Frequently Asked Questions

What is a Personal Services Company (PSC)?

A PSC is a company usually set up to manage the business of one person.

Why are PSC's tax efficient?

Dividends do not attract either employee or employer's national insurance.

What if I already have a company set up?

Freestyle Accounting can take over the administration for you.

What if my contract fails IR35?

That contract would be treated as within IR35 and the required tax and NI would be charged. This would be after all allowable expenses, personal contributions and an allowance of 5% of invoices to cover notional expenses.

Does National Minimum Wage apply to Directors?

No, it does not. However, one of our accountants will contact you when you join to advise you on this and recommend the level of salary which is most appropriate for you personally.

What fees and charges would I incur if I managed my own limited company?

Please refer to the competitor matrix chart on the Contractor Services page.

Do all expenses require receipts?

Yes, except for mileage which does not.

Can I claim working from home?

This is a complex area. A small amount (£156) is normally allowable.

If I live with my parents can I claim this as an expense?

Any expenses claimed whilst using Freestyle needs to be receipted and you would be required to lodge receipts to prove payments made to your parents. Your parents are entitled to receive £4250 per annum without paying tax under the "Rent a Room Relief Scheme", providing they reside in the house.

I have a spouse working within the business. Can I take this into account?

We would provide advice on a case by case basis once we know the facts. As a general rule it is ok to pay your spouse a small salary but: -the amount must be reasonable - must equate to what you would pay to a third party for the same duties - must actually be paid to your spouse. Any sizeable amount or indeed shareholding would at present be challenged under the S660 provisions.

Where will the registered address for my limited company be?

This will be Freestyle Accounting's address in Coventry.

What happens when I join?

We will start the ball rolling on getting your company formed, in conjunction with arranging the contract documentation with your agency.

How long does it take to set up the Limited Company?

24-48 hours

How long does it take to organise the VAT and Corporation tax registration?

We can do this as soon as we have your contract and bank account details. HMRC can take about 4 weeks to send your registration certificate.

How long do the IR35 checks take?

Our specialists have confirmed that they will report back within a week, although in most cases it should be quicker than this.

If I am transferring an existing Limited company, would VAT registration etc need to be changed?

It should not be necessary to do this.

Is it better to switch an existing Limited company or just set up a new one?

It may be better to keep the existing company as it will have a trading history.

If I open the Ltd bank account via Freestyle/HSBC, does it take long?

This can usually be arranged in about a week.

What do I need to do to open the bank account?

It will be necessary to pop in to a local branch of HSBC with two forms of identification, but full details of the procedure will be supplied.

The fee seems high. What benefits are there in using Freestyle?

Freetsyle Accounting feel that the fee is very competitive as we provide an all-inclusive accountancy service. Please refer to our competitor matrix on the Contractor Services page for further details of what we include in our fee.

Can I claim car rental / long term car leasing as an expense?

No, but it is acceptable to claim for any mileage incurred relating to your contract.

My client site is some distance from my home and I would prefer to rent. Can I claim this as an expense?

Yes, but this would be on a pro-rata basis i.e 5/7's of the cost (Mon-Fri).

I am here on a 2 year HSMV. Can I use the Freestyle service?

Providing you are UK tax resident and do not require sponsorship you will be able to use this service. However, please bear in mind that in order to renew your HSMV you will need to reflect a certain level of earnings. Dividend payments are considered investment income rather than salaried income. Therefore we recommend that you contact us 12 months before your HSMV renewal is due to discuss the best way to accommodate this.

How do I submit my timesheets?

You will usually need to submit original signed timesheets to your agency or client but ALL timesheets to Freestyle MUST be submitted online via your personal web portal even where a copy needs to accompany your invoice. In this instance, when your time has been logged via the web, our accounts department will be notified internally and the invoice will only be raised once a copy of your timesheet has been received either via fax, post or a scanned copy via email.

How is corporation tax applied?

Corporation tax is payable on business profits, and is not affected by the level of dividends. Higher rate personal tax is payable on dividends over £36,000 gross (£32,400 net).

What is a letter of engagement?

Our letter of engagement is a form of contract in which you agree to provide us with the necessary information to carry out our work.

Does Freestyle Accounting have a 'tie in' period?

There is no tie in period during which you cannot leave and you do not have to commit to pay us a certain amount. However, if we form a company for you and you decide to leave before starting to use the rest of the service then we would charge £85 plus VAT for the company formation. You will not be billed for the month in which you join Freestyle, but you will be billed to the end of the month in which you leave.