Trading As A Limited Company

A Limited Company Can Act As A "Shelter In A Storm".
It's The Ultimate Form Of Protection When Trading.

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Limited Companies

Many accountants dunfermline businesses seek the advice of, will advise new businesses to setup as a limited company.

Do you want to start up your own business? Are put off by the risk involved in starting your own business? Then operating as a limited company may be just the ticket for you.

Overview of Limited Companies

Making The Leap

Are you are fed up of working the typical nine to five job, five days a week? Perhaps you are fed up of working for someone else and doing the work they tell you to, doing it the way they would prefer you to and when they tell you to?

Wouldn’t it be a dream come true if you could choose your own working hours, choose what jobs you do and even how you do them? Having your own company can assist you in doing exactly that.

Forming a Ltd Co is quick and easy and is done everyday by accountants dunfermline business people select to act for them.

Enjoying the Tax Perks

You might have heard the phrase ‘one man limited company’ but are unsure exactly what this refers to, well this phrase refers to the fact that you can set up a limited company even if you are the only person associated with the company.

Companies who do this are known as one man limited companies. You can work for yourself with the security that if anything was to go wrong financially you are not held personally liable, the company is liable.

As the company is liable for any debts your personal assets are protected. You can choose what hours you are going to work on a day to day basis. This flexibility will allow you to make sure you have time for all the important things in life, the things that matter to you.

Risks & Rewards Of A Typical Limited Company

Tax Savings
Access To Bank Loans

How Is A Limited Company Registered?

Info Required

You maybe like the idea of being a limited company but perhaps you are put off by the thought of actually having to form your limited company from scratch?

Most accountants dunfermline new start businesses consult with will be able to help. We too can form your limited company at companies house on your behalf so that you don’t have to worry about the stress of doing this.

All you need to do is provide us with some personal details and let us know what you would like to name your company and providing your chosen name is available then we are good to go.

Registering For Corp Tax

Once your company is all set up you will then need to register online for corporation tax with HMRC. All accountants Dunfermline tradespeople seek the advice of can help in this, we do it as part of our services too.

When this application has been processed by HMRC you will receive your company UTR in the post.

"UTR" stands for "Unique Tax Reference", as the name suggests it is unique to your company.

You should pass this number onto us. Your company UTR is used for corporation tax purposes and we will require this when it comes to submitting your company tax return.

Registering The Director

As you will be the director of your company we will register you personally for self-assessment with HMRC, they will then send you out a personal UTR.

Just as the company UTR is unique to the company, a personal UTR number is unique to you personally.

You should forward this onto us as we will need this when we submit your personal tax return. As a director you are then normally required to submit a personal tax return (dividends and wages pages) even if you did not receive a salary from the company.


Having now formed the company at companies house, a raft of legislation and legal requirements fall upon the director.

As your accountant we would manage all of the accounting and tax filing obligations leaving you free to spend time on earning money!

Running a limited company can appear daunting. Think of it as a complicated vehicle you have bought. Rather than learning how to service it and strip the engine down, you would simply use a garage.

The same is true of limited companies, let the accountant do the maintenance!

Empowering Thoughts About Starting Your Own Limited Company

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Duties & Taxes Of Limited Companies


Once you have your company set up, as a director you are responsible for ensuring that your company files all of the relevant documentation with the relevant bodies by the correct deadlines.

There are many other obligations too but all accountants dunfermline businesses use can assist in this. Being your accountant, we would manage this for you too.

However, don’t let this put you off because at OnTax Accountants Ltd we are here to lend a helping hand to ensure that you meet your deadlines.

As a limited company you are required to submit statutory accounts once a year to companies house, a company tax return once a year to HMRC, a confirmation statement once a year to companies house and lastly as director you should submit a personal tax return once a year to HMRC.


Ltd Co Taxes

Once you have your company formed it is your responsibility to ensure that you register for taxes when you should. You will need to register for VAT if you meet the vat threshold.

As all accountants Dunfermline businesses employ will tell you, keeping an eye on your vat threshold is critical to avoiding trouble with HMRC. We can assist in this as well.

If you are planning on employing people or taking a salary for yourself from the business then you should let us know as you will be required to register as an employer with HMRC.

If you are going to require a payroll then we will register you as an employer with HMRC and set up your payroll.

Ltd Co Bank Accounts

You may have also heard that as a company you need a separate bank account and you think this will be a hassle, rest assured the process is pretty simple.

Depending on which bank you would like to open your account with, as accountants dunfermline businesses work with, we can refer you to one of our contacts in the bank and they will take it from there.  As you are operating as a business you need a business bank account to show the business income and expenses for tax purposes.

You cannot use a personal bank account because this can lead to HMRC challenging the validity of your limited company.

Beating The Taxman

As a limited company you have the advantage of being able to split your income from the business between salary and dividends, this in turn reduces your personal tax bill. Further, leaving money in the company lowers the personal tax bill.

You don’t have this advantage when you are a sole trader. As a limited company you can also leave money in the business, you don’t have to take all money out in the same year it was made, keeping it in the business means that you don’t pay any personal tax on it for that tax year.

Being a limited company can be tax efficient.

