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Running your company
It pays to use a specialist accountant
Legally there is nothing stopping you from looking after your company's affairs yourself. However many freelance contractors prefer to use the service of OrangeGenie to ensure everything is set up properly and accurately, allowing you to get on and focus on your assignments.
As a company director you are required to maintain accurate records. The Companies Act doesn't prescribe what records are to be kept, but it does require that you retain the records. You will need to keep the evidence of each transaction you record so you keep all your invoices and receipts.
Some of the record keeping is obvious and include:
- Sales invoices
- Business expenses
- Purchase/sale of equipment
- Any personal expenses
- Amounts paid into and paid out of the company bank account
- Business diaries, mileage logs, and all receipts
Your first step is to choose a book-keeping system. You can choose to use an old-fashioned spreadsheet, or a PC based software programme (e.g. Sage or Quickbooks). The modern choice is to use a Cloud based accounting system which enables you to access your records through a web browser. Your accountant will help you choose the right system.
Your company is required to make a number of statutory returns within strict time limits, these include:
- Company accounts and a computation of taxable profits
- Company tax return
- Company annual return
- Form P35 reporting directors remuneration
- Form P11D for each director reporting their taxable benefits and expenses
You may find that your assignment contract stipulates that your company must have certain insurances. In addition you will need to consider thr risks to the future well being of your company. Consider:
Employers Liability Insurance
All employers are legally obliged to have a least £5 million of employers liability insurance. You will be exempt until you employ someone. you will be exempt while the company only employs the owner and where you own more than 50% of the share capital.
Professional Indemnity Insurance
This protects you and your business against claims brought by a client due to aproblem with the work you have done for them. The insurance covers legal costs and any compensation paid as well as costs incurred to rectify a problem.
A good policy, as well as covering you for areas such as negligence, breaches of intellectual property and loss of documents and data, will also provide protection for areas such as defamation. It will also provide for loss of client fees in the event of a professional indemnity claim. Make sure any policy you buy covers you for the following 12 months in case a client brings a claim for work done previously.
Public Liability Insurance
This covers you against claims arising from accidents to members of the public or damage to property that may occur as a result of your business activities. Even if you work from home you may need this cover if clients visit you there.
If you visit client's premises this will cover you should you accidently damage their equipment.
Property and Contents Insurance
For the purpose of business continuity it is important to plan for the unexpected so that you can replace lost or damaged equipment. Even if you work from home, you need to check that equipment used for your business is still covered by your home contents insurance.