The purpose of the change is to encourage compliance and highlights the benefits of paying their VAT electronically.  It also removes the cash flow advantage businesses can benefit from by paying by cheque.

If paying by cheque, all businesses, including contractors with their own limited company, must allow enough time for their payment to arrive and to clear into the bank account no later than the due date shown on their VAT return. A cheque takes three bank working days to clear so it is important to be aware of this change to ensure you do not pay your VAT return late which could result in a surcharge.

HMRC advise that you should allow at least three working days for a cheque payment to reach them and a further three working days for the payment to clear into their bank account. This means if you were to pay your VAT return by cheque, send it off no later than one week before the due date.

Alternatively, a VAT return can be filed online and paid electronically. HMRC recommends that contractors with their own limited company make their VAT payments electronically as this is safe and secure. In most cases it also gives up to seven extra calendar days to pay or, if paying by Direct Debit, at least ten extra calendar days.

From April 1 2010 businesses with an annual turnover of £100,000 or more (exclusive of VAT) and all newly registered businesses must file their VAT returns online and pay any VAT due electronically.

Independent Contractor Services offers a Limited Company Service which aims to help you with setting up your own limited company. We also offer a free IR35 review and can give you accountancy support and expenses guidance at your request.

The REC has advised contractors affected by the umbrella company entering administration to contact the administrators, Carter Backer Winter.  It is now the responsibility of the administrators to pay any outstanding monies owed to contractors, however full settlements are unlikely.

Fiona Coombe, director of professional services at the REC, said: “Ultimately in the case of umbrella arrangements it is the choice of the worker as to who employs them. In cases of administration where the worker is employed by the umbrella company they would be able to claim unpaid wages from the administrator, who should write to them directly about this.”

The REC has also advised recruitment firms with contractors contracted through Albany to contact administrator Carter Backer Winter before processing any payments.

Independent Contractor Services have been providing solutions for UK contractors including Limited Company and Umbrella Services since 2002.

Among the words whose commercial use will now require permission, in order to stop businesses feigning some type of authority, are ‘adjudicator,’ ‘bank,’ ‘chamber of’ and ‘tribunal.’

Before any name on the restrictive list can be used, permission will need to be sought from Companies House the legislation states.

The organisation said in its guidance: “If you choose a name that includes any of these words you will need to write to the relevant body to ask whether they have any objection to the proposed name.”

Contractor UK recently reported that there are more than 70 words that remain from a previous list of names or expressions which are restricted, meaning permission must be sought before use, or that are banned outright.

Decades-old regulations on using company names “that are so misleading that they would be likely to cause harm to the public”, such as the 42 new entries on the list, were refreshed on October 1st.

As a contractor, a limited company is often considered the most prudent option if you are outside of IR35 (although it can also be an option if you are within IR35), as in many cases you will take home a greater proportion of your income than through an umbrella company.

Almost any firm of local accountants can help you to set-up a limited company for a fee, but they will almost certainly not have the specialist knowledge required to ensure you are compliant with specific contractor legislation such as IR35 and MSC.

For more information about the Limited Company Service we offer here at ICS, you can download a guide here.

ICS Accounting Ltd offers an innovative solution for the contractor market, designed specifically to support contractors in the running of their limited company. The comprehensive accounting, financial and tax planning package allows contractors to focus mainly on developing their business and maximising their income, in the knowledge that they have professional experts at hand to help deal with changes of this kind.

Key things which those with a limited company need to know from 1^st October, 2009 are:

• Every director will have a service address and a usual residential address however only the service address for each directorship will be made publicly available. The residential address will only be made available to public authorities and credit reference agencies. On 1^st October, a director’s current residential address will automatically become the service address. You can change this address on Companies House website from 1^st October.
• A companies registers may be held at the registered office address or at a single alternative inspection location (SAIL). However you must notify Companies House if you set up a SAIL address or if the SAIL address is moved. There may only be one SAIL address for each limited company. Once a SAIL address is set up, you can move the registers to that address by notifying Companies House. New forms are available by visiting the Companies House website.
• There have been a number of changes to make it easier to set up a limited company. Further details can be found by visiting the Companies House website.
• Company articles for new companies will now include the company’s objects and liabilities. These were previously in the memorandum.
• Any amendments to the company’s articles must be sent to Companies House within 15 days. Failure to do this could mean you could be liable to a criminal office and a civil penalty of £200.
• All Companies House accounts filing deadlines have been reduced by one month. For a private company it is 9 months and six months if you are a public company. If accounts are filed late, you will be liable for a late filing penalty of up to £1500.

Protected Online Filing (PROOF)

Corporate Identity Fraud is on the increase and smaller firms are just a vulnerable as large firms. Companies House have introduced a scheme called PROOF which ensures customers are protected from changes to their company details. Once you agree to file certain documents electronically, any attempt to file a piece of paper will be rejected.

More detailed information on the Companies Act 2006 can be found on the Companies House website.

Click here to learn more about the ICS Limited Company Service.