[dave0123]

is anyone here a limited company? i am thinking of changing to this status and jus wondering what the benifts wud be in our trade.

obv i no its limited liabitly but i hear u pay less tax rate etc. What are your views on limited company??

Dave

[busydaffodil]

I've recently heard of someone as a Director of a limited company, not taking wages (thereby not paying tax) but paying himself Dividends.   He is alot better off doing it that way.   I'm looking into it myself with a new business I am starting.  Let me know if you find out anything juicy please!!

[DREAM CLEAN]

Hi,

Just gone ltd myself as I now get paid £97 a week tak free then 40p a mile on my own car for company use then a shares dividend, also the company tax is half the % of the t/a tax. Go for it.

Nick

[dave0123]

sounds good dream clean,

do you know how much share dividend you can pay yourself before u have to pay tax? i belive its quite alot but am not sure??.

Dave

[ok cleaning]

i have been a ltd for 4 years now and things going verywell my advice is dont do any paperwork yourself get a good accounted towork with and rest is easier than you think. good luck

[Mike George]

I've been a ltd company for about 7 years, but only been a w/c for a few months.

I pay myself £95 a week which is below the tax and NI threshhold. I don't think you pay any less tax on dividends than you would on wages, but you don't pay any NI on them.

The limited liability thing is a bit of a red herring. It refers to financial liability for debts, so if your company owes somebody a lot of money they can't sue you personally for it (although I think this might have changed recently). But we're not in the kind of business where we run up huge debts with suppliers, and if you get a loan or overdraft you will probably have to provide a personal undertaking to repay it. It's a bit easier to get trade credit accounts as a ltd company.

If you are the only director and you don't employ anybody else, you don't have to get employers' liability insurance.

There is a very small amount of extra paperwork and cost for a ltd company, and you really need an accountant, but it's worth it.

[M4RK]

My company is limited too.

It used to be very worthwhile with no tax on dividends up to 10,000, but now that's changed. The main tax advantage is that by paying yourself the threshold wage each week, you won't need to pay any NI.

Some things to consider though is the fact that you are effectively an employee and therefore should ridiculously have employers liability for yourself which we all know doesn't come cheap, then your accountants bill is going to be a lot more. If you pay £150 - £200 for your tax return, you'll still need to pay that, but then you'll also have company returns and other expenses that you don't have now. Think more like £700 - £1000 for accountant bills.
Access to your money is more complicated. But in a way that can help yuo manage your money better.
Its good for image but unless you're currently paying a lot of tax, I'd just keep it simple.


Mark

[Moderator David@stives]

Think very carefully and take professional advice

[Mike George]

Some things to consider though is the fact that you are effectively an employee and therefore should ridiculously have employers liability for yourself which we all know doesn't come cheap

The law was changed a year or two ago and you don't need employers' liability insurance if you are the only director and you don't employ anybody else.

[Ian Gourlay]

If you are working say 40 hrs a week how come the company which is seperate ito yourself is only payiing £97.

I believe it is an offense to pay below the minimum wage as Sole Director you would be the one who is prosecuted.

[Fox]

Ian - valid point - I will tell you how

I run a Ltd company and pay myself 100 per week, the reason I do this is because I want to keep paying ni and this is a good min amount. 

I work anything between 30 and 60 hrs per week, I can do this as part of my working hours are on a voluntry basis.  There is absolutely nothing wrong in stating this on any form, for instance if you want to claim tax credit you can say you work over the 32 hrs (or whatever it is) but still only earn £100.

Hope I haven't confused the issue!

Fox

[spotless2000]

I found this passage from the link below. 

Company directors

.....  22 The minimum wage does not apply to company directors
unless they have contracts that make them workers.
Company directors are office holders in common law and
can do work and be paid for it in that capacity. This is true
no matter what sort of work is done or how it is rewarded.

23 However, company directors who have employment
contracts will need to be paid the minimum wage. If a
company director is unsure whether he has entered into an
employment contract with his company he may wish to take
legal advice. .....

A Detailed Guide to the National Minimum Wage PL501 (PDF 320K) (This is a link to the Department of Trade and Industry's Web Site)

http://www.hmrc.gov.uk/nmw/nmwfaqs.htm