Everything you need to know about setting up as a limited company

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by Jessica Tabinor on

    CONTRACTOR ADVICE | 4 MIN READ

  • Our new blog series guides you through the different pay types, their key points and also the advantages and disadvantages of each option.

  • Read on to find out more about contracting through a limited company.

Choosing to set up as a limited company is a viable pay option for many contractors.  Contracting through a limited company can be a tax-efficient way to work on a contractual basis. Rather than your employer automatically deducting your tax contribution, as a limited company you are responsible for calculating and sending your own tax and National Insurance Contributions to the HMRC. This does mean a lot more paperwork, but it can provide significant tax benefits.


Things to consider: IR35
  • IR35 Legislation – For contractors IR35 will be introduced to ensure all individuals operating via a limited company were paying the correct levels of tax. IR35 regulators assess income against tax contributions as well as the contracts between limited companies and their clients.

  • IR35 Test – If you are a contractor operating as a limited company you could be required to undergo an IR35 inspection. If you are under inspection, typically an inspector from the HMRC will assess the contract between your limited company and your clients.

  • IR35 Failed Test – If you do fail the IR35 test or if IR35 applies to your contract with your client, you will lose the tax benefits of operating as a limited company and may be forced to pay the same tax and NIC’s as a standard PAYE employee.

You can find more information about IR35 from our dedicated IR35 Portal. 


Positives of contracting through a Limited company
  • The most tax efficient pay option.
  • You can claim tax relief on business revenue expenditure.
  • Limited liability protection.
  • Eligible for Flat Rate VAT.
  • Perfect for career contractors who have passed IR35 tests/measures.

Negatives of contracting through a Limited company
  • More paperwork and self-assessments required to be completed by you.
  • IR35 must be considered and potentially passed.
  • Not suitable for short term contractors or those who fail IR35 tests.


How do I claim business expenses as a limited company?

One of key benefits of choosing to contract through a limited company is the opportunity to claim tax relief on business expenditure. So, it is important that you understand the process of claiming expenses back.

Contact your employer to find out more information about how to can claim business expenses.
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Conduct of Employment Regulations

Should I opt-in or opt-out?

If you are new to contracting through a limited company you may want to find out more information about the Conduct of Employment Regulations, and what option would be best for you. The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (Conduct Regulations for short) were introduced by the Department for Businesses, Innovation and Skills (BIS) to set minimum standards that must be provided by recruiters, for workers/contractors and limited companies.

The regulations apply automatically to contractors who are a registered employee of a client. However, as a limited company, you are technically not an employee, so you have the option of opting in or out of the regulations.


What do the regulations provide?

The regulations essentially provide protection to contractors and ensures that we, the agency, will provide you with the necessary level of protection and support set out by the regulations to ensure you are protected before and throughout your contract. You can find more information about exactly what the regulations cover here: Conduct of Employment Regulations


Things to consider: Opting out

Opting out of the Conduct Regulations can have some disadvantages for contractors, mainly with the loss of protection provided by the regulations and agency. Opting out gives us less control over your contract, which means we can’t protect you if for example there was an issue with payment from your client, or any other type of dispute with the client.


Things to consider: Opting in

The most important thing to consider when choosing to opt-in to the regulations is that this could affect your IR35 status. As the Conduct Regulations apply mainly to regular PAYE employees, the HMRC could subject your limited company and contract with your client to an IR35 test. If IR35 is found to apply to the contract, you will likely lose the tax benefits of contracting through a limited company.


Ready to search for a new job with Morson? Click here to find your next opportunity. Or, if you’re a contractor and want to find out more about IR35 and how it may affect you, click here to read our blog series.

Cx Jobs

Import Export Supervisor

The Imports and Exports Supervisor will be responsible for delivering Import and Export of equipment into and out of Qatar. Coordination and supervision of safe receipt, storage, pick, pack, dispatch and transportation activities in order to deliver customer requirements within timescales set. Also supervises and coordinates the planning of logistics activity and the resolution of queries/issues through interface with other teams/organisations. Ensure motivation and effective utilisation of workforce, adherence to SHE, Quality and other internal and external regulations. The external movement of assets to meet operational requirements on the MOB will fall within governance of this role. In addition, the Imports and Exports Supervisor will be responsible for all assets held in quarantine and Item Discrepancy Report (IDR) on base, ensuring safety compliance of non-conforming parts are segregated and managed to prevent non-approved items being allowed into the Supply Chain. Maintains a strong working relationship with Warehousing and Repairs staff to ensure accurate transfer of items inbound and outbound to prevent processing delays. Requires an excellent understanding of International Import and Export procedures and the required Customs and Trade relations paperwork, processes and principles through which the items will be processed to allow order will be satisfied. Must understand constraints and lead times associated with the work and the importance of prioritisation and customer service. Able to apply knowledge and skills to situations of high complexity, able to interpret data trends and variances and understand the impact of these on future asset supply. Requires excellent analysis and planning skills along with excellent relationship building and problem solving skills, able to use appropriate IT systems, requires good numeracy. Requires team leader knowledge team leadership, operational performance management and reporting, people development. This person would be seen, as a professional in the field of operational supply chain activities, be able to define the processes, propose improvements and manage those improvement into the day-to-day running of the operation. Must have a working knowledge of Export Control requirements and restrictions. Institute of Supply Chain Management Level 5, NVQ Level 3 / Level 5 Award or its equivalent is desirable but not essential.

