As a contractor you may have chosen to operate under a limited company.
Assuming of course that you are outside of IR35, operating as a Limited Company will usually have tax benefits as well as providing protection by way of limited liability.
However there is a cost to this set up – the responsibilities of operating as a limited company are often more onerous that if you operated as a self-employed sole trader or under an Umbrella company.
As a director, you are ultimately responsible for what happens in the company.
You are expected to know the responsibilities that the company has to adhere to; if you’re not familiar with them then you’ll be expected to appoint someone (an accountant) who can help you.
It is not defence to simply say that you did not understand the responsibilities – that just won’t wash.
There are some quite hefty fines and penalties which can be incurred for getting things wrong such as PAYE, VAT, Corporation Tax, filing Accounts and Annual Returns (soon to be renamed the Confirmation Statement).
The more you understand, or have someone else doing things for you, the less likely things will go wrong meaning that fines and penalties can be avoided.
A company is an independent legal structure recognised in law.
You and your company must be treated separately which means keeping all finances apart; having a business bank account helps with this.
Taking short cuts, trying to do things that you do not understand yourself can lead to problems.
If you are unsure getting an accountant on board will be the best course of action so that you can avoid incurring fines and penalties.
Don’t put the tax benefits at risk by getting things wrong.