Ltd company

[volvo]

If its a LTD company you will need a chartered accountant to finish of your books.

Try and get a small family firm if possible as they will be much easier to speak to.

[benedmonds]

A partnership is much simpler and cheaper.

 

We are changing from partnership to LTD, it is complicated and costly although we should save the additional costs in reduced tax.

Accounts need to be filed at companies house, meeting need to recorded when dividends are paid out. etc...

 

You do get some protection due to the ltd liablilty which means you are less likely to lose the house if it all goes pear shaped and your insurance wriggles out of covering you.

 

Your accountant is the real winner!

[turbull]

Find a good accountant and get some advice .

[Billy68]

setting up a ltd companys not that expensive

[Pedroski]

^^ exactly.

It's just cost me £18.00 to set up Ltd company. All you need is a few brain cells so you can follow and understand instructions to work out how to do it on the Companies House web site. Within 24 hours I received company certificate from Companies House. I also received details from a firm called The Company Warehouse with a log in so that I can download and use free accounting software, and access various offers including website design for £149. The biggest expense for me is likely to be the accountant for tax returns. I currently do my own self-assessment but this might change. Thinking it could be worth getting the Mrs properly trained up.

[Paul Smith]

Be careful with the company warehouse! They love taking your money but their customer service is terrible! I would not use any of their services again.

[benedmonds]

setting up a ltd companys not that expensive

 

It costs more then being a partnership, as you have to file returns etc. Our accountants bill is going up by about £1000.

 

I am no expert.. Spent some time confused by the accountant a few weeks back..

 

Paying dividends appears to be alot more complicated then just drawing out cash as and when. As partners we paid ourselves a "salary" each week, if you do that as a director of a LTD co you end up paying tax twice, once as corporation tax and again as income tax (if over the £8K threshold). Dividends can be paid once you have made a profit but you need to have recorded shareholder meetings!

 

It is not cost effective to run a car through the business either, trucks and vans are fine but company cars are taxed loads! Which is a shame as we just brought a toyota land cruiser... We can just pay milage on it now instead but it's all a faff you don't have in a partnership.

 

We should be able to save more tax then we lose however and the ltd liability although not 100% protection, still offers some.

[Pedroski]

Ben, are you sure you're with the right accountant? The limited co my mate owns and who I do most of my work with only pays about £900/yr and that include quarterly vat returns. Mind you, my mate's wife keeps the books in good order so everything is there for the accountant to easily see.

[Pedroski]

Re the tax thing:

Corporation tax is charged on your companies taxable profits. The taxable profit is the bottom line of your profit & loss account, which is income minus all legitimate business expenses. Your wages, as a company director/employee are legitimate business expenses and so come out of your company profits, thereby reducing your taxable profits. So you DON'T pay corporation tax on your wages. You ONLY pay income tax and NI on your wages.

[Peter]

It costs more then being a partnership, as you have to file returns etc. Our accountants bill is going up by about £1000.

 

I am no expert.. Spent some time confused by the accountant a few weeks back..

 

Paying dividends appears to be alot more complicated then just drawing out cash as and when. As partners we paid ourselves a "salary" each week, if you do that as a director of a LTD co you end up paying tax twice, once as corporation tax and again as income tax (if over the £8K threshold). Dividends can be paid once you have made a profit but you need to have recorded shareholder meetings!

 

It is not cost effective to run a car through the business either, trucks and vans are fine but company cars are taxed loads! Which is a shame as we just brought a toyota land cruiser... We can just pay milage on it now instead but it's all a faff you don't have in a partnership.

 

We should be able to save more tax then we lose however and the ltd liability although not 100% protection, still offers some.

 

There are ways of making regular payments, you can set up a director's loan account, so the co lends you money until the end of the year, then at the shareholders meeting the dividend is used to pay the loan account off. Only works if the co shows a profit though, otherwise you will have to pay income tax and NI on the difference.

 

Using your personal vehicle and getting paid mileage can work out well, probably not with a land cruiser though as the fuel consumption will eat up 45ppm all on its own!