Tommy L
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Registered: 21st Aug 06
Location: Northampton Drives: Audi wagon
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quote:
Originally posted by BarnshaW
its a public limited company
yeah...
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BarnshaW
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Registered: 25th Oct 06
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what matt said. thats what i meant
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Cosmo
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Registered: 29th Mar 01
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quote:
Originally posted by koolkorsa
quote:
Originally posted by Robbo
quote:
Originally posted by Cosmo
quote:
Originally posted by AndyKent
Could do that yes, except I have a charity willing to pay me over a grand for work I've done but for some reason say they can only pay to a registered (limited) company else they'll have to pay it through a member of my family who works for them but will take off 40% tax 
Im sorry, but what the fuck kind of charity is that? 
Any company (inc a charity) can pay any other sort of company. Personally Id be questioning them why this is the case, as I cant see any reason why they would do such a thing.
The ONLY thing I can see to benefit them is a VAT registered company, but both sole traders and Ltd companies can be VAT registered.
yep was gonna say, sounds like dodgy charity shite to me (dealt with plenty of them - religious ones mainly - in my time as an accountant)
Maybe may they have internal purchasing rules where they only buy from limited companies to try and protect them from small time fraud, paying joe bloggs x amount when in fact he's one of the staff members mates. They may perceive a limited company as lower risk for this type of fraud.
However paying it through a family member who works for them and taking off 40% tax sounds a bit too close to money laundering to me.
Yeah, because Joe Bloggs cant go and buy an out of the box Ltd company for £50 off the net.
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Cosmo
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Registered: 29th Mar 01
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quote:
Originally posted by BarnshaW
what matt said. thats what i meant
We know, but you were totally wrong with what you said
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corsasriboy
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Registered: 23rd Mar 07
Location: leicestershire
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quote:
Originally posted by corsa_tomtom
Just be a soletrader. A lot less paper work and if it doesn't take off you won't have wasted a load of money setting up a Ltd company.
wish i had done this. such an unnecessary ballache unless you are in the right sort of business or making big dollar.
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AndyKent
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Registered: 3rd Sep 05
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Back on track a bit.........to explain my thinking:
In both cases assuming there was no (or very little) profit or loss.......
As a sole trader I would pay no NI, no tax and would only have to return a simple self assessment.
If I had a limited company, there would again be no NI, no tax but slightly more complicated accounts (which I'm confident I'd be able to do myself for free).
If that were the case, the only difference in cost might be setting each up (free versus £70 or so) which is why I was considering both options to start with - unless I'm mistaken?
Definately looking like a sole trader is the better option since a limited company doesn't really offer any other benefits (liability aside) but pain in the arse accounts wise
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Matt L
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Registered: 17th Apr 06
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right im not sure how accurate this post will be as my head is properly fucked at the moment.
but limited company = you have to have accounts done by an accountant and submitted to companies house so i dont think you could do them yourself.
in your case from what you have posted in here before it went off on a bit of a tangent, just become a sole trader and do it that way, less tax involved and much easier and you can do it all yourself if your confident enough to.
[Edited on 08-10-2009 by Matt L]
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Cosmo
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Ltd you have to have audited accounts submitted to companies house, but they dont necessarily have to be done by an accountant.
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Matt L
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Registered: 17th Apr 06
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only have to be audited if the company is over a certain size, only 3 or 4 of our limited company clients we go out and audit. the rest we just complete unaudited accounts for.
[Edited on 08-10-2009 by Matt L]
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koolkorsa
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Registered: 15th Jun 03
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quote:
Originally posted by Cosmo
Ltd you have to have audited accounts submitted to companies house, but they dont necessarily have to be done by an accountant.
Ltd company have to submit AUDITED accounts?
Not until they are pretty damn large.
There's some very fishy advice flying about in here.
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Cosmo
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quote:
Originally posted by koolkorsa
quote:
Originally posted by Cosmo
Ltd you have to have audited accounts submitted to companies house, but they dont necessarily have to be done by an accountant.
Ltd company have to submit AUDITED accounts?
Not until they are pretty damn large.
There's some very fishy advice flying about in here.
Well obviously their is small company exemption, but in general audited accounts for Ltd companies have to be submitted.
TBH I was more correcting Matt than posting my own point.
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Cosmo
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Just to confirm, I've submitted the last 2yrs accounts for my own Ltd company, and also 2yrs as a partnership for another company - so do have an idea how it works
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Tommy L
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Registered: 21st Aug 06
Location: Northampton Drives: Audi wagon
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Sole trader is a lot more simpler for you.
First off register yourself as self employed by submitting a CWF1.
All you have to do is keep a record of any income and expenses you make/do as a business and submit an annual self assessment tax return. You'll pay income tax on any profits your business makes.
Also you'll need to set up a direct debit for your Class 2 National Insurance Contributions.
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jrsteeve
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Registered: 3rd Apr 02
Location: Manchester
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Christ this is a long winded bitchy thread. Basically in your instance you'd be better as a sole trader. Unless you'll be making a significant profit and are likely to need loans/credit in the future for the business there are no benefits whatsoever of being limited. Make sure you're insured and you'll have nothing to worry about in terms of being sued for taking crap pics. If anything at your stage being limited would be a hindrance due to extra paperwork needed.
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Tomnova16
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Registered: 21st Jan 06
Location: Gerrards Cross Drives: Porsche 911
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quote:
Originally posted by corsa_tomtom
From what you have said in your original post, you will be better off just being a sole trader for the time being. If it does take off and starts to grow, then look in to making it a LTD company.
exactly what i have done, keeps things simple too
http://www.lemass.co.uk/ for all your automotive/bodyshop needs
Located in Chalfont st Peter
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willay
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Registered: 10th Nov 02
Location: Roydon, Essex
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So many big heads in this thread, makes great reading.
