Below is a list of some of the most frequently asked questions we receive that might assist you in getting started. If your questions aren’t answered here, get in touch for a solution tailor-made for your business.
How do I know EOACC Ltd are the best accountants for me?
If you are looking for proactive accountants with an excellent personal service offering, then EOACC Ltd are the accountants for you. Many clients move to us from small to very large competitors and almost always the main reason is because they want better and more personalised service. We enjoy and believe in building long term relationships with our clients through excellent service delivery, and that is why 99% of our new clients are referrals from existing clients.
How do I change accountants and make EOACC Ltd my new accountants?
All you have to do is forward your current account’s details to us and we’ll take care of the rest. We will send a professional clearance letter to your current accountants, informing them of your decision and also asking them to send us all your relevant information. Many people think this a very cumbersome process, but it is not – we take care of everything for you.
I am a contractor looking to start a contracting role soon, where do I start with the admin?
The first thing you need to do is to incorporate your limited company. You can do this on BeanBalance by following this link. Enter the name of your new company. If it’s available, you can complete all the required information and submit. Your company will be incorporated within 1 to 6 working hours. Important: if you sign up for one of our monthly fee products, you can use our address as your registered office address. This is included in our monthly fee (so please make sure to enter our address while incorporating your limited company). The main reason contractors prefer to use our address is so that they don’t have to put their home address in the public domain. This is for security reasons and also to prevent spam post from being sent to their home address.
I’ve received confirmation that my company is incorporated. What should I do next?
Once your company is incorporated you will need to open a business bank account for it, as you cannot use your personal bank account for your business. Other accountants may say that they will help you with this, but only you can be a signatory on your business bank account, so only you can open your company’s business bank account. Accountants can help by providing you with your company’s incorporation documentation. As soon as your company is incorporated, you will receive an email from BeanBalance with all the incorporation documentation you’ll need in the process of opening a business bank account.
How do I open a business bank account for my new limited company?
It’s now easier than ever to open a business bank account. No more waiting weeks for an appointment with your local bank. Apply for your business bank account online now via our partners at TIDE and have your account opened and ready to use in no time.
When can I start to raise invoices?
You can only raise invoices once you’ve opened your business bank account, so it will all depend on how quickly you can get this done. Once the account is open we can show you how to BeanBalance to create invoices and more. It won’t make any difference to us whether you raise weekly, fortnightly or monthly invoices – you can check with your recruitment agency or client what the frequency of your invoicing should be.
How long does it take to register for VAT?
You can only register your company for VAT once your business bank account is open. The process takes about 10 working days. You can, however, raise invoices before you have a VAT number and then raise a backdated VAT invoice once you receive your VAT certificate. A backdated VAT invoice would need to be raised for the VAT on all invoices raised since the effective date of VAT registration. This is a standard process that we will talk you through if you are on one of our monthly fee products.
How will I know how much money I can take out of my business bank account?
On BeanBalance you will find a module called ‘Paying Yourself’, which you can use to calculate the amount of net salary, net dividends and reimbursable expenses you can pay yourself after deducting all taxes and fees. The paying yourself module will create an online remittance advice showing the detailed calculations.
You can upload your business bank transactions to BeanBalance once a month.We will then help you allocate the business transactions and reconcile the bank account. Once the business transactions have been allocated you can get real time information about how much Corporation Tax, PAYE and retained earnings you have in your business bank account. If you’re on one of our monthly fee products then we will assist you with the more complicated allocations like salary and dividend allocations on BeanBalance and also make sure you comply with all the statutory filing obligations.
What can I deduct as business expenses?
Any expenses that you incur wholly, exclusively and necessarily for the purpose of your business are tax deductible. Examples of such expenses are accounting fees relating to work done for your company and travel and subsistence to a temporary place of work. Follow this link for help with expenses.
What about tax planning? How can I make sure I pay myself as tax efficiently as possible?
Basic tax planning is included in your monthly accounting fee. You will need to provide us with details of any other income (e.g. salary or self-employed income) earned during the tax year, as this will impact the most tax efficient amount you can pay yourself from your limited company. We will then do the necessary tax planning for you.
Because you’re effectively starting your own business, it’s of the utmost importance that you understand all the different tax thresholds so you don’t get any nasty surprises when your self-assessment tax return is due. We have a number of online calculators which you can use to estimate the way different payment structures impact your tax. At EOACC Ltd we don’t mind taking extra time to make sure our clients understand all the different tax thresholds. This is probably the single biggest reason why we have so many clients recommending us – we focus on being proactive accountants, not reactive accountants.
Do I need business insurance?
Most contractors will, at minimum, need to take out Professional Indemnity Insurance. Please have a look at this link for some quotes for insurance
What about IR35?
In a nutshell, IR35 came into effect in April 2000 and was designed to tax “disguised employment” at a rate similar to permanent employees. In this context a “disguised employee” refers to a worker who receives payments from a client via an intermediary and whose relationship with their client is such that had they been paid directly they would be an employee of the client and taxed accordingly.
IR35 was introduced to help distinguish between permanent employees and genuine temps/contractors. A contractor who is deemed outside the IR35 legislation can make substantial tax savings as the contractor can earn dividends (which are not subject to National Insurance Contributions).
Even though most contractors will sign an IR35 contract when they accept temp roles through recruitment agencies, these contracts are not always enough to safeguard contractors against IR35. As IR35 is a complex piece of employment law legislation we do advise clients to consult a professional to help them understand their position in relation to this legislation better.
Qdos Consulting offer a well-priced one-off review service as well as a range of insurance products for contractors. Please have a look at their website for more information. For more guidance on IR35 visit IR35Buddy.