Have taken some advice from an accountant and chatted to a few people who do it already and the main downsides to think about seem to be:

1. Uncertain income – but you should earn more when you are working to cover this.
2. Keep business and personal expenditure 100% separate so you don’t break the law.
3. Don’t breach IR35.
4. Get an accountant to manage your tax affairs so you pay the right amount and don’t accrue an underpaid bill.

I’m assuming the point of a Ltd is any debts from the company will not impact my personal estate ie: I can’t lose my house or end up in bankruptcy.

Being a contractor my costs would be limited so it’s mainly a question of managing my income and paying the right tax…

Anything else?

Works well for me as a freelance journalist.

Only real risk is that you end up working all the bloody time.

I have a business partner though, so Ltd Company was the natural choice for us.

You’ve just about covered everything there and as pointed out you can find yourself working all the time but able to take the rewards too.
Be very careful with the IR35 as the word on the grapevine is that HMRC will be targeting this again. Also the accountants that allow this to happen in attempt to get rid of some the bad practices.
Good luck to you

I’m assuming the point of a Ltd is any debts from the company will not impact my personal estate ie: I can’t lose my house or end up in bankruptcy.

As a sole-contractor the only debts you’ll be able to ‘create’ are not paying your taxes/vat etc – so no real risk in that sense.

A simple way around IR35 is to find another contractor and both be linked to the same LTD company. That way it can easily be argued that its a ‘business’, rather than a tax-efficient way. We do this as both my OH and I contract.

A simple way around IR35 is to find another contractor and both be linked to the same LTD company. That way it can easily be argued that its a ‘business’, rather than a tax-efficient way. We do this as both my OH and I contract.

I doubt that would cut much ice with HMRC if they deemed you to be inside IR35.

And you’ll run into problems when it comes to sharing the money out if you want to do anything but take it 50/50, as dividends have to be taken equally or in a set proportion.

A simple way around IR35 is to find another contractor and both be linked to the same LTD company.

Doesn’t solve the problem that if you only contract for one company on an ongoing basis (even through a LTD front) then basically you are an employee as far as HMRC/IR35 are concerned.

Doesn’t solve the problem that if you only contract for one company on an ongoing basis (even through a LTD front) then basically you are an employee as far as HMRC/IR35 are concerned.

Nope. Look how many folk who work at companies and then spend 100% of their time on a single customer site. Or a local SME with a big contract.

You’re in business. And with 2 fee-earners its easy to then generate 4 customers in a trading year.

I’m assuming the point of a Ltd is any debts from the company will not impact my personal estate ie: I can’t lose my house or end up in bankruptcy.

Not quite that simple. Ordinarily, yes, limited liability is what it says, but if you’re naughty (e.g. continuing to trade when you know the business is insolvent, taking on liabilities you know you won’t be able to settle, including to HMRC) directors can be personally liable, as well as subject to prosecution. “Wrongful trading” if you want to google / wiki for more detail around this.

EDIT: Not restricted to limited liability companies, but as a director, there’s other potential risks you should be aware of, such as H&S duty of care, which would extend, for example, to sub-contractors. E.g. if you arrange a sub-contract and send your subbie to do a job 100 miles away, he crashes his car on the way there, and in the ensuing investigation it turns out he had no driving licence, or his car wasn’t roadworthy, as director of the company you could be looking at corporate manslaughter if you hadn’t taken reasonable steps etc. Not a common occurence, but these things happen so you should be aware of it.

If you are considering becoming a director of a company for the first time, you’d be well advised to read up on all the duties and responsibilities that this entails.

Nope. Look how many folk who work at companies and then spend 100% of their time on a single customer site.

Indeed, and look at how many of them have been nailed by HMRC when they decide to examine it. You might get away with it. You might not want to take the risk. Your call, but be aware that these things tend to come in waves, and if HMRC have a big IR35 crackdown, the fact that the guy who left last year was getting away with it for ages really won’t help you.

One benefit many overlook is the ability to register for VAT. People often worry this makes them more expensive but if you’re contracting to other VAT registered companies you’re not – as they can claim it back.

The advantage in your situation of going VAT registered is that you can go on a Flat Rate VAT scheme. You basically charge 20% VAT and only pass on somewhere between 11% and 14% to the VAT man – netting you 6% to 9% margin.

As a single man LTD company it’s unlikely you’ll be buying anything significant with VAT on so this works massively in your favour.