Self employed vs small business

[stewmo]

Wondering if any of you subbie climbers out there have considered setting up a small business rather than being purely self employed, but still just being a subbie, not actually running a tree service. 
I’ve been wondering at what point it gets more tax efficient to be setup that way. 

Any thoughts welcome!

[treevolution]

Really depends on your personal situation. 

 

If you're profit is over £50000 but you could happily live under that then Ltd is better for tax reason. 

 

If you're under then you really have to do the maths taking in consideration additional banking and accountancy costs. 

 

 

[Puffingbilly413]

There are benefits and drawbacks either way re self-employed v ltd company.  Speak to a good accountant about it - ask about locally for someone who people find knows their stuff.

I'm a ltd company and it suits me better - granted the accountancy fees are a bit higher but that's about it. 

 

I also like having the liability element separated out between the company and me - this isn't the case with self-employed.

[Mark Bolam]

Can you explain the last paragraph in more detail Billy?

[Treetom15]

I would assume he’s referring to the fact that IF you have an insurance claim (on a biiiig f@&k up) and it costs more than your insurance will cover, if you are a LTD company then they only have access to the company’s assets, whereas if you are a sole trader and the same happens, then the sole traders assets are up for grabs-you could lose your house etc……. 
Unless I’m miles out? 

[Puffingbilly413]

24 minutes ago, Treetom15 said:

I would assume he’s referring to the fact that IF you have an insurance claim (on a biiiig f@&k up) and it costs more than your insurance will cover, if you are a LTD company then they only have access to the company’s assets, whereas if you are a sole trader and the same happens, then the sole traders assets are up for grabs-you could lose your house etc……. 
Unless I’m miles out? 

Yes @Mark Bolam - probably should have been clearer.  Basically being a ltd company means the director(s) can't have their personal assets targeted should things go tits up.  Actually - in theory I think we could be pursued but it would have to be a case of criminal neglicence or money laundering etc.  Not enough cash in tree work for me to be laundering though...

[Puffingbilly413]

29 minutes ago, Treetom15 said:

I would assume he’s referring to the fact that IF you have an insurance claim (on a biiiig f@&k up) and it costs more than your insurance will cover, if you are a LTD company then they only have access to the company’s assets, whereas if you are a sole trader and the same happens, then the sole traders assets are up for grabs-you could lose your house etc……. 
Unless I’m miles out? 

That's it

[Mark Bolam]

Thanks guys.

I stopped being Ltd when it became a bane financially, and also because I realised as a Director I wasn’t half as insulated as I thought I’d be, regarding house etc.

The rules may have changed a bit, we’re talking 15 years ago.

 

My bar-talk thoughts would be ST is absolutely fine unless you want to go bigger and run a bigger show with multiple crews etc., then Ltd. is probably the way forward.

@Clutchy will have a far better grasp than me, I’m just a bitter and twisted old bastard who hates anything to do with tax.

[Mark Bolam]

Or work.

[AHPP]

1 hour ago, Mark Bolam said:

Thanks guys.

I stopped being Ltd when it became a bane financially, and also because I realised as a Director I wasn’t half as insulated as I thought I’d be, regarding house etc.

The rules may have changed a bit, we’re talking 15 years ago.

 

My bar-talk thoughts would be ST is absolutely fine unless you want to go bigger and run a bigger show with multiple crews etc., then Ltd. is probably the way forward.

@Clutchy will have a far better grasp than me, I’m just a bitter and twisted old bastard who hates anything to do with tax.

Who told you what about limited liability being weak? You have to do something really stupid for the corporate veil to be pierced.