Sole trader or LTD?

[jparker3007]

Hi all
Ive been working as a sole trader for one particular firm for about a year or so, recently hes given me an abundance of work on price with quite alot of continuity. my question is is it worth me going LTD? the values per month will b quite substantial and im just trying to work out whats best.
anybody in or has been in a similar situation? any feedback would be greatly appreciated thanks guys.:vanish:

 

[Octopus]

If you've been working as a sole trader for 1 year for the same company I suspect the Tax man will view you as an employee. Being a sole trader or Ltd is secondary IMHO

 

[jparker3007]

on and off this year with others in between, but this next batch of work is consistent

 

[Octopus]

In which case I'd speak to accountant, being LTD has additional overheads too.

 

[SPARTYKUS]

Murdoch has it.


Taxes and death, death and taxes, there is no advantage to one or other except as Murdoch points out, being LTD will cost an extra £1K or thereabouts to (by law) pay an other to do books. Sole Trader cost can be zippo....except your time of course.

I am Limited (3 years) and will be returning to Sole Traderdum shortly.....to save a K a year

 

[Big n Daft]

I'm ltd and dont cost me a grand a year.
It also gives a better image and promotes integrity. If your turning the cash its a must, given the choice would you contract a sole trader or a ltd co.

 

[Big n Daft]

Other thing,
if your ltd the tax man will never consider you to be employed, where as CIS/13weeks and all that.

 

[IQ Electrical]

I'm ltd and dont cost me a grand a year.
It also gives a better image and promotes integrity. If your turning the cash its a must, given the choice would you contract a sole trader or a ltd co.

Precisely and if you pay yourself minimum wage and dividend that £1000 pounds of accountancy pales into insignificance!

 

[jparker3007]

thanks for all the responses, just weighing it up at minute. i dont want to get stung

 

[Amp David]

Any half decent accountant will find out if its right for you or not. Think there's far too many variables for anyone to give you an accurate answer

 

[jparker3007]

yeah i think its best if i just contact my accountant, thanks guys

 

[chrishaworth]

If you are OK at accounts and use an accounts program on your computer, then it only costs £15 a year to be limited. HMRC have a program which produces your corporation tax and also the Director's report for Companies house. Having said that, every year, I sit for a couple of days banging my head off the wall, trying to remember how to get the books to balance. A limited company (and NIC membership) is good if you do commercial/industrial work but most domestic customers don't care.
Cheers, Chris

 

[nikmet]

No ones mentioned the BIG advantage of going Ltd............that is LTD Liability.............if things go seriously wrong being a sole trader, it would make the £1000 / yr seem like chicken feed

 

[jparker3007]

thats exactly what im thinking seeing as ive just had a phone call which has doubled my work load so need more lads.

 

[SPARTYKUS]

No ones mentioned the BIG advantage of going Ltd............that is LTD Liability.............if things go seriously wrong being a sole trader, it would make the £1000 / yr seem like chicken feed

nikmet thats why I am Limited ... although I only turnover a small amount because I'm a house dad more often than working (another variable).

However someone pointed out, isn't that what Liability insurance is for? Limited or not? It covers you.

Chrishaworth - I was led to believe you cannot do your own accounts for a company as it's against the law. Thats why you must use an "agent". How do you get round this? Or are you pretending to be the accounts office when you do your books !

 

[robie]

Hi, Ive been ltd for about 4 years now, it does cost more money for an accountant to do your books, and it is about a grand, well mine is about 12 hundred. Anyway, if you work for the same company and no one else for 2 years or more, I'm sure the tax man will come after you instead of your employer because his tax liability stops and it becomes yours, I know of a couple of people who have worked as a ltd comp because the employer specified this and they got investigated and had to pay out to the tax man.
Hope this helps

 

[Ponty Massive]

Benefits of LTD are limited liability, however as you say, insurances will cover you for misfortunes and these day, small LTD companies still need a personal guarantee from the director with regards to financing etc so it's still your house on the line if payments go tango uniform !

 

[SW1970]

I'm ltd because of the ltd liability aspect. Public liability and professional indemnity insurance doesn't cover all eventualities, so if a client was to sue the company, my personal liability is limited to any money I have put into it and no more (aside from assets the company holds). Can't risk anything other than that. Some business clients are turned off by sole trader status. Luckily haven't had to put up a personal guarantee.

 

[chrishaworth]

Spartykus - there is no HMRC regs that say you have to use an agent, in fact there is a box on the Corporation tax return to tick if you do use one. If you are a small company (I think the current limit is profits under £300,000), then you do not require your accounts to be audited and can submit your own return. I've been doing both my own and the local community association's returns for years with no problems - the software won't let you send the return until the books balance properly.
Cheers, Chris

 

[jparker3007]

chrishaworth, where did you get the sofware from and how much is it please?