A limited company for engineers: the admin nobody mentions

It's a Friday in March. You've just done four nights on a bottling line: two drive faults and a gearbox that let go at 3am. You get home to a brown envelope from HMRC addressed to your company. There's an email from Companies House too, about something called a confirmation statement.

You set the company up last spring because a mate said it would save you tax. It took twenty minutes online. Nobody mentioned the rest.

A limited company suits some engineers well. But setting it up is the small bit. The real cost is the admin that turns up every year, whether you've worked or not.

You're a director now

Once the company exists, you're its director, and that comes with a list. A director must keep company records, prepare annual accounts, file a Company Tax Return and pay Corporation Tax (GOV.UK).

You can pay an accountant to do the work. You can't hand over the blame. You stay "legally responsible" for the records and accounts, and you can be fined, prosecuted or disqualified as a director if you don't meet your duties.

The company's money belongs to the company

Engineers coming off the tools get caught by this one more than any other.

The company is a separate legal entity, so its banking must be kept apart from yours (GOV.UK). The site pays the company. The company pays you. You don't dip into the account for fuel and a takeaway and sort it out later.

Money comes out in a few set ways:

• Salary. The company must register as an employer, even if you're the only director and the only person it pays (GOV.UK). So you run payroll and send PAYE reports every payday.
• Dividends. These can only come from profit. The company can't pay out more than its available profits from this year and past years. Each dividend needs a directors' meeting with minutes, even if you're the only director, plus a dividend voucher (GOV.UK).
• Expenses paid back to you, for business costs you covered yourself.

Anything else you take is a director's loan. You must keep a record of it, usually called a director's loan account, and it goes on the balance sheet at the year end. You may have to pay tax on it, and so may the company (GOV.UK).

Our view: pay yourself on a set day each month, as salary or a declared dividend. Don't move money across just because you're short that week.

The dates that come round every year

Companies House and HMRC each want something from you, on different clocks.

The confirmation statement checks that Companies House has your details right. That means your registered office, directors, shareholders, SIC code and people with significant control. You must file at least one every 12 months*, with up to 14 days* after the review period ends. Filing online costs £50* (GOV.UK). Miss it and you can be fined up to £5,000*, and the company may be struck off.

Annual accounts go to Companies House within 9 months* of your financial year end. Your first accounts are due 21 months* after the company was registered (GOV.UK). Late filing penalties for a private company start at £150* and reach £1,500* past six months. They double if you're late two years running (GOV.UK).

Corporation Tax is due 9 months and 1 day* after the end of the accounting period. The Company Tax Return is due 12 months* after it. HMRC doesn't send you a bill for Corporation Tax. You or your accountant work it out (GOV.UK). You still file a return if the company made a loss (GOV.UK), and a late return costs £200* on day one (GOV.UK).

The first year is messy. First accounts usually cover more than 12 months, but a tax return can't. So you may file two tax returns and have two payment dates (GOV.UK).

Then there's your own tax. If your dividends go over your unused Personal Allowance and the £500* dividend allowance, you need to report them to HMRC (GOV.UK). Self Assessment for contract engineers covers how that return works.

What the company costs to run

Corporation Tax is 19%* on profits of £50,000* or less and 25%* on profits over £250,000*. In between, you may get Marginal Relief (GOV.UK). Dividends are then taxed again in your hands, at 10.75%* in the basic rate band for 2026 to 2027 (GOV.UK).

On top of the tax, add the accountant's fee, payroll software, the business bank account and your own evenings. Put real numbers against each one before you decide the company is worth it. Umbrella, limited or PAYE covers how IR35 changes the sums.

The small print on the paperwork

Invoices must show the full company name as it appears on the certificate of incorporation (GOV.UK). Letters, order forms and your website must show the registered number, the registered office address, where the company is registered and that it's a limited company (GOV.UK).

Keep the company's records for 6 years* from the end of the financial year they relate to. Keep them longer for kit you expect to last more than 6 years. HMRC can fine you £3,000*, or you can be disqualified as a director, if you don't keep accounting records (GOV.UK).

Every director now has to verify their identity with Companies House. You do it once, through GOV.UK One Login, and the service is free (GOV.UK). You'll need the personal code it gives you to file the confirmation statement (GOV.UK).

The sites you work for will check you as well. Your insurance should be in the company's name, and insurance for contract engineers covers what they ask to see. They'll want your tickets too. Which tickets get you contract work covers the ones worth having.

Our view

A limited company suits an engineer with steady, well-paid contract work who will keep on top of the admin, or pay someone who will. If you're doing a few breakdown callouts a month, setting up as a sole trader is usually simpler. You can change later, and moving from sole trader to limited company is usually the easier way round (GOV.UK).

Whichever you pick, the dates don't move because you were on nights. Put them in the diary the week the company is formed.

What to do on Monday

1. Put every filing and payment date in your phone, with a reminder a month before each one.
2. Stop paying personal bills from the company account, and pay yourself on a set day.
3. Set up a director's loan account in your books, and clear anything you owe the company.
4. Verify your identity with Companies House if you haven't done it yet.

* Filing deadlines, fees, penalties, Corporation Tax and dividend rates, the dividend allowance and record-keeping periods correct as of 5 October 2026. Check GOV.UK's guide to running a limited company and accounts and tax returns for private limited companies for the latest.