The Benefits of UK Company Formation

As Christmas approaches, it’s an incredibly busy time for everyone up and down the country. Whether you’re getting projects signed off ahead of the new year, you’re looking forward to time off with your family or you’re trying to cram your annual leave in before the New Year begins, December in the office always feels like you’re spinning a lot of plates… and that’s before the office Christmas party!

Christmas is also a great time for reflection on the year. Many of us start thinking about a fresh start for the New Year, and for some people, that might mean finally biting the bullet and going self-employed. You can choose your working days and hours, develop a better work/life balance and do something that you love.

Forming a company before Christmas can provide a solid foundation for growth and profitability, and can offer you a real sense of excitement ahead of the festive period.

You might already have a side hustle that you’re ready to take to the next level, or you’re looking to finally hand in your notice and follow your passions. Either way, there are multiple benefits of UK company formation at this time of year.

It’s an ideal time to turn your business ambitions into reality. From accessing increased market demand to being ahead of the game when the new year begins, starting your business now could set you apart in a crowded marketplace.

Capitalise on Seasonal Demand

The holiday season is one of the busiest times of the year for businesses, with shoppers actively seeking gifts, services, and experiences. By forming a company now, you can position yourself to meet this demand. Whether it’s selling products that make perfect presents, getting homes ready for hosting or providing services for people as the new year begins, launching before Christmas is a great idea across a number of sectors.

When hosting for Christmas, many people start to realise that their space isn’t utilised as well as it could be, or the want for change makes home improvements top of the list come January.

If you offer a trade, you’ll notice a post-Christmas influx in enquiries. January is also the time when most people decide it’s time for change and the property market is booming should you work within that industry.

A Head Start for the New Year

The end of the year is a natural time for planning and reflection. By forming your company now, you can hit the ground running in January with your business structure and strategy already in place. This head start enables you to focus on growth and operations at a time when many competitors may still be organising themselves after the holidays.

Once your company is formed, you can hit the ground running as soon as you like.

What are the Pros & Cons of Forming a Limited Company?

Deciding on the type of business structure that you trade through isn’t just a decision for startups, but some sole traders decide to switch to a limited company as things change and progress for them.

Some self-employed entrepreneurs decide to form a limited company from the outset. But understanding the advantages and disadvantages of each business structure is important to ensure that you choose the right one for your specific circumstances.

Is a limited company the right fit for you and your business?

The nature of the work you do, the income you earn and the way you work all have bearings on whether limited company formation is right for you. The benefits of UK company formation can often outweigh any cons.

If you earn a large income from your business:

It is sensible to form a limited company if you’re earning, or expect to earn, a large income from your business as it can help you to increase this further. Incorporating your business allows you to improve your tax-efficiency and reduce your overall tax liability. In doing so, you may be able to pay less tax (legally!) than if you were a sole trader bringing in the same amount of income.

If you handle significant sums of money:

If you are operating within an industry that hands over large sums of money B2B for example, or you operate in a way where there is a higher risk of legal action being taken against you or there is potential to incur debt, you need to operate as a limited company. That way your business finances are separate to your personal finances, leaving you protected.

If you’re looking to grow your business:

Expanding your business after success is incredibly exciting. It might mean that you want to recruit more people to form a team, or that you want to raise more capital. If you’re registered as a limited company, banks and investors are much more likely to offer you business loans or be interested in buying shares.

The Benefits of Limited Company Formation

Starting a business comes with so many questions and decisions to make. Whatever setup you currently have, Gorilla Accounting can help complete the limited company formation process for you, as well as manage all of your business and personal accounting needs.

If you need advice on which business structure suits your circumstances and business goals the best, we can offer you personal expert advice too, expertly handling the entire incorporation process for you from start to finish.

Things to consider:

Tax Planning

As a limited company, you can take advantage of strategic tax planning opportunities, including claiming expenses incurred in setting up your business. If you sign up with Gorilla Accounting before the end of the year, you can be set up ready to align your finances to kick off January with all your tax reporting, budget forecasting, goals and aims in place.

Set up

The process of forming a limited company is slightly more complex than setting up as a sole trader as you need to select a unique company name, meet Government guidelines, appoint company directors and shareholders and identify who has significant control. From there you need to register with Companies House and pay a fee, however Gorilla Accounting can do all of this on your behalf.

If you choose to start a business as a sole trader, you still need to register with HMRC however there is no fee to do so.

Legalities

Choosing to operate as a limited company makes the finances an entirely separate legal entity from its directors and shareholders. However, as a sole trader, the owner and the business are the same legal entity.

In terms of tax, limited companies pay Corporation Tax on its taxable profits and income tax is levied on any salary and dividends that the directors and shareholders receive from the business. However, there are more allowable expenses available to lower your taxable profit and the flexibility of utilising dividends.

Sole traders pay income tax on the taxable profits of their business which are generally less tax efficient.

Limited Company Formation with Gorilla

Forming a limited company can be daunting but Gorilla’s Company Formation Accountants can assist you with setting up your limited company and go through the benefits of UK company formation with you.

We make it as simple as possible for you by helping you with company registrations. You need to choose a company name and check if it is available on the Government’s company name availability checker, where all UK limited company names are. Please note, you must check that it meets the Government’s guidelines.

From there, choose a UK registered office address where official company documents will be sent to, remembering that this will be in the public domain via Companies House.

We offer a registered office address service for just £10 +VAT per month too, so if you don’t have an office space or an address different to your home address, your tax and financial correspondence can be dealt with by your own dedicated accountant.

From there, we can help you find a business bank account. Gorilla Accounting has partnered with Mettle, the free business bank account by NatWest. You can apply for a Mettle account here.

Our full, expert Company Formation service is just £160 inc VAT, and includes:

• Registration of your company with Companies House
• Certificate of incorporation
• Share certificates
• Assistance with a Mettle business bank account application
• Memorandum and articles of association

If you’re ready to incorporate or you’re looking for guidance, our expert accountants are here to help. You can call us on 0330 107 9674 or request a call back here.