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The Ember Blog

If you're finding it difficult to know where to start your journey as a contractor, start here: our simple 6-step guide to setting yourself up as a contractor.

6 simple steps to start your company as a contractor

So, you've decided to make the exciting leap from employee to contractor. You've secured your first contract and celebrated accordingly, but now's the time to get everything set up before you sign on the dotted line.

The process of setting up as a contractor can be daunting. If you've always worked as an employee, you've likely never have needed to worry about the admin things like accounting, insurance or setting up a company.

We've been contractors before and we know first-hand how tricky getting set up can be. That's why we've put together this handy guide to help simplify it all for you.

Choose your company name. There are rules for company names which you can check here. Company names also have to be unique, you can check if your name is available here.

Set yourself up as Managing Director. Directors have responsibilities such as paying Corporations Tax and keeping company records, you can familiarise yourself with the full list here. You can also check the records you'll need to keep here.

Register your company. You'll need to register an official address and choose an SIC code which identifies the products or services your company provides. You can check the rules for a company address here and choose the correct SIC code here. To register your company with Companies House you'll need to follow this link.

Opening a business bank account can often be more complicated and time-consuming than you'd expect. Additionally, the process can differ greatly between banks. In order to register for a business bank account you'll need the following:

Proof of ID (passport, photo driving license or national ID card)

Proof of address (utility bill, council tax statement, recent bank statement).

Full business address (including postcode)

Companies House registration number (for limited companies and partnerships)

It's also important to choose a bank that suits your business needs. Top tip: we'd recommend checking out Money who have put together a great comparison of business banking products.

HMRC requires you to register for VAT if your VAT taxable turnover goes above £85,000, or if you know that it will. Your VAT taxable turnover is the total of everything sold that is not VAT exempt. You can also register voluntarily if your business turnover is below £85,000. You must pay HMRC any VAT you owe from the date they register you.

Most businesses can register for VAT online here.

IR35 is comprised of two sets of tax legislation designed to combat tax avoidance by contractors and the companies hiring them. It's intended for contractors who are supplying their services to clients via an intermediary, such as a limited company, but who would for all intents and purposes be an employee if the intermediary wasn't being used.

If you are deemed by HMRC to be working as an employee under IR35 you'll have to pay income tax and National Insurance Contributions, as if you were employed.

The good news is that as a contractor, you aren't responsible for determining your IR35 status. That responsibility falls to the company hiring you.

It's important to insure yourself as a contractor. There are two popular types of insurance cover for contractors: Professional Indemnity Insurance, which covers you in the event that you give faulty advice that might cause financial loss to a client, and Public Liability Insurance, which covers you if someone becomes injured or their property becomes damaged because of your business.

You can compare business insurance services here.

Last but not least, accounting is regularly a pet frustration for contractors. When it comes to making sure you're financially compliant, you can either go it alone and navigate the complex accounting system yourself – which is often confusing, time consuming and opaque – or you can hire an accountant to do it for you at considerable cost. As of recently, however, there's a third option: Ember is the first platform to completely automate the accounting process for contractors and SME's. It's simple and intuitive software that shows you only what you need to see – like how much tax you owe and when it needs to be paid – and does all the complicated stuff in the background. Expenses will be automatically categorised and your VAT returns, taken care of. It's seriously great – and if you sign up today here, you'll get 30 days free with an early adopter bonus of 10% off for life.

It's a big bad world out there for contractors, but we're here to light the way, and lighten the load.

It's an exciting time at Ember HQ – we've just closed our first round of funding.

Ember close round of funding

Led by the Startup Funding Club alongside a small group of angel investors, we've raised £250k to get Ember off the ground and into the hands of modern contractors across the UK.

It's been a rich and rewarding journey so far – recognising a gap, aligning on a vision and getting stuck into building the product – and now we're ready and excited to take Ember to the next level. The capital we've raised will accelerate product development and ignite our launch nationwide. We have so many big ideas about how to alleviate the stress of tax and accounting compliance for independent contractors. With the backing and support of our investors, we can't wait to unlock their potential and bring them to life.

Join us or follow our journey by signing up here. We're creating a future where independent workers, businesses and contractors can thrive without the need for an accountant – and as accountants ourselves, we're pretty damn excited.

Software designed for small business owners not accountants. No more accounting jargon, clunky spreadsheets, piles of receipts or stressful tax returns. Just full visibility of your company’s finances in real time, all the time.

Introducing Ember: Accountant-free accounting, for contractors.

The world of work is changing, and the modern workplace (or lack thereof) has never been as exciting as it is today. Jobs have become fluid and work days, flexible; our holidays, unlimited and our colleagues, machines. Driven by technology and accelerated by culture, we’ve gone from closed companies of employees to dynamic networks of contractors. Everything about business is opening up…

It’s difficult to believe that, in an age of automation and professional autonomy, a trade as manual as accounting is still stuck in the dark ages. It’s full of complicated jargon and restrictive compliance; it requires us to pay someone else to know more about our numbers than we do. We’ve managed to bypass the recruiter, the landlord, the salesman in every other aspect of working life – so why is the accountant still very real, very ‘necessary’, and very expensive?

They don't need to be. At Ember, we’re excited by a new age of small business finance that puts the power in the hands of the owner. We've got nothing against accountants; we’re accountants ourselves, hell-bent on catching financial compliance up with the modern day.

Having worked as independent contractors in the UK, we were struck by how labour-intensive the process of small business finance remains: hours spent decoding HMRC’s website, precious time wasted categorising expenses, all whilst feeling increasingly anxious and in the dark about what the accountant was lodging on our behalf.

So we started Ember – a brighter way to account for your business, from starting it, to closing it, and everything in between. Ember is the single software you need to manage your financial obligations. It’s an open system built for the open talent economy: words like debit, credit, ledger, reconciliation and journals are replaced with language you understand, and all the number-crunching you’d be paying an accountant £120 per month to do, is taken care of in the background. What you see is the important stuff: your tax position in real time, your automated tax return for review, all the important numbers in one central feed.

We believe in an economy powered by small business, where everyone is able to work freely and flexibly, with no barriers to contracting or going it alone. Ember is here to empower your ambition. We don’t take accounting lightly, but what matters to us is that you can.

Jump onto our waitlist here to be one of the first to pilot the future of small business accounting & tax management.

Ember is proud to announce they have recently been granted a position on the NatWest Pre-Accelerator programme.

Ember accepted on Pre-Accelerator

We are excited to announce that Ember has recently been granted a position on the NatWest Pre-Accelerator programme. The opportunity comes at the perfect time during the funding round as it will open the team up to key funding events, online learning materials and the chance to progress on to the Accelerator.

Proving yet another important step in raising the profile of the brand and affirmation of the teams vision for the future of banking and accounting.

Further updates to follow after kick off at the 'Ignition' event on the 17th of June 2019.

Ember accepted on Pre-Accelerator programme

The Ember Blog

6 simple steps to start your company as a contractor

We are fully funded!

Introducing Ember

Ember accepted on Pre-Accelerator programme