Sole trader to Ltd

[Doug Blease]

Was it a pain when you turned VAT registered and LTD from a sole trader Matt?

[Highland Forestry]

Was it a pain when you turned VAT registered and LTD from a sole trader Matt?

 

To be honest Doug, no.... not really.

 

I was a sole trader, and then went VAT registered, and then decided to go Ltd.

 

The VAT side of it is easy enough, effectiley it's a new VAT registration for the Ltd company but I let the accountant deal with all of that and just pay his bill..... I'm about £650 a year for accountancy fees which is for all the book keeping, accounts and 4 VAT returns a year and the final audited accounts.

 

I learned a big lesson over christmas actually...

 

If you need a plumber - call a plumber..

[Doug Blease]

Ha ha, thanks Matt. That sounds like a decent price for all that accountancy.

 

Not sure if you actually needed a plumber or if you had attempted some accountancy yourself! But I know what you mean.

 

Thats all great info guys. I will let you know what the accountant is saying regards this. But it sounds like the way to go for the future.

 

Thanks again.

 

Doug

[gensetsteve]

I am still sole trader. I tend to play safe so at the moment dont feel the need to limit my liability. If you have a financial risky idea it would pay. Also no one has mentioned getting credit accts. I am squeaky clean and have been in business since 92 but now find nearly impossible to open trade accts, anyone else finding this ?.

 

If you are ltd they can do a credit check in minutes sole trader costs more money and takes for ever

[Doug Blease]

Genset Steve,

 

I understand what your saying. I am in the same position really. Not tens of thousands of assets to protect. So the benefits for me will perhaps be tax, how clients perceive my business and a simultaneous introduction to the VAT system.

 

Credit check is such a standard thing these days, if you have a good score then there should be no problem in people checking it out.

 

DB

Edited January 8, 2010 by Doug Blease

[Matt Adams]

the only reason i see, is if you are nearing the 40% tax bracket. i changed from sole trader to ltd, coming up to 1st year end, and are now thinking of changing back to sole trader! my situation has changed over the year so turnover is down and with corparation tax @ 21% and dividend tax @ 10% (under £37K) will end up paying more tax than if i just payed income tax @20%. if you have any employees on paye, you must tell hmrc the ltd company is paying their tax/ni, not you as a sole trader.

[Doug Blease]

Thats interesting, thanks Matt.

[skyhuck]

the only reason i see, is if you are nearing the 40% tax bracket. i changed from sole trader to ltd, coming up to 1st year end, and are now thinking of changing back to sole trader! my situation has changed over the year so turnover is down and with corparation tax @ 21% and dividend tax @ 10% (under £37K) will end up paying more tax than if i just payed income tax @20%. if you have any employees on paye, you must tell hmrc the ltd company is paying their tax/ni, not you as a sole trader.

 

Is it not on a taper from 0% to 10% up to £30K??

 

Also don't you pay less TAX on assets, as they belong to the Co not you??

 

I'm no exspert n tax, but my accountant assures me that being LTD is tax efficient for me and my wife (She is the Co secretary)

[Highland Forestry]

Is it not on a taper from 0% to 10% up to £30K??

 

Also don't you pay less TAX on assets, as they belong to the Co not you??

 

I'm no exspert n tax, but my accountant assures me that being LTD is tax efficient for me and my wife (She is the Co secretary)

 

Yep, my Accountant told me I could pay £1200 a year into my daughters account tax free, and £80 a week to the misses also tax free...

 

There are some good benefits to being a Ltd company.. Tax effective is the way to go, and that's which ever way suits the individual case.

[Matt Adams]

skyhuck, how long have you been a ltd company?