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I am going to start software development contracting after more than 5 years as a perm in London. I want to contract via ltd company. I don't know where to start.

  1. Should I open a ltd company and a business bank account first? or should I get an accountant first to help me?
  2. I need an address for for my ltd company. I don't want to use my home address. What options do I have? should I use a virtual office or get an accountant who can provide an address?
  3. How can I find a reputable accountant for software development contracts. I will need help with ir35.

closed as too broad by Michael Grubey, virolino, gnat, IDrinkandIKnowThings, Dan Neely May 25 at 18:36

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  • I've provided an answer to your questions - if you are looking for more general tips or recommendations for accountants etc. I'm usually knocking about in The Workplace Chat – motosubatsu May 23 at 8:11
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Should I open a ltd company and a business bank account first? or should I get an accountant first to help me?

You can do the accountant bit first then create the company, then the bank account (you can't open a business bank account for a business that doesn't exist obviously)

I need an address for for my ltd company. I don't want to use my home address. What options do I have? should I use a virtual office or get an accountant who can provide an address?

Probably the accountant is the best bet if you don't want to use you home address - much of the important paperwork you will receive via post will be HMRC related so it makes sense to have it in the hands of your accountant.

How can I find a reputable accountant for software development contracts. I will need help with ir35.

Recommending specific companies/services is out of scope here I'm afraid but the majority of accountants that specialize in working with contractors will be able to offer you IR35 reviews and coverage.

You don't mention it explicitly but I would also strongly suggest getting suitable insurance for IT contractors - many clients will require it and the protection it provides is worth the small amount of the cost IMHO.

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I like @motosubatu's answer, but feel that some details are missing (too many for comments).

Should I open a ltd company and a business bank account first? or should I get an accountant first to help me?

Either. If you approach an accountant, they'll deal with everything for you for a large fee.

You could instead do all the paperwork yourself and file with Companies House (£25? fee). I always used to recommend against this, but the UK gov and Companies house websites have got a lot more friendly in the last few years.

An alternative is a formation company offering Ltd company setup, costing between £80 and £150. I always went for the basic, cheapest package in the past. When you get the formation info (Company reg number, articles etc in an email about 4 hours later), book an appointment with the Business Manager at a bank of your choice. Then take all the above to the accountant, and ask them to do book keeping (about £30-£40 per month) and your company return and admin (£100-£400 per year). Some accountants will offer a package with all the above which might be better value.

[Update - @gnasher729 thinks formation companies are a waste of money. Having looked again at the Companies House direct apply route, I'd probably agree as it's a lot easier than when I last did this 6 years ago. But it's your choice; a straight trade off between cost and convenience]

I need an address for for my ltd company. I don't want to use my home address. What options do I have? should I use a virtual office or get an accountant who can provide an address?

As a company director, your home address will be publicly visible, unless there is a compelling reason why not. You could have a "trading address", which might be your office / home office. You absolutely must have a "Registered Address" for company documents (e.g. from HMRC) - it is where a copy of your accounts must be kept. You can ask your accountant to use their's - I think this is the address you referred to. I wouldn't bother with either a virtual address or a mailbox.

How can I find a reputable accountant for software development contracts. I will need help with ir35*.

There are big changes coming in April 2020 regarding this. You might be better to wait and see, starting with an Umbrella Company (google) instead of opening your Ltd. Don't immediately jump into one recommended by the agency, if you're using one.

If you're "caught" by IR35, it just means having to take your entire company income less operating costs as "salary", with the attendant taxes. This will be substantially more than drawing a small salary, up to the tax-free allowance (currently about £12500), with the rest as dividends.

There are so many other points to make; advice for a new contractor, but I'll refrain as they don't address the question.

  • IR35 - UK legislation which clarifies whether a contractor is genuinely in business on their own account, or is a disguised employee of the client.
  • There is absolutely no reason to waste £80-150 by not going right through companyhouse. Formation companies just pass what you give them straight through. You are throwing money away. – gnasher729 May 23 at 10:54
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    Cost vs Convenience, @gnasher729. You're right and I'd use Companies House myself, if I was doing this now. But I'm old and experienced and OP isn't, so I present the choice. Thanks for the comment; I've updated my answer. – Justin May 23 at 11:22
  • Agreed on Cost vs Convenience.. When I started my LLC, I asked a lawyer friend about the US equivalent of OP's questions planning to do it all myself.. At the hourly rate I was charging, it was 'cheaper' to give him $200 to do it all for me.. and I got to write that cost off – Smitty May 23 at 14:59
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(2) You absolutely must give an address where you can be found and where mail can be delivered. If any mail is delivered to that address, it is legally delivered. If you don’t read it, and suffer consequences, tough luck. And if I sue you and send bailiffs to that address, you better be there.

So I very, very strongly suggest you give your home address, unless you rent an office where you work five data a week.

PS. No, you can’t give your accountants address.

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