of running your own company?
I am particularly happy with the flexibility I now have, and also my improved tax position. A greater value is placed on my professional services too. Generally, self-employed professionals earn nearly twice the national average salary – £50,820 compared to £26,093.
5 – Are there any difficulties you continue to face in your business?
As I mentioned, maintaining continuity of employment in this industry is a real difficulty. The freelance sector provides very clear evidence of the old adage that the more you put in, the more you get out, so there is also the issue of striking a healthy work-life balance.
6 – What did you look for when selecting an accounting provider?
I was fortunate enough to have Boox recommended to me by Mace Group, another construction consultancy, who pointed to the first-class service Boox provides. In an ever-evolving industry, it provides a quick and dependable way to manage my accounts. I looked for one that combined the traditional with the modern – I wanted complete access to my books, but also to have a qualified professional on-hand to advise me with all things related to my accounting administration, so I don’t have the hassle of contending against an automated system.
7 – What learnings would you share with others contemplating setting up a limited company?
The primary advice that I would give is to obtain the services of a reputable, efficient and totally reliable accounting company to help you manage your administration. One in four freelancers doesn’t actually know what tax rate they’re paying, and about the same amount have paid too much tax in the past. The time saved on accounting admin has actually allowed me to focus on my consultancy, also to spend more time doing what I want to do.
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