Anyone formed a limited company?

[debster]

I am currently IT contracting but the company I am working for does not pay you directly as a sole trader. They will only pay through a payroll agency who rip you off by charging you loads or if you are limited company. My partner and I are seriously thinking about going down this route as I am not happy about being charged employer's NI and admin fees etc as well as my own NI and tax.

Has anyone had experience of registering a limited company? I've looked on the Caompanies House web site and it seems fairly straight forward but I just wanted to know how you pay yourself etc. Would I be able to withdraw money to use as I wish or would I have to pay myself a salary and have to pay NI and tax at source? Can I just pay the tax etc at the end of the year? How much does it cost to have a business bank account?

Sorry for all the questions but I am hoping to avoid having to pay for an accountant - at least at this stage!

[Rhiannon]

debster, we had our own limited business for 7 years. We were both on PAYE and my husband was the director, we were paid our wages like everyone else each month and paid tax monthly too.

Beware of any credit you get for the business in the businesses name. Although it is a limited company you will sometimes see in the small print that you are legally liable to pay back funds if the company goes into liquidation. This is so with the Amex small business card but does not say so in it's literature. R.

[Tinker]

Don't forget, you may need to register for VAT as well.

[Viv]

We set up our own limited Company about 9 months ago (for IT and Accountancy consultancy). We draw our money in the form of a salary and do all the PAYE etc. which is not very onerous when you get used to it and have also registered for VAT.
We draw a basic salary from the Company each (spread the money between you to avoid as much higher rate tax as possible) and draw extras we need in the form of a dividend as you then can delay paying the tax - Corporation tax and are not liable for NI contributions on this portion.
Registering for VAT means that you can of course get VAT back on certain expenses that at the moment you probably don't, so it is worth looking at.
One of the cheapest ways to set up a new company is to buy an existing company name off the shelf and then apply for a name change to call it what you want.
We paid an Accountant just to do this bit for us and it wasn't very expensive, otherwise there is a company in Bristol called Jordans who I believe do Company formations, it may be worth tracking them down.
If you have not done PAYE or VAT before both the Inland Revenue and HMC&E run half day courses for people new to business to give you the basics on how to operate it.
In terms of Business Banking we have a business account with Barclays who were offering the best deal at the time. Many banks offer free banking for the first year (or two years if you have you personal accounts with them) so shop around.
Good luck