Setting Up a Ltd Company as a QS: Step-by-Step Guide

If you're taking on freelance or contract work as a quantity surveyor, becoming a limited company quantity surveyor is usually the most tax-efficient way to get paid - but the process involves more moving parts than most QSs expect. Beyond registering with Companies House, you'll need a business bank account, the right insurance, an accountant who understands construction contracting, and a clear grip on IR35 before you sign your first contract.

This guide walks through the process in the order you'll actually need to do it: registering your company, opening a bank account, registering for Corporation Tax, appointing an accountant and getting insured, invoicing your first client, understanding your IR35 status, and the ongoing admin that keeps you compliant once you're trading. Each step includes the real costs and timescales to budget for in 2026.

This isn't a decision to take lightly. A limited company structure tends to pay off once you're billing a day rate of roughly £300 or more and expect to keep contracting for at least six to twelve months - below that, the extra admin may not be worth it compared with an umbrella arrangement. If you haven't worked out what to charge yet, our day rate calculator is worth running before you incorporate, since your expected billings should shape how you structure the company from day one.

One note before we start: this guide explains the general process and what to expect, based on current GOV.UK and Companies House guidance. It isn't personalised tax or legal advice - company structures, IR35 status and tax positions vary by individual circumstance, so speak to a qualified accountant or solicitor before you incorporate or sign a contract.

Step 1: Register Your Company with Companies House

What you need before you apply

Before you start the online application, gather the basics: a company name that isn't already registered and doesn't breach Companies House naming rules, a UK registered office address (this becomes public record, so many contractors use their accountant's address rather than a home address), at least one director, at least one shareholder (who can be the same person as the director), and a Standard Industrial Classification (SIC) code describing what your company does - your accountant can advise on the most accurate code for quantity surveying and consultancy work.

• Company name - check availability on the Companies House name checker and avoid restricted or misleading words.
• Registered office address - must be a physical UK address; a home address is allowed but becomes publicly searchable.
• Director(s) - at least one person, who must complete identity verification under the reforms introduced by Companies House.
• Shareholder(s) and People with Significant Control (PSC) - anyone holding more than 25% of shares or voting rights must be declared.
• SIC code - identifies your company's trade for statistical and regulatory purposes.

Registration is done through the GOV.UK online service and costs £100, paid by debit or credit card; most companies are registered within 24 hours. A postal application using form IN01 costs £124 and takes 8 to 10 days. Since Companies House's identity verification reforms took effect, every new director must verify their identity online via GOV.UK One Login before the company can be registered - allow a day or two for this if you don't already have a personal verification code. Once approved, you'll receive a certificate of incorporation confirming your company number and formation date - keep this safe, as your bank and accountant will both ask for it.

Step 2: Open a Business Bank Account

A limited company is a separate legal entity from you personally, so it needs its own bank account - you cannot simply run company income through a personal account. Most banks and digital providers will ask for your certificate of incorporation, your company number, and photo ID plus proof of address (dated within the last three months) for every director and any shareholder with significant control.

• Certificate of incorporation and company number
• Photo ID (passport or driving licence) for each director and PSC
• Proof of address dated within the last three months
• Estimated turnover and a description of your consultancy work

High street banks vs digital challengers

Traditional banks such as Lloyds, Barclays, NatWest and Santander offer business accounts with in-branch support, but approval can take anywhere from a few days to several weeks, and many charge a monthly fee once an introductory period ends. Digital-first providers such as Tide, Starling, Revolut and Monzo Business are popular with contractors because accounts can often be approved within hours or a few days entirely online, with lower or no monthly fees and integrated invoicing and expense tools.

Whichever you choose, look beyond the headline monthly fee - check transaction charges, cash deposit limits (rarely relevant for a QS invoicing consultancy fees), and whether the account integrates with the accounting software your accountant uses, such as Xero, FreeAgent or QuickBooks. Getting this right from day one saves considerable reconciliation time later.

Step 3: Register for Corporation Tax and Understand Your Tax Obligations

You must register your new limited company for Corporation Tax within three months of starting to trade - this means the point you start doing business, not simply the date of incorporation. Registration is done online through your HMRC business tax account, using the Unique Taxpayer Reference (UTR) Companies House sends you after incorporation.