Physical Logistics & Transport Supervisor

The PHS&T Supervisor will be responsible in the operational short to medium term for the coordination and supervision of safe receipt, storage, pick, pack, dispatch and transportation activities in order to deliver customer requirements within timescales set. Also supervises and coordinates the planning of logistics activity and the resolution of queries/issues through interface with other teams/organisations. Ensure motivation and effective utilisation of workforce, adherence to SHE, Quality and other internal and external regulations. This will include managing, stock (including lifting and stocktaking), handling, distribution of materiel on base (including Classified, Secret, or National Sensitive Data (NSD) equipment to meet the operational requirements of both Forward and Depth environments. In Addition the PHS&T Supervisor will be responsible for all the on base transportation of goods to the end user using delivery vehicles and forklift trucks in the execution of these duties to meet agreed KPIs and availability output on a daily basis. Requires in depth knowledge of the workings of a warehouse / logistics operation and the importance of compliance with the MRP Part 145 regulations. Requires excellent planning and expediting knowledge and skills and can demonstrate good experience of using asset tracking / warehouse and planning systems. Knowledge of BAES / customer and supplier logistics and Release to Service (RTS) documentation. Requires excellent relationship building and problem solving skills. Requires team leader knowledge, team leadership, budget control, planning, performance management and reporting. Requires good IT literacy skills and in depth knowledge of asset tracking / ERP systems. Understands Export Control regulation and be able to apply knowledge and skills in the correct completion of documentation. Close attention to details are essential. Driving licence Forklift licence desirable but not essential Institute of Supply Chain Management Level 5 or its equivalent is desirable but not essential.

Warehouse Operative

The Warehouse Operator will be responsible for the safe discharge receipt, storage, pick, pack, dispatch and transportation activities in line with regulations and standards in order to deliver customer requirements within timescales. Maintain and update appropriate IT systems, and resolve queries/issues through interface with other teams. Understand the workings of a Physical Logistics operation and the importance of documentation in a safety critical environment. Good planning and expediting knowledge and skills and can demonstrate experience of using asset tracking / warehouse and planning systems. Knowledge of BAES / customer and supplier logistics processes. Relationship building skills in order to build working rapport with the line and suppliers and problem solving skills to ensure quick resolution of items shortages to the line. Requires good IT literacy skills and knowledge of asset tracking / ERP systems. Maintain a strong working relationship with the Receipt and Despatch/Import and /Export staff to ensure accurate transfer of items inbound and outbound to prevent processing delays This person would be seen, as a competent individual in operational supply chain activities, be able to support the processes, propose improvements and manage those improvements into the day-to-day running of the operation. Must have a working knowledge of Export Control requirements including ITAR/EAR regulations and the movement of Classified equipment Forklift Driving Licence desirable Institute of Supply Chain Management Level 3, NVQ3 Award or its equivalent is desirable but not essential.

Receipt & Dispatch Operator Hawk

The Receipts and Dispatch (R&D) Operator will under supervision receipt, storage, pick, pack, dispatch and transportation activities in line with regulations and standards in order to deliver customer requirements within timescales. Maintain and update under supervision appropriate IT systems and resolve queries/issues through interface with other teams. All inbound and outbound equipment will be managed within the Main Store and will be goods received, inspected and accounted for on the IMS System. Outbound equipment will be packaged to the relevant standard including IATA, IMDG regulations and dependent upon the equipment classification will be subject to further rules and regulations. Inventory Management will utilise the IMS system for stock location and accounting. Experienced stores person, fully conversant with logistics and warehouse systems, locations and safe handling methods. Use of special to type containers. Awareness of potential hazards caused by incorrect storage such as moisture ingress and cadmium corrosion. Basic IT literacy skills and some knowledge of asset tracking / ERP systems. Requires a working knowledge of an operational supply chain, tools and techniques, protocols and procedures. Understands where and how to gather asset information, and how to interpret this information in a range of situations. Is able to build and maintain strong relationships within the Operational organisations. Maintains a strong working relationship with the Warehouse Operator, Import and Export staff to ensure accurate transfer of items inbound and outbound to prevent processing delays. This person would be seen, as a competent individual in operational supply chain activities, be able to support the processes, propose improvements and manage those improvements into the day-to-day running of the operation. A working knowledge of Export Control requirements including ITAR/EAR regulations is desirable. Forklift Truck Licence Institute of Supply Chain Management Level 2/3, NVQ 2 / National Diploma Level 2 or its equivalent is desirable but not essential

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