[LBWCS]

Have a few questions about going ltd.
At what point in your turnover would you recommend going ltd?
How many extra expenses are there compared to sole trader? eg employers liability
How do you find the extra paper work?
Most important, how significant has the tax saving been?

I know there are pros and cons but trying to work out if I should take the plunge before the end of the tax year, or perhaps change my van.

Any thoughts?

[bobplum]

i could be wrong but turnover is not that important..............probably is
Accountancy fees are higher
if your going as an employee you need someone to answer to?

[Smudger]

We employ 3 people but are still self employed - me and the mrs are a partnership

It's all swings and roundabouts but as a ltd company you may find it harder to get credit and deal with certain commercial customers.

Likewise some commercial customers may only deal with ltd companies.

A search of the old threads may help, but your best bet is to talk it over with your ( or a good accountant ) to look which will benefit you and your circumstances best

Darran

[LBWCS]

Ive chatted with him and he suggests it, but I need to make a well informed decision taking his view in also.
Im not fussed about credit or dealing with clients, more the overall impact it will have Is it worth the hassel unless you get to a certain turnover?

[Marc Stock]

Yes. If your geting to vat threshold, you want to start looking at ltd. It protects your business and seperates your personal liability (to an extent). Also emplying becomes alot easier to deal with, and you able to draw diveidends on the business and pay less tax than you would being self employed.  If you draw all compmay profits on divedends you wont get coperation tax either, but check with your accountant as even drawing divendends in a way that has a regular patterm hmrc can view that as salary and argue a totally different tax structure all together.

[dannymack]

I'm Ltd which is soooo much better for us. I now work for my Company as a Director where I sold all my gear to my company so that will be tax deducted. I now have to take a small wage each week so I won't pay lots of tax. Regards my morgage, shopping and any other expenses that comes out as dividends which I only get taxed on 10% once a year. I can take as many dividends as I like but my tax bill will be lots cheaper !!! As for Commercial makes no difference to them whether I'm Ltd or not !!!

I'm vat reg anyway have been for many many years I find beneficial as I claim back on my vans, also claim back vat on all fuel and loads of other stuff.

As for Accountant I've had mine for about 20 years and hes cool only charges me £250 a year but we do the books for our Vat

Hope this helps

Mind you when we Incorporated our Business was a bit of a pain as we had to close bank a counts and reopen as our name changed slightly due to not having my original company name, I was ok thou as we kept our vat number so getting lease on our new van was ok

Cheers
Dannymack 👍🇬🇧🇬🇧🇬🇧👍

[TomCrowther]

I am going Ltd from April. Thought about it last year but time went by and delayed it until this year.
Main reason is due to employing others. I need to protect myself, get the company it's own identity.
There are tax and ni advantages too.

[Crystal-clear]

If you are making over 50k profit and employing its worth it speak to hmrc if you work alone and don't plan to expand maybe its not . All dividends over £30k+ your Sallary of £10k will be taxed at 52% rather then 42% on the higher bracket but you do save on the lower bracket around 13% and if you have a partner as a share holder they could also claim a dividend up to her lower tax bracket and again another 13% saving
I would say ltd is very much for someone who is expanding fast or has serious plans to the extra expense and paper work to run LTD isn't worth it unless you are making good profits of around 50k

[LBWCS]

I'm Ltd which is soooo much better for us. I now work for my Company as a Director where I sold all my gear to my company so that will be tax deducted. I now have to take a small wage each week so I won't pay lots of tax. Regards my morgage, shopping and any other expenses that comes out as dividends which I only get taxed on 10% once a year. I can take as many dividends as I like but my tax bill will be lots cheaper !!! As for Commercial makes no difference to them whether I'm Ltd or not !!!

I'm vat reg anyway have been for many many years I find beneficial as I claim back on my vans, also claim back vat on all fuel and loads of other stuff.

As for Accountant I've had mine for about 20 years and hes cool only charges me £250 a year but we do the books for our Vat

Hope this helps

Mind you when we Incorporated our Business was a bit of a pain as we had to close bank a counts and reopen as our name changed slightly due to not having my original company name, I was ok thou as we kept our vat number so getting lease on our new van was ok

Cheers
Dannymack 👍🇬🇧🇬🇧🇬🇧👍

Thanks for that reply thats very helpful. I am planing on having an employee, but it will be my Dad! Forgetting the liability aspect, purely financially, at point in our turnover is it worth the jump?

[Crystal-clear]

I'm Ltd which is soooo much better for us. I now work for my Company as a Director where I sold all my gear to my company so that will be tax deducted. I now have to take a small wage each week so I won't pay lots of tax. Regards my morgage, shopping and any other expenses that comes out as dividends which I only get taxed on 10% once a year. I can take as many dividends as I like but my tax bill will be lots cheaper !!! As for Commercial makes no difference to them whether I'm Ltd or not !!!

I'm vat reg anyway have been for many many years I find beneficial as I claim back on my vans, also claim back vat on all fuel and loads of other stuff.

As for Accountant I've had mine for about 20 years and hes cool only charges me £250 a year but we do the books for our Vat

Hope this helps

Mind you when we Incorporated our Business was a bit of a pain as we had to close bank a counts and reopen as our name changed slightly due to not having my original company name, I was ok thou as we kept our vat number so getting lease on our new van was ok

Cheers
Dannymack 👍🇬🇧🇬🇧🇬🇧👍

Thanks for that reply thats very helpful. I am planing on having an employee, but it will be my Dad! Forgetting the liability aspect, purely financially, at point in our turnover is it worth the jump?

its not worth it unless you are making profits over £40k minimum IMO

[LBWCS]

I'm Ltd which is soooo much better for us. I now work for my Company as a Director where I sold all my gear to my company so that will be tax deducted. I now have to take a small wage each week so I won't pay lots of tax. Regards my morgage, shopping and any other expenses that comes out as dividends which I only get taxed on 10% once a year. I can take as many dividends as I like but my tax bill will be lots cheaper !!! As for Commercial makes no difference to them whether I'm Ltd or not !!!