How Corporation Tax works in 2026

Corporation Tax rates for financial years starting on or after 1 April remain banded: 19% on profits up to £50,000 (the small profits rate), 25% on profits over £250,000 (the main rate), with marginal relief tapering the effective rate for profits in between. Most freelance QS companies, particularly in their first year or two, sit comfortably within the 19% band.

VAT and Self Assessment

If your company's taxable turnover exceeds £90,000 in a rolling 12-month period, you must register for VAT - many QS contractors register voluntarily before this to reclaim VAT on expenses and appear more established to clients, particularly on the Flat Rate Scheme. As a director, you'll also need to file a personal Self Assessment tax return each year covering any salary and dividends drawn from the company, even though the company itself pays Corporation Tax separately.

Missing deadlines carries real cost: late Corporation Tax payment attracts interest, and late filing penalties start at £100 and increase the longer accounts remain overdue. This is precisely the area where a contractor accountant earns their fee - keeping you ahead of every deadline rather than catching up after a penalty notice.

Step 4: Appoint an Accountant and Get Insured

Why a contractor accountant, not a generalist

A good contractor accountant is arguably the most important professional relationship you'll build as a limited company director. They handle your annual accounts, Corporation Tax return (CT600), payroll if you draw a salary, VAT returns if registered, and your personal Self Assessment - and, critically, they should already understand IR35, day-rate contracting and the construction sector, rather than treating your company like a generic small business. Specialist contractor accountancy packages typically cost £80-£150 a month plus VAT, usually charged as a fixed fee covering all of the above.

Insurance you'll likely be asked for

Most agencies, contractors and consultancies won't place you on a contract without proof of insurance. Professional Indemnity (PI) insurance - typically £250,000 to £1,000,000 of cover - protects you against claims of negligence, errors or omissions in your professional work, such as an inaccurate cost estimate or a missed measurement that leads to a client's financial loss. If you're RICS-regulated, PI cover must meet RICS' minimum standards, including a requirement for run-off cover for at least six years if you stop trading. Public Liability insurance is also worth arranging if you're regularly on site, covering third-party injury or property damage claims. Budget £300-£800 a year for combined cover, depending on your level of cover and claims history.

Step 5: Invoicing Clients and Getting Paid

Once you're registered, banked and insured, you can start invoicing. A compliant invoice needs your company name exactly as registered, company number, registered office address, VAT number if registered, a unique invoice number, the client's name and address, a clear description of the work and dates covered, the amount due, and your payment terms.

Payment terms that protect your cash flow

Most agencies pay on 30-day terms, though some pay weekly or fortnightly for site-based contract roles - always confirm this before you start, ideally in the contract itself. Late Payment of Commercial Debts legislation entitles you to charge statutory interest (8% above the Bank of England base rate) plus a fixed compensation fee on overdue invoices, though most contractors reserve this for genuinely late-paying clients rather than routine use.

• Invoice promptly at agreed intervals - weekly or monthly, matching your contract's payment schedule.
• Keep a simple timesheet or day log as evidence to match against each invoice, especially for agency-placed contracts.
• Use accounting software (Xero, FreeAgent, QuickBooks) to generate invoices, track payment status and flag overdue accounts automatically.
• Chase overdue invoices promptly and politely - cash flow gaps are one of the most common financial stresses for new contractors.

Step 6: Understand IR35 Before You Sign Your First Contract

IR35 - the off-payroll working rules - determines whether HMRC treats a contract as employment for tax purposes, and it has a direct effect on how much of your day rate you keep. Since the 2021 reforms, medium and large private-sector clients (and all public-sector bodies) are responsible for determining your IR35 status, not you - so the decision is often made before the role is even advertised.

• Outside IR35: you invoice through your limited company and can extract income as a mix of salary and dividends - generally the most tax-efficient route.
• Inside IR35: HMRC treats the engagement like employment. Pay is taxed at source, usually processed through an umbrella company or the client's payroll, with income tax and National Insurance deducted before you're paid.
• Ask for the Status Determination Statement (SDS) - the written document explaining how the client assessed your status - before signing anything.
• Inside IR35, day rates are typically quoted 15-25% higher than outside IR35 equivalents, to compensate for the extra tax and lost flexibility.

