Jump to content

Log in or register to remove this advert

Ltd company


Recommended Posts

Log in or register to remove this advert

  • Replies 35
  • Created
  • Last Reply

Top Posters In This Topic

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!

Link to comment
Share on other sites

^^ 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.

Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share


  •  

  • Featured Adverts

About

Arbtalk.co.uk is a hub for the arboriculture industry in the UK.  
If you're just starting out and you need business, equipment, tech or training support you're in the right place.  If you've done it, made it, got a van load of oily t-shirts and have decided to give something back by sharing your knowledge or wisdom,  then you're welcome too.
If you would like to contribute to making this industry more effective and safe then welcome.
Just like a living tree, it'll always be a work in progress.
Please have a look around, sign up, share and contribute the best you have.

See you inside.

The Arbtalk Team

Follow us

Articles

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.