I'm vat reg anyway have been for many many years I find beneficial as I claim back on my vans, also claim back vat on all fuel and loads of other stuff.

As for Accountant I've had mine for about 20 years and hes cool only charges me £250 a year but we do the books for our Vat

Hope this helps

Mind you when we Incorporated our Business was a bit of a pain as we had to close bank a counts and reopen as our name changed slightly due to not having my original company name, I was ok thou as we kept our vat number so getting lease on our new van was ok

Cheers
Dannymack 👍🇬🇧🇬🇧🇬🇧👍

Thanks for that reply thats very helpful. I am planing on having an employee, but it will be my Dad! Forgetting the liability aspect, purely financially, at point in our turnover is it worth the jump?

its not worth it unless you are making profits over £40k minimum IMO

Why do you say that? Does it not work out financially better?

[dannymack]

It's defo better as you won't pay as much Tax !!!  👍🇬🇧🇬🇧🇬🇧
The only thing is you can't just go buy anything on your business card like you would a sole Trader, as when you go Ltd you now work for your company and have to take a wage. If you take money out of the business on your card you have to show receipts of what it is, so it's only for business use.

If you need anything else apart from business use you can transfer money as Dividens if that makes sense
Good luck with it. 👳🇬🇧🇬🇧

[Crystal-clear]

Its just not worth it on less i think at 40k profit your savings are around £2,500 a year minus account costs(I wouldn't be bothered to do all that so would pay one) so leave you with £2,000 so that's a fair amount of money if you are on less any savings get easten up by a accountants so you would be being LTD for the sake of perhaps a few hundred pounds not much value in it for owning a LTD company and being responsible for one to be considered if you are on decent money but even then self employment is simple

so for me it would be if I was employing and sending say 3x vans out a day making £30k profit per van transfering big dividend profits having taxdeductable wages going out sitting in your office being taxed 52% on dividends over £40k isn't taxing if you are just doing admin and using turnover to employ and make more thats the direction being ltd is that's what being LTD is about in my book its about making massive profits and its about motivating you to make more i think your company would only taxed 20% corporation tax on profits under £300k so you can see its basied all about growth And the company not about an individual
LTD is for guys like lee prior and others I'm sure those sort of people are
Big turn overs with permanat staff LTD is the way ofc you would have to make that transition if you were going in that direction and making healthy profits would be a good reason to consider it
I'm no expert just read a bit here and there and put 2 n 2 together speak to hmrc accountants and others who had gone this route and get more accurate explainations

[PoleKing]

A lot of people forget that it 20% tax but another 9% in NI payments.
There's no NI to pay on a dividend.

[dannymack]

I was a sole trader for many many years now there's 3 of us and we have over a 6 figure sum turnover, my accountant recommend we go Ltd due to the ammount of tax we were paying. There's 2 directors and a self employed sub contractor. The 2 Directors pay ourselves a small wage each every week a couple hundred pound so our tax bill on that isn't as much as what we were paying. We pay our NI which is a few quid each week. As for Dividends you can take as much as you like which is 10% corporation  tax on it a year, not sure where your getting 45 & 55% tax ? So our tax on what we take at the end of the year for our dividends and our tax on our wages will still be alot cheaper than the tax I was paying as a sole trader !!!! Also if anything went tits up they can't touch my house as the company will just close. 🇬🇧🇬🇧🇬🇧👍
At the end of the day the less wage you pay yourself each week the less tax you will pay !!!

[Crystal-clear]

I was a sole trader for many many years now there's 3 of us and we have over a 6 figure sum turnover, my accountant recommend we go Ltd due to the ammount of tax we were paying. There's 2 directors and a self employed sub contractor. The 2 Directors pay ourselves a small wage each every week a couple hundred pound so our tax bill on that isn't as much as what we were paying. We pay our NI which is a few quid each week. As for Dividends you can take as much as you like which is 10% corporation  tax on it a year, not sure where your getting 45 & 55% tax ? So our tax on what we take at the end of the year for our dividends and our tax on our wages will still be alot cheaper than the tax I was paying as a sole trader !!!! Also if anything went tits up they can't touch my house as the company will just close. 🇬🇧🇬🇧🇬🇧👍
At the end of the day the less wage you pay yourself each week the less tax you will pay !!!



There you go 6 figure turnover so it makes sence
20% tax or there abouts on dividends under your higher tax bracket so 2 directors can take £80k a year as wages and dividends saving a substantial amount of tax but if you paid yourself dividends over your higher tax bracket yes it's 52% only on that section but you never had needed to I guess as £80k is pretty sweet

[dannymack]

You should become an accountant pmsl !!!!
I only know a little bit as my wife deals with all that malarkey lol !!! 👍🇬🇧🇬🇧🇬🇧

I'm only the window cleaner 🇬🇧🇬🇧🇬🇧👍

[PoleKing]

Danny, corporation tax this year is 20%.
10% corporation tax went out when 10p tax did (I think)

[dannymack]

Lol you prob right Poleking I'm not to sure on the % of things as wife & Accountant deal with that side of stuff, all I know is I won't pay half of the tax I've paid in the last years  !!! 👍🇬🇧🇬🇧🇬🇧

[Crystal-clear]

Haha, well done Danny sounds like you got a good business going and you got a good deal there with the mrs  you just focus on the work and new contracts and she sorts the rest out best way !