There is a lot of confusion and misinformation about this!
A lot of people want to take action and get everything ready ahead of time.
While there is nothing wrong with this, talking to an accountant and having a plan in place to form a company is really all the action that you should be taking.
Ideally, you only want to set up a company once an offer has been accepted. It will take the solicitors a week just to exchange details with each other. Your broker will need an up to date fact find to get an idea of what lenders are suitable. You will most likely appoint a surveyor to do a home buyer’s report for you. This all takes time!
We can get you through know your client and antimony laundering checks, get you engaged as a client and the company set up in under a week. Basically, we can work faster than all the other cogs in the wheel!
The exception
There is always an exception – and in this case it is auctions!
If you wish to buy at auction you need to arrive in the room with your company formed as when the hammer goes down, you have exchanged contracts and the auction house will want to know who is buying the property.
Auctions are not a good place for beginners to go source properties as once the hammer falls – you are committed to buying it whether it has issues or not.
A sourcing business
This is the other exception. You will need a company name, registration number and tax number to get all the paperwork in place to be a fully compliance sourcing agent. A company will need to be set up and can’t be used for the 8-odd weeks it takes you to get set up. This is just another cost of doing business.
What happens if I have a company set up already?
What’s done is now done.
If you get to the end of your company year, the Queen will expect a company tax return. Companies House will expect statutory accounts and their other compliance requirements be adhere to. There are fines for non-compliance and late delivery.
This applies even where life has got in the way and you haven’t actually been able to complete on a property purchase. We see this all the time!
This is just another business costs and the cost of not having the right advice or having the right team around you. You’ll make lots of mistakes on your property journey and in my experience, mistakes cost on average £3k each. This is, thankfully, a far cheaper mistake so don’t beat yourself up.
Just go use your company now and get some value for it!
Conclusion
Speak to us so you know what costs and options are available to you once you need to move ahead. Armed with this information – ignore it and focus on finding a deal. Once you have had an offer accepted, dust it off and come back to us.
We offer a free standard company setup as part of our on-boarding process.
