Starting up your own electrical business

There are well over 100,000 qualified electricians in the UK, but as our homes and businesses become more and more dependent on digital devices and wiring the electrical business is growing all the time.

CO-WORKING SPACES

Most people starting an electrical contracting business have several years of experience as an electrician working for other organisations, but you may also look to start up a business with a qualified electrician as a partner – teaming up business skills with the professional know how. Even if you’re planning to specialise offering some general electrical services can be a good idea and once you’ve decided on those services you can start getting the basic admin of starting a new business underway.

The process of setting up an electrical business can be broken down into 9 simple steps:

  • Researching your target audience.
  • Checking out who your competition is.
  • Choosing a name for your business.
  • Making sure you and your team cover all the skills needed.
  • Writing a business plan.
  • Working out where your finance will come from.
  • Choosing a business set up.
  • Joining relevant industry associations.
  • Registering as a limited company.

 

Legislation

You don’t need a licence to trade as an electrical contracting business, but you should consider joining a relevant trade association to gain the credentials your customers will want to see. There are a number of options available to you, including the Electrical Contractors Association (ECA for England and Wales), SELECT (Scotland’s Electrical Trade Association), the Electrical Training Trust (ETT for Northern Ireland), as well as others such as the NICEIC and ELECSA.

There are also many regulations that you’ll need to follow as an electrical contractor. For instance, all new electrical work carried out in England and Wales must comply with the Building Regulations – Part P. This is legally enforceable and can be achieved by following the British Standard BS 7671 ‘Requirements for Electrical Installations’ also known as the 17th Edition of the Wiring Regulations, published by the IET (Institute of Engineering and Technology. These cover low voltage electrical installations as well as microgeneration and solar photovoltaic systems.

You’ll need to check the legislation applicable to you when you’re setting up, but for certain types of work you may also need to comply with:

  • Health & Safety At Work Act 1974 (HSWA)
  • Electricity At Work Regulations 1989 (EAWR)
  • Provision and Use of Work Equipment Regulations 1998 (PUWER)
  • Electricity Safety, Quality & Continuity Regulations 2009 (ESQCR)
  • Construction (Design & Management) Regulations 2007 (CDM)
  • Construction (Health, Safety & Welfare) Regulations 1996 (CHSW)
  • Control of Substances Hazardous to Health Regulations 2002 (COSHH)
  • Personal Protective Equipment At Work Regulations 1992 (PPEWR)
  • The Waste Electrical and Electronic Equipment Regulations EU Directive 2005 (WEEE)

Your portable electrical equipment, such as drills and cable detectors, will also be subject to the requirement to have Portable Appliance Testing (PAT) every two years.

As an employer you also have an obligation to comply with Health and Safety legislation from the Health and Safety Executive (HSE).

You’ll also need to take out employer’s liability insurance if you employ staff and have public and products liability insurance too. These will protect you and your business if a member of the public becomes ill or is injured as a result of the work that you do.

 

Qualifications needed

Of course, if you’re not planning to do electrical work yourself you won’t need electrical qualifications, although they can help in understanding the business. If you’re carrying out electrical work you’ll need to be a fully qualified electrician.

There are a number of qualifications that you should look into including:

  • Diploma in Electrical Installation.
  • BS7671: 2008 – Certificate in the Requirements for Electrical Installation.
  • Certificate in the Building Regulations for Electrical Installations In Dwellings.
  • Certificate in Inspection, Testing, Design and Certification of Electrical Installations.
  • Certificate in Electrical Technology Engineering.
  • Code of Practice for In-Service Inspection and Testing of Electrical Equipment.

 

Finance

If you’re already an electrician you may have many of the tools and equipment that you need to carry out your work. You’ll also need a secure and reliable van or similar vehicle to get you to your customers’ locations.

Your average earnings are likely to be around £30,000 a year, but you’ll need to take your business costs into account too. These include:

  • Business premises – although these may not be needed if you’re starting a small business.
  • Fixtures and fittings for your business premises.
  • Utilities and services for your business premises.
  • A secure and reliable business vehicle.
  • The tools and equipment you need to carry out your work.
  • Any qualifications and training you may need.
  • Your insurance – electricians carry a higher risk so seek out a specialist insurer.
  • Fees payable for accreditation and registration to trade bodies.
  • The costs of employing staff.

You may also need to take on the services of a professional accountant, particularly if you’re contracting to the construction industry, where you’ll need to take the Construction Industry Scheme (CIS), with your tax being taken at source, into account. And remember to register for VAT if your turnover is above the threshold.

