Setting Oneself Up as a Limited Company

daveshoelace

Hi Guys,

I have been self employed as a sole trader for 5 years, and have been informed by several people, including my accountant, I would be better off setting myself up as a limited company.

I have done some research and it looks like it would suit me.

I understand the basics, but not particularly well. Is anyone aware of a resource out there that can show me the differences day to day? Ideally it would be something where I could actually compare this tax year as a limited company to how its been as a sole trader.

I understand the fundamental differences, but just finding the small details confusing.

thanks in advance

Suarez

Hi Dave,

What was your turnover last year?

daveshoelace

Suarez wrote: »

Hi Dave,

What was your turnover last year?

About £32,000, its set to be about £40,000 this year.

chalkie99

It doesn't matter what the turnover is, it is the taxable profit which counts and, actually, as you have an accountant he is in the ideal position to list out the figures for you.

Ask him if he is prepared to do that without charging you a fortune.

Other than taxes, there are other aspects to being limited, mainly the protection offered against losing unsecured assets if things go wrong, so it might be a good move anyway.

Premier_2

daveshoelace wrote: »

Hi Guys,

I have been self employed as a sole trader for 5 years, and have been informed by several people, including my accountant, I would be better off setting myself up as a limited company.

I have done some research and it looks like it would suit me.

I understand the basics, but not particularly well. Is anyone aware of a resource out there that can show me the differences day to day? Ideally it would be something where I could actually compare this tax year as a limited company to how its been as a sole trader.

I understand the fundamental differences, but just finding the small details confusing.

thanks in advance

Yes, the answer is in the question

tinktay84

I have just been to a different accountant to look at the possibility of changing accountants and was told that becoming LTD was in my interest. I was totally bamboozled to be honest as he was interspersing stories within the info so I had no idea where I was up to!

LTD always looked scary before and I had people saying dont do it so im now confused as hell!

InsideInsurance

Your existing accountant should be able to give you a simple excel spreadsheet showing you the difference.

If you have an accountant then to you there will be little difference on a day to day basis other than a slightly higher accountants bill and having to be stricter with your discipline of what is yours and what is your business'. A Ltd is a legal entity in its own right and what it earns is its money not yours so if you're a bit short you shouldn't just take a tenner out the business account, this should have to be dealt with either as a loan from the business to you or a dividends payment in which case if you have multiple shareholders you'd need to ensure they also receive their dividends payouts too.

If you didn't have an accountant then the returns you need to do are significantly more complicated than those for a sole trader but are by no stretch of the imagination impossible for the lay person to do.

Mistral001

There are more aspects to becoming Ltd than just tax. Perhaps you should look at those aspects as tax laws can change and in this climate they are very likely to change as government attempts to block up tax loopholes.