Back when I was contracting, I set up a limited company to better segregate my personal finances from my professional ones, and limit any liability arising from my activities. I made a number of rookie mistakes back then, the bare essentials for operating a company.

EDIT : in 2025 I am actually coming back to this. After doing some research, I had to refine some of the notes below.

Tips on setting up a company, dot-blog

Blogs abound about setting up your company, and they cover the same generic stuff: find your passion, know your market, do your feasibility research, etc, etc.

Cute, but what next? From a practical standpoint?

It’s all good to want to give advice about the jazzy parts of having your own business, but the hum-drum of managing a company remains.

I fell into a few holes as a result of not really being prepared, and not knowing what help was available. Here’s a blog post then about what I would recommend to myself given another go.

Register with a Coworking Space

EDIT : Not necessary. The sole reason to do this is for the use of a service address, and the accountancy services take care of this these days. So skip!

And use their street address. Specifically, find a coworking space that offers using their address to register your company at, this is usually a service they offer. You can also receive postal mail there.

Be sure to establish a regular check-in day where you pick up mail and do some admin – HMRC and Companies House will send important notices here.

The reason for this is that when you do register a company, the address you use there is what is publicly posted on the website of Companies House, and remains in the public history for the company forever. Don’t let this be your home address if you can afford it.

Get Accounting Software

EDIT : Usually comes with the accountancy service – check for this in the package on offer – usually it comes with freeAgent access as part of their deal

In the modern day and age, rather than keeping files and binders, it is possible to keep everything electronically. I came across one solution, FreeAgent, during a tech conference, right after I had dissolved my company (I couldn’t hack doing the admin). I realised then that I had been doing admin the hard way.

Get a solution that has an app where you can snap pics of your receipts and documents, and manage invoicing from.

So long as you keep the paper trail in some form – even as photos – then you should be fine – from HMRC’s website:

There are no rules on how you must keep records. You can keep them on paper, digitally or as part of a software program (like book-keeping software).

HMRC can charge you a penalty if your records are not accurate, complete and readable.

There are various alternatives to explore as far as software goes.

Get an Actual Accountant

You can find accountants online and locally. Paying an agreed fee, they can help prepare and file tax returns, notify you of what info you need to collect, pass it on to them, and let them do the complicated work. You can even given them proxy access to your HMRC account to act for you.

You will also want to know how to manage your self-pay. Typically you can pay yourself from your company coffer to your self as the director as a “dividend,” but I’m actually still hazy on how this works tax-wise. You would be best with a helping hand.

Oftentimes, you can simply search online for accountants in your city/area and pick. There are services ranging from one-off activities like annual returns, to continued support and finance advice, as well as PAYE management and basic financial HR services.

EDIT : As I research this again in 2025 , I see that registering with an accountant first allows taking care of many or even most of the not-my-problem-please facets of setting up a business, including incorporation of the business and providing a Service Address for both the company an the Director (you!) so as not to leak your home address to the public register. That and it can offer cloud-based accounting software to manage all the paperwork and share with your accountant, as well as bookkeeping on some accountancy service packages (invoicing, receiving payment, tracking receipts). Many include self-assessment help for the Director (you) so you also have that covered.

During my searching, I came across this list of IT contractors accountancy services. No endorsement. Just thought it was worth mentioning.

Consider your company name – or not

It’s possible to use pre-made companies – already filed with Companies House and pre-filled with required details, ready to go immediately. I’m not sure who this is really for, but if you don’t care about the company name, you can always go with this. Usually available on the websites of accountancy firms that assist with company incorporation.

The company name can really be many things, except for profanities and slurs:

• Companies called “Company”
• A company was once registered as an SQL injection, in reference to an XKCD comic !

If you have an idea for a company name, start searching to see if it exists. If it doesn’t turn up in Companies House’s database, it’s looking good. Be sure to search for it on Google too, just to see if a user took the name as a handle already, or if it’s got online presence in another country…

Create a Bank Account

There is no such legal thing as a “business account.” (I am not a lawyer) It’s a “product” concept that exists only at the banks’ level, for selling separate products and hiking fees on things – for example, if you typically handle cash, there’s a charge for other ways of paying in, and vice-versa; and also the monthly charge of having such an account. You could conceivably start an account on Monzo or Starling and just run with it – they’re the most practical for keeping on top of things.

That said, a lot of online payment processors ask the payer to confirm personal/business account, and business accounts also are meant to have better accounting software integrations so it may yet be acceptable just to be rid of the hassle and the cheap/shady-look of instructing clients to pay into a “personal” account for your business.

