Sole trader versus ltd company

PlutoinCapricorn

Who knows what changes to the state pension will be made in the future! It is understood that self employed people must make their own arrangements. Perhaps the OP has a PAYE job and SE is extra.

I am sure that there must be a writers' forum out there somewhere where these things are discussed in detail.

James_Trimby

Thanks for Pennywise for reminding me re the "bonus" on the second state pension. Not sure the basic level of extra earnings pension at £10k pa will compare with costs and hassles of running a company but on top of the tax savings it all helps! but worth reminding people that if not doing some of these tax savings should end up in long term savings/pensions to cover the lower levels. Dependant on age there is also the whole question of what is going to happen to the state pension in future anyway but so far I dont think they have ever changed it retrospectively !

Chinkle

Not working elsewhere, so this is my only source of income, so what to get it right.

Again, I know things like pensions need to be taken into account, but that means taking a really long term view of what will happened with state-funded pensions over the next 25+ years for me and that is anyones guess!!

JamesTrimby - I hear what you are saying - see an accountant, I just want to be armed with info before hand. Btw, what's the best route to track down a good one?? I don't know anyone who can give me a personal recommendation

PlutoinCapricorn

Here is a website with an example of the sort of figures that you wanted:

http://www.resultsforbusiness.co.uk/tax/soletraderorlimitedcompany.shtml

James_Trimby

HI

I'd vistit a few accountants and compare the advice and also whether you get on with the person you are seeing (assuming he will be youor normal contact of course!) stick to smaller qualified practices should get you good but not too expensive advice. I would always recommend a chartered accountant (otherwise my institute would kick me out!) but at least that or chartered certified accountancy practice. Without personal recommendation it is difficult but if go armed with info from places such as this and business link you should get an idea from initial meetings whether they know their stuff from a practical angle and, as I said, you get on.
Hope this helps James

roger196

Have you considered the LLP ( limited liability partnership) route. It has the advantage of limiting your personal liability if the business goes TU. It pays income tax not corporation tax. Filing and accounting requirements are not too burdensome provided you remain small. When I had an LLP, i did all my own accounts and filing. Search on companies house for more info.

PlutoinCapricorn

LLP does not sound very suitable for a freelance writer: I think that the worst could happen to him is not getting any sales.

roger196

PlutoinCapricorn wrote: »

LLP does not sound very suitable for a freelance writer: I think that the worst could happen to him is not getting any sales.

Have you seen the libel damages and costs recently on learned articles. see private eye for more details.

PlutoinCapricorn

Professional indemnity insurance? It is up to Mr Chinkle to do the research and get opinions from qualified accountants etc. but being a sole trader seems the simplest, most suitable option to me.

Chinkle

Its Ms Chinkle - and she has fired off some emails and looked at the freeagent softeware too (thanks for the recommendation). Once I've heard back from some I'll go along with my questions and income projections and take it from there.