[H2GoKent]

I have been a limited co since started 8 years ago as there was a tax advantage then.

My question is if as a self employed person you say turnover 30k and after expenses and pay you left 5k in the business what would be tax position?
As a limited co you pay Corp tax when money goes in but the money isn't of concern again until you pay it to yourself and then it attracts income tax

So if you have a separate business account as s employed can you build up money in the account or does that attract tax?

[birdymiller]

Just done my return online, turnover minus expenses equals profit or loss, not any section for leaving cash in business

[Pope vader]

all money that u make as a self employed is classed as income till you have expen,  so if you make 30 k  have 10 k expeses and 10 k wages and 10 k left in bank, the tax man looks at it as 10 k exp and 20 k wages  as the money is yours

[mci services]

all money that u make as a self employed is classed as income till you have expen,  so if you make 30 k  have 10 k expeses and 10 k wages and 10 k left in bank, the tax man looks at it as 10 k exp and 20 k wages  as the money is yours

yep what he said

[H2GoKent]

I see so everything you earn after exes is profit and yours personally and you'll be taxed accordingly.

So you can't build up some cash to re-invest in the business at some later point.
Seems a pity, but I guess that's what a Limited Co is for.
Suspected as much.
Looks like I should stay Limited then.
Cheers

[SunShineCleaning]

I thought a LTD company was charged 10% on corporation tax??? Plus I was under the impression you had to have a chartered accountant draw up your accounts, if so they would tell you better than most.

[H2GoKent]

I've got one and am due to see him in a bit but sometimes you want think things thru first you know
The tax difference isn't that great actually. As self employed it seems you can claim for a lot more things that as an employee of a ltd co the revenue won't let you claim for.

[H2GoKent]

And corp tax is not 10% it is 26%. Dividend tax is 10%

[Pope vader]

the only advantage to being ltd, is if it goes bust, you are not liable for the debt

[Perfect Windows]

the only advantage to being ltd, is if it goes bust, you are not liable for the debt

It's one of the advantages, not the only one. 

There are other NI advantages, much more than enough to pay for an accountant to prepare your accounts.

Another is that if your other half is a director, they can use their tax-free allowance.  Add in the NI advantage for them as well as you and it's MUCH better.

Vin

[H2GoKent]

And if you a fantastic year you can leave money in the business for a rainy day

[NJWindowCleaning]

all money that u make as a self employed is classed as income till you have expen,  so if you make 30 k  have 10 k expeses and 10 k wages and 10 k left in bank, the tax man looks at it as 10 k exp and 20 k wages  as the money is yours

I would imagine the 10k which is left is your profit after everything else been deducted and there is another 40% of that in taxes etc. 

[Paul Coleman]

I thought a LTD company was charged 10% on corporation tax??? Plus I was under the impression you had to have a chartered accountant draw up your accounts, if so they would tell you better than most.

I don't have a ltd. company and have no idea about the tax stuff.  However, I thought that the requirement for the accountant to be chartered ended a few years ago.

[bumper]

What is tax and National Insurance   

[♠Winp®oClean♠]

the only advantage to being ltd, is if it goes bust, you are not liable for the debt

It's one of the advantages, not the only one. 

There are other NI advantages, much more than enough to pay for an accountant to prepare your accounts.

Another is that if your other half is a director, they can use their tax-free allowance.  Add in the NI advantage for them as well as you and it's MUCH better.

Vin

Even as a sole trader not Ltd you can still employ your partner & they also qualify for the tax free allowance.

[SunShineCleaning]

And corp tax is not 10% it is 26%. Dividend tax is 10%

Stand corrected.

[dave.e]

What is tax and National Insurance   

 

[Tom White]

What is tax and National Insurance   

[dave0123]

I see so everything you earn after exes is profit and yours personally and you'll be taxed accordingly.

So you can't build up some cash to re-invest in the business at some later point.
Seems a pity, but I guess that's what a Limited Co is for.
Suspected as much.
Looks like I should stay Limited then.
Cheers

A LTD company or not the above doest matter if you earn 30k and 10k to expenses left with 20k in a limited company either 10k for re invest or what ever will still be taxed at 20k unless you take a salary or dividend. but with paying a dividend you still cant legally pay more than you have to save for your tax bill

[Steve Sed]

As a limited company I'm assuming you pay yourself in dividends mostly which USED to attract less tax.