Limited Company or Self-Employed?

notanewuser

CKhalvashi wrote: »

Now we're approaching £80m t/o, I'm seriously considering returning to self-employment, as the £65000 + VAT audit costs are really putting a sting in the budget.

Then there's the privacy issue, of which I'm still using a friends apartment in Georgia as my 'residence', and lovingly having everything scanned, uploaded, emailed etc.

OP, are you thinking about purchasing £100k of equipment, or renting? You would be better off as Ltd if it's the first, for tax reasons, than if you were renting equipment. I work in entertainment, and you can spend £100, 150, 200k without thinking about it, so take this into consideration.

CK

Ah, a tax fiddling councillor. How novel.

CKhalvashi

notanewuser wrote: »

Ah, a tax fiddling councillor. How novel.

Knowing that the taxman will be seeing a 7 figure tax bill from me this year, certainly not.

Service address, and where I live, are two completely different things. Having a foreign service address means that unnecessary crap doesn't come through my letterbox.

I'm still domiciled in Georgia, as I have an intention to retire there, but on a UK Ltd, there's no way I could get away with it.

CK

Annisele

Suarez wrote: »

What are the costs of being a Ltd Company in comparison to a sole trader?

A limited company does have a few unavoidable costs; £10 here and £30 there to submit documents to Companies House. Mainly the cost is in extra administration.

Regardless of whether you go the sole trader or limited route, you can do the accounts yourself. I'm perfectly happy doing my own tax return, but I wasn't comfortable doing my company's accounts (I could have learned how - but I preferred to pay somebody else who'd already put in the time to learn).

My accountant ended up costing me about £1k a year, a few years ago. His advice was absolutely worth that to me, but on a smaller turnover I wouldn't have bothered.

Mistral001 wrote: »

What reason do your client give for this, if you do not mind me asking?

They didn't give me a reason. Some of them said they'd deal with partnerships but not sole traders, which made no sense at all to me. However, they were big, I was tiny (a one-woman-band), and if I wanted them as clients I had to follow their rules.

I've since wound up my company, so if I did do anything horrendous to them they can't sue it. If I'd been a sole trader, they'd probably still be in time to sue me - so in that sense they'd have been better off trading with me personally.

Mistral001

Annisele wrote: »

They didn't give me a reason. Some of them said they'd deal with partnerships but not sole traders, which made no sense at all to me. However, they were big, I was tiny (a one-woman-band), and if I wanted them as clients I had to follow their rules.
.

Some large clients will only work with partnerships because of risk of sickness in the one-man/woman businesses. Also they see one-man businesses as vulnerable to not being able to cope with surges in workload.

meastwood

Wow - Thanks for all the replies. There is some pretty good information there. I think I will go sole trader to begin with, but I was wondering if I could use a 'business name' and still be classed as a sole trader??

I want to appear as a business not by my own name.

meastwood

I think eventually setting up a limited company will be more professional and I intend to do so, however I think I'll save all the paperwork for another time.

gb12345

meastwood wrote: »

Wow - Thanks for all the replies. There is some pretty good information there. I think I will go sole trader to begin with, but I was wondering if I could use a 'business name' and still be classed as a sole trader??

I want to appear as a business not by my own name.

You can use a trading name as a sole trader, so you would be Joe Bloggs t/a Bloggs Enterprises and that must appear on your business correspondence etc.

meastwood

Mistral001 wrote: »

Unless you are presenty earning in the higher tax bracket and/or perhaps have a spouse who is not working then few tax advantages in going ltd. Lots of disadvantages such as, having to put details of finances of company in public domain every year and additional admin costs , though there are some here who will tell you that it cost you only a few quid and you can do it in 10 mins.

I do have a spouse who is not working - how would registering as Ltd benefit us?

Mistral001

meastwood wrote: »

I think eventually setting up a limited company will be more professional and I intend to do so, however I think I'll save all the paperwork for another time.

More professional? To some people yes, but not to most business people and professionals. You have to look at the reasons for going Ltd. It is so that you can take greater risks without putting your own personal finances at risk. This means that you will be putting suppliers' money and eveybiody that gives your business credit at risk.

Also most professionals such as solictors, self-employed doctors, architects etc do not form Ltd companies as putting yourself in a position where people and businesses that you owe money to could end up not getting it is could be considered a professional miscondauct matter.