 

Setting up your electrical business as a limited company

When you’re starting up your electrical contracting business as a limited company you’ll also need to register with Companies House. This can be a quick and easy process with the help of a formations agent. When you choose The Formations Company it can take as little as three hours and with the special discounts we’ve negotiated, it can cost you less than the price of your Companies House registration fee.

Register your own business from £9.99

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Get up and running with everything you need to start and run your business. Subscribe and let us take care of your on-going filing requirements.

Starter

£29.99

+VAT

PER YEAR

RRP £220, SAVE 86%

Limited company

TFC support agent

TFC hub access

Business phone number

Business bank account

Tax and accounting

Digital docs

Confirmation statement

Dissolution Service

Company Filling Edits

Dormant Returns

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A recuring yearly payment that includes access all the services contained in the Pro bundle. Payment will automtically be taken on the day of initial purchase every year.

Limited Company documents

Certificate of Incorporation:

The certificate provides confirmation that your company has been incorporated under the Companies Act 2006.

Memorandum and Articles of Association:

The Memorandum of Association is a written legal agreement signed by all initial shareholders of a company, agreeing to form the company. Articles of Association are the written rules which define how the company will be run. These rules are agreed on and signed by the company director, shareholders and secretary.

Share certificates:

If a company is limited by shares, a Shareholder Certificate is sent out at the time of incorporation or just after incorporation. The certificate includes information such as the company’s registered address, plus the names and addresses of the shareholders.

Company must haves

Business Bank Account:

It’s a legal requirement to have a business bank account as a limited company. We’ve handpicked a range of different types of business bank accounts to suit all types of business. You can even get up to £100 cashback with some of our business bank accounts!

Bookkeeping software:

Bookkeeping software is essential for a new limited company as it's a legal requirement to keep financial records of the company. It can also save you a lot of time and money, even if you’re not ready to trade yet!

Business phone number:

Every business needs a new phone number and bOnline is here to make it clear and simple. You’ll get a new phone number with unlimited calls free for 90-days and only £9 per month, thereafter, so you can keep your business and personal numbers separate.Every business needs a new phone number and bOnline is here to make it clear and simple. You’ll get a new phone number with unlimited calls free for 90-days and only £9 per month, thereafter, so you can keep your business and personal numbers separate.

First board meeting minutes:

Even if you’re both a shareholder and director of your company, you’ll still need to hold an initial board meeting. It’s a legal requirement that if requested, you can provide the first board meeting minutes, as it is proof that a company director was formally appointed. At The Formations Company, we’ll provide you with a template to easily fill out your minutes.

Company must haves

Business Bank Account:

It’s a legal requirement to have a business bank account as a limited company. We’ve handpicked a range of different types of business bank accounts to suit all types of business. You can even get up to £100 cashback with some of our business bank accounts!

Bookkeeping software:

Bookkeeping software is essential for a new limited company as it's a legal requirement to keep financial records of the company. It can also save you a lot of time and money, even if you’re not ready to trade yet!

Business phone number:

Every business needs a new phone number and bOnline is here to make it clear and simple. You’ll get a new phone number with unlimited calls free for 90-days and only £9 per month, thereafter, so you can keep your business and personal numbers separate.Every business needs a new phone number and bOnline is here to make it clear and simple. You’ll get a new phone number with unlimited calls free for 90-days and only £9 per month, thereafter, so you can keep your business and personal numbers separate.

Guides and support

Hub business manager:

You can manage your business from your Hub business manager. Access invoices, company details and any additional services you might need, including bank accounts, insurance, websites and much more!You can manage your business from your Hub business manager. Access invoices, company details and any additional services you might need, including bank accounts, insurance, websites and much more!

Lifetime customer support:

When you form your limited company with us, you'll get lifetime support from your very own TFC Support Agent, who will be on hand to help and support your limited company.

Ltd company e-book:


Everything you need to know about owning a limited company and being a director is included in this eBook.

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Book a free, no-commitment consultation with an accountant and a trade mark attorney at a time and date that suits you.

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A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.

Registered office address:

On the public register, use our address as the business’s registered office address

Service address:

On the public register, use our address as all the directors service address

Mail forwarding:

Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.

Registered agent

Free for 3 months with this bundle

A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.

Registered office address:

On the public register, use our address as the business’s registered office address

Service address:

On the public register, use our address as all the directors service address

Mail forwarding:

Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.

Registered agent

Free for 12 months with this bundle

A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.

Registered office address:

On the public register, use our address as the business’s registered office address

Service address:

On the public register, use our address as all the directors service address

Mail forwarding:

Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.

Registered agent

A 3 in 1 service that protects your privacy, all other directors privacy and includes our mail forwarding service.

