Frequently asked questions

How do I sign up?
Complete the form on our contact us page and a member of the team will be in touch to talk you
through the process.

How do I get paid?
Your agency will pay your Limited Company plus VAT (if applicable).

All of the companies are operated by Light Oak who accept payment into our client account,
which acts as a bank account for each of the contractors’ companies, and then calculate the
most tax efficient way of paying the contractor.

In most cases the contractors will be paid a mixture of salary, expenses and dividends.
Light Oak then pay the contractor those amounts weekly.

How do I pay tax?
Light Oak calculate the corporation tax and VAT due and retain this safely in a client account,
paying it over to HMRC on the due dates, giving the contractor peace of mind that their tax affairs
are taken care of.

You will normally not have to pay personal tax until you become a higher rate tax payer. 
In that case the contractor will have to save his personal tax and pay it over when his tax return is due.

Will I be caught by IR35?
We have prepared a flow chart to identify if you should be trading through a limited company
or seek direct employment. We believe that if you intend to set up a limited company and are
prepared to take the risks and rewards of being in business then yes you should be outside
the scope of IR35.

However in practice companies are often set up with the best of intentions, then for a
number of reasons the contractor does not operate as intended. Therefore we plan on doing
an IR35 review, each year, once the company has operated for a period of more than one
year, to see if IR35 applies. The sort of factors we will look at here will be, has the company
had more than one customer, or have they managed to substitute the contractor for another one.
If it does we will contact the contractor and warn him of the risks, and quantify what will be
the tax effect going forward if he is caught by IR35.

What if I am already self employed?
A Limited Company is more tax efficient than being self employed, as you can be paid a
mixture of salary, expenses and dividends, which do not attract National Insurance.

How do I set up a company?
You don’t, we will do this for you! The company will be formed and set up normally on the
same day, another hassle free part of the service for you.

Do I have to set up my own company bank account?
No, we will handle all of your payments through our specially set up “client account”, this
saves you the time and costs involved in going to a bank.

Your money is received from the agency; we calculate the corporation tax and
VAT to be paid, then pay you the residual balance the same week, after our agreed fees. We
retain your corporation tax and VAT and pay this over to HMRC directly, ensuring that this is
paid on time and therefore protecting you and your company.

You can have your own bank account and in this scenario we work with you to tell
how much to pay yourself personally and how much needs to be saved to pay the tax when due.

Do I register for VAT?
We will register you for the Flat Rate VAT Scheme, if applicable for your company.

Your income will be charged, plus 20% VAT, to the agency, however a lower percentage
is paid to HMRC, this often can be a tax saving opportunity for many contractors

What expenses can I claim?
You can claim for any business expenses that are “wholly and exclusively for the purpose of
the business”. We will automatically obtain details of travel & subsistence from the agency.
This therefore reduces your taxable income automatically.

If you have any other business expenses you can let us know this and we will record these
as costs for you. We do not need to see the invoices, but you should retain these in case
HMRC require them.

How do I let you know of other sales I have made?
You should email othersales@lightoak.co.uk quoting your reference, if you have made other
sales through the company. You need to let us know the customer name and address, the
net sales, VAT and gross sales. We will then account for these sales for you.

You need to raise a VAT invoice for the sale, we can provide you with a template for this,
and the payment needs to be paid into our client account. Therefore it is best to contact us before
you work for another agent so we can facilitate this for you.

Due to the additional work required in recording and accounting for sales to other customers,
we charge £10 + VAT as a transaction charge to the company, and deduct this from the
payment to you.

What if I want to stop using the service?
As a director of a company, you have responsibilities to comply with Company Law.
Therefore you cannot just turn off the service without fulfilling your obligations. If you fail to
file final accounts and bring your tax affairs up to date, HMRC may apply penalties and
interest, and in addition in rare extreme cases criminal charges can be brought against
directors.

To help you with this we can offer a service whereby you can terminate at any time, and for
a final fee of £125+VAT we will bring up to date your company accounts, corporation tax
returns, payroll, dividend vouchers, p11d and VAT returns, and then dissolve the company. If
you want to look after the completion of the accounts and tax returns yourself, that is fine, we
will provide the information you require to do this yourself or pass onto another accountant.

As it is highly unlikely that this termination period will match with the period you have to file a
personal tax return for. We will either provide you with the information to put on your self
assessment tax return, or we will be happy to do this for you and would ask you to contact us
and we will provide a fee for this service.

The reason we charge a fee for doing this service is that it is likely you will have earnings
from other sources outside of the Light Oak calculations, which will need to be factored in.
It is your responsibility to notify Light Oak as soon as possible that you wish to terminate the
service, as weekly fees apply, and will be still payable until you notify Light Oak. When you
notify Light Oak the termination period and fees then start to apply from the first day of the
next week following the time you notify us.

If you work using the Light Oak service for 40 weeks or more, we will close this down for you
free of charge.