Limited Company for IT Contractors
Limited Company for IT contractors
By setting up your own IT contractor Limited Company, you’ll give yourself the best platform on which to build a profitable business.
You’ll have the framework to optimise your income, minimise your tax liability through deductible expenses and project a professional business image.
At Boox, we can set up your Limited Company for you and help you take care of your legal obligations to HMRC and Companies House. And that’s just the start. We’re here to help you manage your business finances, allowing you to focus on your day to day contract work. Check out our service features to learn more about how we can help.
Why use a Limited Company when contracting in IT?
As a Limited Company, your business can claim a range of business expenses unavailable to sole traders or people working through umbrella companies.
You’ll also be able to pay yourself a low salary and top up your income through dividends, which come out of the company’s post-tax profits. Dividends are subject to lower rates of income tax than a straight salary, so you’ll see a big difference in your take home pay.
You’ll also be able to enjoy the tax advantages of a company pension scheme and salary sacrifice benefits such as childcare vouchers.
Other benefits of a Limited Company
As well as the financial benefits of running a Limited Company, you’ll also be protected if the business falls into debt. This is because the ‘Limited’ means limited liability. In other words, as an individual, you personally stand to lose what you put into the business. You won’t be liable for debt beyond the sum of your total investment – unless you give lenders personal guarantees.
Your business will also benefit from the professional image Limited Company status gives. Many clients prefer to give IT contracts to Limited Companies because it enables then to avoid complex employment and National Insurance laws.