Many contractor QSs keep their limited company for outside IR35 work and switch to an umbrella arrangement for individual contracts designated inside IR35, rather than trying to force every engagement through the company. Your accountant can help assess a contract's IR35 status and advise on the most tax-efficient way to take income once you know it.

Step 7: Ongoing Admin - Staying Compliant Year-Round

Incorporating is the easy part; staying compliant is an ongoing responsibility for the life of the company. Missing a deadline can mean penalties, interest, or in the worst cases, your company being struck off the register.

• Confirmation statement - due annually, confirming your registered details are up to date. Costs £50 online, £110 by post; failure to file can result in a fine of up to £5,000 and the company being struck off.
• Annual accounts - filed with Companies House within 9 months of your company's year end (21 months after incorporation for your first set).
• Company Tax Return (CT600) - filed with HMRC within 12 months of your accounting period end, alongside payment of any Corporation Tax due within 9 months and 1 day of the period end.
• VAT returns - if registered, usually filed quarterly through Making Tax Digital-compatible software.
• Self Assessment - due by 31 January following the end of the tax year, covering any salary and dividends you've drawn personally.
• PI insurance renewal - review your cover annually as your workload and contract value change.

Most contractor accountants build a calendar of these deadlines into their service and will chase you for the information they need well in advance - one of the strongest reasons the monthly fee is worth paying rather than trying to manage company filings alone alongside a full-time contract workload.

Frequently Asked Questions

How much does it cost to set up a limited company as a quantity surveyor?

Companies House registration costs £100 online, plus ongoing costs of roughly £80-£150 a month for a contractor accountant and £300-£800 a year for professional indemnity and public liability insurance. Many digital banks offer free company accounts for straightforward contracting income, keeping first-year overheads manageable.

How long does it take to register a limited company?

Online registration with Companies House is usually approved within 24 hours, provided your chosen name is available and all directors have completed identity verification. Postal applications take 8-10 days. Opening a business bank account typically adds a further few days to two weeks.

Do I need an accountant to run a limited company?

It isn't a legal requirement, but almost all contractor QSs use one. A specialist contractor accountant handles your Corporation Tax return, annual accounts, payroll, VAT and Self Assessment, and keeps you ahead of filing deadlines - missing these can result in penalties or your company being struck off.

What insurance does a limited company quantity surveyor need?

Professional Indemnity insurance (typically £250,000-£1,000,000 of cover) is generally required by clients and agencies, and is mandatory if you're RICS-regulated. Public Liability insurance is also worth arranging if you're regularly on site. Combined cover typically costs £300-£800 a year.

How does IR35 affect a limited company quantity surveyor?

IR35 determines whether a specific contract is taxed like employment (inside IR35) or allows more tax-efficient income through your limited company (outside IR35). Since 2021, medium and large private-sector clients make this determination, and you should always request the Status Determination Statement before signing a contract.

Can I set up a limited company while still employed elsewhere?

Yes - there's no restriction on directors also being employed elsewhere, though you should check your current employment contract for any restrictions on outside business interests or conflicts of interest, and be aware of the tax implications of drawing income from two sources.

What ongoing filings does a limited company QS need to submit each year?

At minimum: an annual confirmation statement (£50 online), annual accounts filed with Companies House, a Company Tax Return (CT600) and Corporation Tax payment filed with HMRC, and a personal Self Assessment return covering any salary and dividends drawn. VAT returns are also required quarterly if registered.

Final Thoughts

Setting up as a limited company quantity surveyor is a well-trodden path, and the mechanics - Companies House registration, a business bank account, an accountant, insurance and a clear read on IR35 - are largely the same whether you're taking your first contract or your tenth. What changes is how confident you feel navigating each step, which is exactly what a specialist contractor accountant and, where relevant, a solicitor are there to help with.

This guide sets out the general process based on current GOV.UK and Companies House guidance, but it isn't personalised tax or legal advice - your own tax position, IR35 status and company structure should be checked with a qualified accountant before you incorporate or sign your first contract. Get the foundations right early, and the admin becomes a manageable routine rather than a distraction from billable work.

Want the full picture? Ready to work out your rate before you incorporate?

Use our day rate calculator to set a realistic day rate before you set up your company, and read our companion guide, Freelance QS vs Permanent QS UK: Which Pays More?, to weigh up the wider trade-offs of contracting.