Expense Everything

Everything you could construe as a a business expense, pay for with your company bank account. Computers, stationery, commuting backpack, work travel, commuting charges, meal receipts when working away from home, etc.

Don’t forget to move the Coworking Space fees over (register with the space personally, register at Companies House, get a bank account, switch the coworking space billing – it’s a bit of a dance)

Just don’t expense social interactions, like dinner/drinks with a client or treating colleagues. You may be a director, but you’re a minnow in a sea of spend-sharks, and HMRC will not look kindly on such activity.

You Don’t Need VAT Registration… Probably

It’s a new level of complexity to manage which is usually not worth it at the start. Yes, you can claim VAT on big purchases, but how much that is worth versus actually getting work done is up to you. I think at some size, you eventually do need to register for VAT. Again, try to ensure the Accountant deals with this.

Spend Time Wisely

A reflection about deciding what is worthwhile doing : how much is your hourly time worth? How much time does it take to do The Thing ? How much do you make after lopping off expenses and initial outlays for The Thing ?

Often, the savings made on a purchase or profits on a small sale are not worth it, given the time you need to spend to carry out everything to transaction. Spend money wisely, but also spend time wisely as well. Studying and learning is typically a better pay off than putting hours into a small $10 knick-knack that you need to make, stock-track, market, pack and send.

Bill Your Expertise, Not Just Your Time

The common tale is worth retelling:

A plumber came to fix a problem. He turned a valve, and it was solved. He billed the customer $200. To the customer’s “I could have done that myself!”, he replied “yes, but I knew for sure which valve to safely turn.”

You are not simply billing for your time. You are also billing for the value of the expertise you have accumulated over your career so far.

Don’t Overthink It

I wanted to get companies to give me phased-out business laptops to repurpose with Linux to loan to students. I tried to look into what I needed to have to be an “electronic waste carrier” and what certifications were needed so that I could bill myself as one.

Turns out, I only needed to say that I was willing to take ownership of the laptops. I didn’t have to be a waste carrier to take ownership, other businesses could have just piled them to me to avoid having to deal with the wasting themselves. I would take on the responsibility of finding and paying actual waste carriers as necessary.

I lost out on lots of free laptops, and never got that idea off the ground.

Purchase a Domain Name

And auto-renew it. Never let it lapse. I lapsed mine when I closed the company, which really I should not have done. I registered mine for around £20 for a year originally. Now the scalpers want $4,000 for it. It’s lost to me forever.

Then, set it up with a website, or if you don’t want to do that, set it up with a github.io site which can just contain a redirect to your LinkedIn or LinkTree or whatever service you want to direct it to.

Never let it lapse. The $20 per annum is worth it usually – because it is your brand, and even if you dissolve your company, that brand will forever be associated with your name.

Branding Optional

Beyond actually owning your domain name, you don’t need a fancy logo or letterheaded paper. Something straightforward in bold serif/sans-serif should do, in one or two flat colours, to slip in to the invoicing template. If it can work in strict black-and-white, it’s best.

No need for a company shirt/jacket. No need for business cards (who even uses these in the tech industry nowadays), no need for a company phone – especially if you’re just going to be doing contracting. Maybe a company dumb-phone if you need end-customers to be able to call you, but consider if you really need a business number.

No need to plaster your domain name over your email – if your email provider allows you to bring your own domain name, then why not do it, but there’s no real need to, save for one exception: if you’re in web hosting, it sends the wrong message if you have in fact not catered to this triviality.

Don’t do B2C as a Freelance Service Provider…

End consumers are difficult to cater to, often with the haziest of requirements and least knowledge of what they want. As a tech professional, trying to service end consumers is difficult given how little budget the customer will have.

… or Have a One-Size-Fits-Most to Sell

This might sound like it’s very limiting as a service, but just look around at the services you do get for affordable prices, and see how shoe-horned they are. The tradeoff for budget solutions is off-the-shelf implementation. If you work B2B, expect to work more, be paid more, and put your energy there for implementing bespoke solutions.

After-sale support is also a question and whether you do this is up to you – I would recommend against doing so, as a small/freelance provider.

These musings are for B2C as a freelancer in tech. May or may not scale outwards to other industries, probably doesn’t apply to B2B.

Don’t Roll Your Own

The key message here is to not take on what you don’t need to or what you are unqualified to manage or create. Accountants do accounting, site providers do websites and eShops, accounting software tracks bookkeeping.

Don’t manage what you don’t need, stay sane, focus on where your interests truly lie.