The 123 Guides

Payroll

Business Structure Review

The 123 Way

What is included as standard for a fixed fee of £65.00 + vat per month:

Full Contracting health check - is your business performing as best it could - we'll ensure it is.

If you're new to freelance contracting, we'll ensure you start trading in the right way.

Then you can sit back and relax, your ongoing HMRC & Companies House compliance will be taken care of.

The 123 Way - simple & stress-free.

To pay yourself a monthly salary, you need to first set-up a payroll scheme with HMRC. This is known as a PAYE scheme. You’ll be happy to know that this registration is included in The 123 Way.

Registering your payroll

Once we have sent off the registration forms, HMRC will provide you with two reference numbers. You need to send these to us as soon as they arrive.

Once your PAYE payroll is set up, as a director you have three main responsibilities:

1. Calculate how much Income Tax and National Insurance is due on each salary payment.

2. Tell HMRC about any benefits and expenses that have been paid to any employee or director during the year. This is known as the P11D form.

3. At the end of each financial year file an employers Annual Return with HMRC.

All of the above are included in The 123 Way.

PAYE/NIC

There are three main types of tax; Income Tax, Employees National Insurance and Employers National Insurance.

Tax free allowance is currently £8,105 income up to this point is not taxed, if you exceed £100,000 then your tax free allowance decreases.

Above £8,105 the next £33,370 of salary is taxed at 20% known as the “basic rate”. Above this is the “higher rate” taxed at 40% up to £150,000. Above this is the “additional rate” taxed at 50%.

The NIC free allowance is currently £7,592 so NIC is not payable on the first £7,592 of earnings just like the tax free allowance but slightly lower.

Above this threshold salary has NIC deducted at 12%. Until you earn above £42,475 which has NIC deducted at 2%.

Your company also has to pay employers NIC at the rate of 13.8% of any salary above £7,488.

All sounds a bit complicated - luckily The 123 Way includes full PAYE and NIC service to help run your payroll.

Running a Limited Company

Director's Responsibilities

Company Bank Account

Payroll

Salary

Dividends

Limited Company Accounts

Corporation Tax

VAT - The Basics

VAT - The Choices

123 Income Illustrator

The 123 Income Illustrator shows you what you can expect to take home from a given contract.

It also compares the differences between freelance contracting through your own Limited Company, through an Umbrella Company, as a Sole Trader or if you were to return to full time employment.

The123 Income Illustrator

Invoicing

Expenses

Expenses - Detailed Guide P1

Expenses - Detailed Guide P2

IR35

IR35 - Detailed Guide P1

IR35 - Detailed Guide P2

Company Secretarial

123 Referral

We run a simple referral programme where for every client you refer to The 123 Way we will give you £123.00

For more information check out the link below:

123 Referral

Personal Tax

Importance of Information

Important Dates

Being a Sole Trader

Calculators

FAQs

The 123 Blog

To keep up-to-date with tax legislation and 123 news check out the 123 Blog.

The 123 Blog

Disclaimer:
This information is for general information only. No responsibility is taken for any action taken or refrained from in consequence of its contents. Always seek professional advice before acting.

About us

Running a Limited Company

Contractor Expenses

Freelance

Freelance Case Study

Limited Company Accounts

Being a Sole Trader

Tax Return

Business Structure Review

Business Banking

Umbrella vs Limited Company

VAT Registration