Company Formation
wildgoose1uk
Registered Posts: 200 Dedicated contributor 🦉
Hi folks
What do people charge for setting up a limited company and vat registration? I have been asked to price for the work and want to make sure I price myself appropriately.
Cheers
wg
What do people charge for setting up a limited company and vat registration? I have been asked to price for the work and want to make sure I price myself appropriately.
Cheers
wg
0
Comments
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Standard incorporation service £125+VAT.
This is to set up a new company with CoHo. The service includes all incorporation documents, filing CT41G, and applying for VAT and PAYE reg if necessary. We buy the incorporation via a formation house. The fee also includes the time taken to talk them through the Ltd and advising them on their circumstances.
Standalone VAT reg £50+VAT
If it's an incorporation of a sole trader in order to save them tax, transfer assets, goodwill etc, it will be more than £125 as there's a lot more work.0 -
We charge £150 + VAT + £14 Co Hse Fee. We charged £100 + VAT previously plus the cost of using waterlows. However we know use our own in house IRIS software to form the companies which is quicker and easier for us but with an increased fee also.0
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Just out of interest, which formation house do you use / recommend?0
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We charge £250 here and we also use Iris Company Formations. We've also previously used a company called 4business (website is www.4business.com) and they're pretty cheap and very efficient.0
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We use Iris. Very cheap and very easy to do. Saves setting them up as a client when it's time to do the accounts too!0
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If you use IRIS for Company formation do you have to use their accounting software too or can you buy the Company formation software on its own?
Just wondering how many set ups per year you need to do to justify the cost.0 -
We use www.companiesmadesimple.com. Cheap and cheerful and value for money.0
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What to charge? 25% of the projected tax savings through being a limited company compared to being a sole-trader.
Who to use? QF Registrars for me. Slightly more expensive than Companies Made Simple but better quality reports, in my opinion.0 -
deanshepherd wrote: »What to charge? ...projected tax savings through being a limited company compared to being a sole-trader.
This is the basis of our charge too. Though it's a fixed fee of £500.
Regards
Dean0 -
If it is a fixed fee then that is not the basis but it may well be the justification.0
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deanshepherd wrote: »What to charge? 25% of the projected tax savings through being a limited company compared to being a sole-trader.
Who to use? QF Registrars for me. Slightly more expensive than Companies Made Simple but better quality reports, in my opinion.
There's a few firms I've come across who do this and I totally get the principle. I'd always be worried, though, that if the client knew that some firms charge a flat £150, they might get the hump and you risk losing both the incorporation fee and the recurring accountancy fees?0 -
Presumably (sorry I've just thought it through a little more) you'd take the view that if they don't get the link between the value you bring as an accountant and the fee they pay then they're not the sort of client you want anway?0
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I'd always be worried, though, that if the client knew that some firms charge a flat £150, they might get the hump and you risk losing both the incorporation fee and the recurring accountancy fees?
Yes, it happens.
I think the trick is not necessarily to do it for new clients where the decision to incorporate from the beginning is obvious. That way they will always compare your cost to someone elses. I lost an otherwise good lead to exactly that scenario a few weeks ago.
This method works best where an unincorporated business comes to you and you suggest doing some projections to see if staying unincorporated is really the best option (even if this is blindingly obvious from the outset). You then come back to them and say we think there is a better way. We believe your tax savings over the next 5 years is going to be £X but we need to set this up right, manage the transfer from sole-trader to limited company and agree our figures with HMRC. If you want to go ahead then we will only charge 25% of the tax you save.
It will also work with existing unincorporated clients.0 -
Presumably (sorry I've just thought it through a little more) you'd take the view that if they don't get the link between the value you bring as an accountant and the fee they pay then they're not the sort of client you want anway?
Absolutely but, more importantly, I believe our prices should where possible reflect the value to the client not the time it takes us to do something. Incorporating a company is a prime example.
To be honest, I usually charge £240 where it is a new client and the obvious path to take. If the client has not come to you saying 'I want to form a company' then what they are paying for is not just the formation but the advice as to whether that is the right decision or not and that is where the real value is.0 -
deanshepherd wrote: »If it is a fixed fee then that is not the basis but it may well be the justification.
Ok it's "fixed" based on the benefit to the client. So perhaps I should say the average fee is £500!
Regards
Dean0 -
A few stupid questions (please don't shoot me down)........
1) For anyone who uses companiesmadesimple.com; do you normally opt for the £16.99 + VAT Bronze package?
2) Is there anything significantly different between the £16.99 + VAT service offered by companiesmadesimple and the £18 service offered by Companies House?
3) Assuming there are no IR35 implications, is it normally better to get a client to incorporate? For example, if you put through a £588/month salary for the director (formerly the sole trader) this will reduce their profits by £7,056 and consequently should reduce their tax bill by around £1,400. Also the £588/month salary should also help them to qualify for the state pension and additional state pension, right?0 -
1. Yes.
2. No. If anything, the MadeSimple one is easier to do (though I've not used CoHo).
3. Yes, after a certain level of profits. I recommend that you do a few spreadsheets and create a sole trade Vs Limited proforma. Don't forget the uplift in accounting fees for a Ltd. This will help you see the differences and at what level it really starts to make a difference - and then you have a proforma which you can use for illustration to clients.0 -
A few stupid questions (please don't shoot me down)........
1) For anyone who uses companiesmadesimple.com; do you normally opt for the £16.99 + VAT Bronze package?
2) Is there anything significantly different between the £16.99 + VAT service offered by companiesmadesimple and the £18 service offered by Companies House?
3) Assuming there are no IR35 implications, is it normally better to get a client to incorporate? For example, if you put through a £588/month salary for the director (formerly the sole trader) this will reduce their profits by £7,056 and consequently should reduce their tax bill by around £1,400. Also the £588/month salary should also help them to qualify for the state pension and additional state pension, right?
Re: Q2
I used a formations agent at the practice I used to work at and then after I left I used Companies House direct service. Honestly,the direct service is completely fine to use. Ok, you don't get all the extras (ad words voucher etc) but then my clients have only ever been interested in registering the company anyway.
The only major downfall is that it can take a bit longer then a formations company.0 -
1. Yes.
2. No. If anything, the MadeSimple one is easier to do (though I've not used CoHo).
3. Yes, after a certain level of profits. I recommend that you do a few spreadsheets and create a sole trade Vs Limited proforma. Don't forget the uplift in accounting fees for a Ltd. This will help you see the differences and at what level it really starts to make a difference - and then you have a proforma which you can use for illustration to clients.
Thanks Monsoon; you're incredibly helpful0 -
stefanboro wrote: »Re: Q2
I used a formations agent at the practice I used to work at and then after I left I used Companies House direct service. Honestly,the direct service is completely fine to use. Ok, you don't get all the extras (ad words voucher etc) but then my clients have only ever been interested in registering the company anyway.
The only major downfall is that it can take a bit longer then a formations company.
Thanks Stefan
There's an interesting article on AWeb regarding CoHo as a formation agent and CoHo being problematic and only good for the very basic formations:
http://www.accountingweb.co.uk/article/company-formations-debate-where-do-accountants-stand/524933
By the way, great website! Very professional looking!0
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