Going from self employed to LTD

paul1985

Hey guys,

New to the forum and looking for some advice regarding changing status from self employed to LTD.

I'm currently a self employed videographer with a turn over of £60k per year. After expenses of around £15k (£5k per year on business equipment and £10k per year on business expenses) I make around £45k.

My wife has just registered self employed and i've been paying for some freelance work she is doing for me as a video editor. This is her sole source of income. In the new tax year I was planning to pay her around £1k per month for the editing work which would help lower the amount of tax I'm paying but would still bring in the same money to our household. Based on this, I estimate my profit in future years to be £35k per year.

So the question is, is it worth changing statues to LTD and paying an accountant each month to do my books or will the savings be small?

Thanks in advance for your help!

paddyrg

If you're only doing it to save NI, it's marginal at best. There are other reasons to form a ltd company, financial segregation for instance, or if you're planning to sell it on in a few years, or to claim film production tax credits, or sell shares for investment, etc.

paul1985

Thanks for the reply. It's pretty much to save on the tax i'm paying. It would also be beneficial to be a LTD company as I think i'd potentially get larger jobs but that's not really the reason to go LTD.

A friend of mine has just gone LTD with the same earnings as me and he said he would save a fortune on tax or at least that's what the accountants told him. Something about selling his and his wife's separate self employed businesses to the LTD company to get the first £22k from the LTD company tax free and also about selling his camera gear to the LTD company.