Registered office address:

On the public register, use our address as the business’s registered office address

Service address:

On the public register, use our address as all the directors service address

Mail forwarding:

Quick and efficient mail forwarding and junk mail filtering. No additional handling or postage fees.

Digital scan and send

We'll digitally scan all your mail, then email you a copy, making sure you get it ASAP.

Company admin

Our experts will take care of all the complicated companies house fillings you might need:

Confirmation Statement:

A confirmation statement is a snapshot of all the information about the company directors to make sure that Companies House's records are up to date. It's a legal requirement for limited companies to file a confirmation statement at least once every 12 months.

Dissolution service:

If you decide to close your limited company, you'll have to let Companies House know. There are several different ways of doing this depending on the circumstances of why you're closing your limited company.

Our experts will take care and take the necessary course of action with Companies House, should you need it.

Dormant returns

If you’re company has no ‘significant’ transactions in the financial year, it’s classed as dormant. In this case, we’ll file a Company Tax Return to show HMRC that your company is dormant so you don’t have to.

Company filling edits

At some point in your business's lifetime you'll need to make changes, be it changing a directors details, removing/adding a shareholder, a change of address or even changing the company name.

Company admin

Our experts will take care of all the complicated companies house fillings you might need:

Confirmation Statement:

A confirmation statement is a snapshot of all the information about the company directors to make sure that Companies House's records are up to date. It's a legal requirement for limited companies to file a confirmation statement at least once every 12 months.

All bundle add-ons

Crunch - Limited Company Pro

Crunch combine market-leading online accounting software with a team of expert accountants and client managers to create the UK’s greatest self-employed accounting solution.

PAYE Registration

Many business owners decide to pay themselves a wage below the tax threshold via PAYE. Make sure you are registered correctly by letting us handle this for you.

VAT, PAYE & MTD Registration

We'll take care of registering your business for VAT, PAYE and MTD. leave the complicated admin work to us and focus on your getting your limited company up and running.

VAT Registration

Crunch combine market-leading online accounting software with a team of expert accountants and client managers to create the UK’s greatest self-employed accounting solution.

Check & Send Service

Before your application is submitted to Companies House, be sure it is 100% complete and correct. One in ten applications are rejected the first time around, resulting in longer wait times.

International ID Check

If your residential address is not in the UK, we will need to run an international ID check to verify your details.

Fraud Protection Service

Protect your company from fraud by preventing changes being submitted via paper forms and secure your account with added notifications if anything changes.

PSC Online Register

By law all UK Ltd companies must have a 'Persons of significant control' register. Our online register is a simple and cost effective way to safeguard you and your business.

PSC Online & Printed Register and Minutes

By law all UK Ltd companies must have a 'Persons of significant control' register. Not only will you get an online register, but you£ll also get a printed version of it and minutes.

All bundle add-ons

Crunch - Limited Company Pro

Crunch combine market-leading online accounting software with a team of expert accountants and client managers to create the UK’s greatest self-employed accounting solution.

Registered Agent Monthly and Yearly

3 in 1 service that protects all directors, shareholders, PSC's and your personal address details. All your mail will be sent our London office address where we will filter out the junk and swiftly forward all important correspondence.

PAYE Registration

Many business owners decide to pay themselves a wage below the tax threshold via PAYE. Make sure you are registered correctly by letting us handle this for you.

VAT, PAYE & MTD Registration

We'll take care of registering your business for VAT, PAYE and MTD. leave the complicated admin work to us and focus on your getting your limited company up and running.

VAT Registration

Crunch combine market-leading online accounting software with a team of expert accountants and client managers to create the UK’s greatest self-employed accounting solution.

Check & Send Service

Before your application is submitted to Companies House, be sure it is 100% complete and correct. One in ten applications are rejected the first time around, resulting in longer wait times.

International ID Check

If your residential address is not in the UK, we will need to run an international ID check to verify your details.

Fraud Protection Service

Protect your company from fraud by preventing changes being submitted via paper forms and secure your account with added notifications if anything changes.

PSC Online Register

By law all UK Ltd companies must have a 'Persons of significant control' register. Our online register is a simple and cost effective way to safeguard you and your business.

PSC Online & Printed Register and Minutes

By law all UK Ltd companies must have a 'Persons of significant control' register. Not only will you get an online register, but you£ll also get a printed version of it and minutes.

Knowledge hub

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The Formations Company and Companies House

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What is a Private Limited Company?

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How long does it take to register a new company?

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When should I change from sole trader to limited company?

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Limited Company Vs Sole Trader: Advantages and Disadvantages

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Setting up a limited company for contracting

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