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Running a one-person limited company: costs and admin
I have run a one-person IT contracting company since 2019. This section is the administrative half of that: the recurring costs, the things that have to be filed, and the small decisions that are annoying to reverse once made.
It has nothing to do with peer to peer lending. It is here because it is the other thing I know something about, and because the registered office address referral code is what pays for this site's hosting.
The recurring costs
A limited company with one director, no employees and no premises has a short list of unavoidable costs:
- Confirmation statement. Filed once a year with Companies House, for a small fee. Takes about ten minutes if nothing has changed.
- Annual accounts and a corporation tax return. Either your time or an accountant's. Most contractors pay an accountant a monthly fee that covers this, payroll and VAT returns.
- A registered office address. Legally required, published on the public register, and your home address by default if you do not buy one.
- Professional indemnity and public liability insurance. Usually a contractual requirement rather than a legal one, and most agencies will not place you without it.
- A business bank account. Not legally required for a sole trader, in practice unavoidable for a limited company.
- Accounting software, if your accountant does not include it.
None of it is complicated. All of it has a deadline with a penalty attached, which is the actual argument for paying somebody.
The decisions worth thinking about once
Your address. Whatever address you file as the registered office is published and stays in the historical record permanently, so it is worth getting right at incorporation rather than changing later. See the registered address page for what the service does and where the code goes.
Your accountant. Contractor accountants price per month and the cheapest ones make it back on the things that are not included. Ask specifically what happens when HMRC opens an enquiry.
Whether to register for VAT. Mandatory above the threshold, optional below it, and the flat rate scheme is much less generous than it was in 2016.
How you pay yourself. Salary and dividend splits change with every Budget, and the arithmetic that was right two years ago is probably wrong now. This is the one thing genuinely worth paying an accountant to keep current.
What is here so far
Not much yet. Pages are going up one at a time as I write them, starting with the address question because it is the one I get asked about.
Running the company
- The cheapest way to move money abroad from the UK
How to work out what an international transfer really costs, why the exchange rate matters more than the fee, and which services publish their margin.