Hi! I'm Andy, a director

OnTax help me to run my limited company:

  • I get speedy answers to my questions

  • My corporation tax bill is as low as possible

  • Everything is filed on time, every time


Benefits Of Trading As A Limited Company


You might have heard people saying you should convert to a limited company because it has lots of benefits. Maybe you are still wondering what benefits you will see if you do decide to start your own company.

Firstly, one of the main benefits of starting your own company compared to becoming a sole trader or partnership is the protection you have if you were to have any financial troubles.

When you are a sole trader or partnership, you are liable for any debts your business has with a real risk that personal possessions can be taken off you in order to pay off your debts.

When you trade as a limited company you do not have this risk. This is because when you operate as a limited company you have created a separate legal entity, your company.

This means that if your business gets into any financial trouble then it is the company’s liability to settle it and not yours personally. As accountants dunfermline traders select to guide them, we can tell you with assurity that this should help you sleep better at night knowing all of your personal assets are safe`

Tax Savings

Perhaps you are afraid that running a limited company is going to be too costly?

Well, being a limited company can actually be tax efficient and you could actually save money in tax as a limited company in a way you could not as a sole trader or partnership.

We often tell clients that taxes and accounting fees should be viewed as one overall cost. If the accounting fees increase but the taxes drop dramatically more, then overall you are better off, regardless of how these costs are split.

When you are a limited company you can split the money you take from your business through your salary and though dividends which can save you money in tax.

You can also claim a lot of expenses as business expenses when you are a limited company, therefore, reducing your net profit which as a result can reduce your company tax bill.

A limited company can also save you a fortune if the business becomes insolvent. You can walk away from the debts in many cases.


Generally speaking, both the public, employers and trade contacts regard limited companies as more stable, more viable to deal with and less likely to be "fly by night".

The truth is the exact opposite! With a limited company you have little recourse if they default. However, for the purposes of you securing work or indeed client perception, it may well be worth considering trading as a limited company.

In fact, in the contracting world many contractors will not use a sub-contractor unless they are operating as a limited company.

As many accountants Dunfermline people use to manage their Ltd Co's will tell you, a limited company can actually help you win business!

Some contracting companies go one step further and insist on you also being vat registered.

It's not entirely clear as to why but it is believed that they view someone who has taken these steps as being more permanent, more credible.

With that in mind, might trading as a limited company be of any commercial interest to you?

The Accountants Dunfermline Businesses Love!

What Local Limited Companies Say About OnTax Accountants Ltd

"Many thanks for all your fine work over the years!"

Canam Sports Ltd, Kirkcaldy

"Your service so far has been exceptional."

J Gillies Engineering Ltd, Falkirk

"9 Years Of Honest, Solid Advice"

Total Paving Solutions Ltd, Dunfermline

"Hugely Attentive & £13K Of Vat Savings"

Consult F5 Ltd, Dunfermline

Limited Company Dis-Advantages

Public Record

After hearing all that being a limited company has to offer you might still be unsure about taking the leap and maybe you reckon there must be some disadvantage to having a company.

With everything, there are going to be factors which are less appealing. When you trade as a limited company as a director your information will be on public record, which anyone can access.

There are legitimate ways to have this info held confidentially, but you need to be aware of the risks that 3rd parties can obtain and publish this info.

Filing Deadlines

As the director you are the one responsible for ensuring that all required documents are filed on time and to the correct people.

However, with that being said, as accountants dunfermline enterprises rely on, we are here to lend a helping hand in ensuring you have everything filed that you are required to. We will file these online for you, all you need to do is provide us with your paperwork.

Fines and penalties for non-compliance are extremely punishing so make sure to prioritise anything that needs filed.

Funds Out

Strict rules are in place about how a director can withdraw funds from a company.

Whilst there may not be a police officer at the ATM ready to arrest you if you get it wrong, be a bit to free with the company funds and HMRC will be sure to find out (by way of the company accounts).

For instance, if you were to withdraw all available funds leaving the company incapable of paying the creditors or taxes (even short term), you will have effectively put the company in an insolvent position. Continuing to trade may then breach company law.

Summary Of Operating A Limited Company

The Pro's

You can see from the points above that becoming a limited company can open so many doors for you.

It allows you flexibility and freedom of working for yourself with the peace of mind that you personally are protected if anything was to go financially wrong, so you know that your belongings are safe.

You can also see that becoming a limited company can save you tax as well, which is always a good thing.

The Cons

The minute you become director of a limited company a tsunami of regulations and matters to comply with can kick in.

You can't treat the company as you, it is effectively another legal being and so due care and diligence in all your dealings must take place as failure to do this can land you in court.

There are perils too if you are forgetful about filing on time, fines can start at £375 and quickly escalate into thousands.

Fair View

Being the accountants dunfermline businesses trust and look to for guidance, we will also help you as much as we can to ensure that you carry out your responsibilities of filing your tax returns, statutory accounts and confirmation statement on time so you should not worry too much about the responsibility you have once you set your company up.

So, if you are ready for a change and ready to make your dream a reality let us know and we will be more than happy to assist you in your new adventure.

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Frequently Asked Questions