Ltd & VAT

[Fencing]

Hi Guys,

 

Im a fencing person (boo hiss)

Im going to have to go VAT reg.

Previously ive always done all my own accounts, i spoke to my wifes accountant, and she said ok, if you go VAT go Ltd at the same time.

 

Whats the general concensus on doing both at the same time, pitfalls, pros cons etc? Anything you did you wish you didnt visa versa?

 

My dad said i need to go through things with an accountant first to make sure things are done in the correct way but i wanted to get some info from you guys first so that i can ask some more specific industry type questions

[skyhuck]

Hi Guys,

 

Im a fencing person (boo hiss)

Im going to have to go VAT reg.

Previously ive always done all my own accounts, i spoke to my wifes accountant, and she said ok, if you go VAT go Ltd at the same time.

Whats the general concensus on doing both at the same time, pitfalls, pros cons etc? Anything you did you wish you didnt visa versa?

 

My dad said i need to go through things with an accountant first to make sure things are done in the correct way but i wanted to get some info from you guys first so that i can ask some more specific industry type questions

 

:sneaky2:I bet she did

 

It costs far more to do "Ltd" accounts than "sole trader" accounts, so your accounted would prefer us all to go limited.

 

You need to look into it closely to see if its advantageous for you to be Ltd.

 

I started a Ltd Co in 2000, but at that time Gordon Brown had set a trap to get people to go limited, he gave us tax free dividends up to £30K, he closed the trap in 2005.

 

Corporation Tax is currently pretty much the same rate as the lower rate income tax, so unless your a higher rate tax payer I'm not sure what advantage there is.

[gensetsteve]

Its worth considering if you have alot of assets like you own your house ( no mortgage ) you earn over 30k a year. Easier to get credit. Large companies like the LTD bit when giving out contracts. You will pay alot more national insurance. The idea seems to be you can put all your eggs in one basket take stupid risks everyone else gets screwed but you if it goes wrong.

[Stephen Blair]

Vat reg is easy, speak to the Vat people they will keep you right.

As far as ltd is concerned the guys have covered it.

[Steve Bullman]

I spoke to my accountant about being Ltd......She basically said she would be happy for me to go ltd, and it might save me a little bit of money, but I would have to be a whole lot more disciplined with my bookwork....that ruled me out!

[likeitorlumpit]

Limited means you can earn what you want.

[Steve Bullman]

How so? You can as a sole trader? Its only limited by how much you physically earn surely?

[likeitorlumpit]

You take your tax code as wages and then a dividend as you want. This can be helpful.

[Steve Bullman]

how is the dividend taxed?

[likeitorlumpit]

Can't remember- think its 20%

There are times when not taking the dividend is helpful