Was looking into setting up a LTD not long ago for contracting reasons and perhaps starting my own thing but still need to work out a solid game plan on avoiding IR35 which is a complete cunt.
But I need more info on it tbh, and work out at one point when will I need to bring in an accountant.
[Edited on 09-10-2009 by willay]
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Sam
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As I understand it, you only do a few things on the side here and there.
In your case, I would not bother with setting up a limited company, rather I would suggest you do one of the following:
1. Register as self employed, fill in tax returns (self assessment) each year. You tell them how much you've earnt in your full time job, and how much your business has turned over.
2. You register for self assessment, you tell them how much you've earnt in your full time job, and declare any money earnt 'on the side' as 'additional income' in your tax return.
If your 'on the side' business often has expenses (i.e. petrol, equipment, etc.) then I would suggest going for option 1, as you will be able to reduce any tax liability by declaring any valid expenses.
Also - as an aside - make sure you look into getting professional indemnity and public liability insurance. I have both for my business and it costs me just under £40 a month, but then I have up to £1 million coverage. You can have less coverage to reduce your premium if you think that you might not need that level of cover (say you could get up to £250k coverage for example).
[Edited on 09-10-2009 by Sam]
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DaveyLC
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Registered: 8th Oct 08
Location: Berkshire
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quote:
Originally posted by AndyKent
Thats what I'm asking really. If I was a sole trader (or limited company) what kind of tax advantage might I be able to gain?
Sole trader is the best way to be.. The tax benefits are pretty mental! Just about everything is tax deductable.
[Edited on 09-10-2009 by DaveyLC]
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AndyKent
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Registered: 3rd Sep 05
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quote:
Originally posted by Sam
As I understand it, you only do a few things on the side here and there.
In your case, I would not bother with setting up a limited company, rather I would suggest you do one of the following:
1. Register as self employed, fill in tax returns (self assessment) each year. You tell them how much you've earnt in your full time job, and how much your business has turned over.
2. You register for self assessment, you tell them how much you've earnt in your full time job, and declare any money earnt 'on the side' as 'additional income' in your tax return.
If your 'on the side' business often has expenses (i.e. petrol, equipment, etc.) then I would suggest going for option 1, as you will be able to reduce any tax liability by declaring any valid expenses.
Also - as an aside - make sure you look into getting professional indemnity and public liability insurance. I have both for my business and it costs me just under £40 a month, but then I have up to £1 million coverage. You can have less coverage to reduce your premium if you think that you might not need that level of cover (say you could get up to £250k coverage for example).
[Edited on 09-10-2009 by Sam]
Thats EXACTLY what I was after, thank you.
Presumably with option one though I would have to get my company to pay me my gross salary and then I organise all my own deductions (tax and NI). Could get a bit complicated as I suppose that would technically make me a contractor/consultant to my company rather than an employee yes?
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Tommy L
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Registered: 21st Aug 06
Location: Northampton Drives: Audi wagon
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No, you employer will pay your PAYE and NI contributions as they have been. At the end of the year you'll get your P60 and you enter this income on to your self assessement.
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Sam
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Registered: 24th Dec 99
Location: West Midlands
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quote:
Originally posted by AndyKent
Thats EXACTLY what I was after, thank you.
Presumably with option one though I would have to get my company to pay me my gross salary and then I organise all my own deductions (tax and NI). Could get a bit complicated as I suppose that would technically make me a contractor/consultant to my company rather than an employee yes?
No worries!
Pretty much as corsa_tomtom says, your full time job pays you as normal and deducts tax and NI as normal.
Oh and on the subject of NI, you also have to pay class 2 NI contributions as well as the class 1 NI contributions you pay in your full time job - this is basically £2.40/week, which you can pay monthly or quarterly.
http://www.hmrc.gov.uk/rates/nic.htm for rates information. If your on the side business doesn't turn over a lot of money (£5k or less a year) you can apply for class 2 NI contributions exemption so you don't have to pay it.
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Tommy L
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Registered: 21st Aug 06
Location: Northampton Drives: Audi wagon
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As Sam says Class 2 NI. Download form CA5601 and set up the direct debit.
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Cosmo
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Dont let it fool you that you have next to no liabilities if you're a Ltd company either, with the current climate most lenders will want personal guarantees, this will often include rent where they'll often want a personal guarantee for the length of the agreement, and will also include credit card processing from banks where they will want personal guarantees if you accept deposits (I assume you will to secure bookings) to cover any and all deposits you accept to take in the financial year.
A lot of Ltd company directors are also being chased for the debts of the company these days also if the debtors can prove you acted in a certain way whilst knowing things were going bad.
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AndyKent
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Registered: 3rd Sep 05
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looking at this another way then, if i set up as a sole trader and pursuade the charity to pay me the £1250 via that 'business', what are my legal options to avoid paying much tax on it? Do i simply need the business to spend that amount on relevant equipment or travelling before the end of the tax year?
Or isn't it as simple as that
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jrsteeve
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Registered: 3rd Apr 02
Location: Manchester
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quote:
Originally posted by AndyKent
looking at this another way then, if i set up as a sole trader and pursuade the charity to pay me the £1250 via that 'business', what are my legal options to avoid paying much tax on it? Do i simply need the business to spend that amount on relevant equipment or travelling before the end of the tax year?
Or isn't it as simple as that
You can offset expenses against it but i'd only worry if you were earning more than 600 per month on a regular basis (can't remember the exact tax free additional earnings figure but its around £7-8k per year). So on that basis you could take another job next month paying £6k and still not pay tax, but anything after that you will be taxed on as you'll have breached the threshold.
Just keep a month to month record of exactly what's coming in and what's going out.
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