General Cleaning Issues - Floorcare, car valeting, buying and selling businesses, pricing, staffing, market research, etc.
need help with ltd of self-employed
Posted by A_to_Z_Clean (A_to_Z_Clean), 29 September 2003 Hi all,
I need help.On the moment i'm self emplyed but i reed on internet that the LTD companies pay much less tax!!! It is this thrue??If so and good firm opening LTD.
A to Z Clean
P.s Sorry for my english i'm foreign person.
Posted by Derek (Derek Bolton), 30 September 2003Hi
You need to speak to your accountant about this.
Yes, on the face of it their are tax savings to be had but you will pay more in accountancy fees, registration fees etc.
I am a bit of a cynic but it is my belief that once everyone is signed up to being a Limited Company the Chancellor will close that particular tax loophole.
Its too good an opportunity for him not to miss.
Posted by martin_606 (martin_606), 30 September 2003Hi Adam
I am not Ltd at the moment but I am going to be. I have had a ltd company and i feel the benifits far outweigh the cons.
When you are ltd you allowed to earn £10,000 before you pay tax. Also when employed you pay the government 1st and then you after. when ltd you pay you 1st and them after. As far as an accountant goes, a good one is worth their weight in gold. They should save and earn you more in tax breaks than they earn.
There is a reason the rich get richer and the poor get poorer... the rich own companies, the poor work for a living. For each new legislation that comes out for the ordanairy person the more tax break are given to people with companies, just good business sense in my opinion.
A good accountant can tell you where to put money and how to maximise your tax breaks.
I lost my previous company and was left with a tax bill, my new accountant (the last one was pants) got me a reduction of £1000 by claiming back dated child tax credit over the last two years!
Look for an accountant who has his own Ltd Accountantcy as they are more in the know and do not be scared to ask them about little legal tricks to save you money by paying less or no tax.
Hope I have helped
Posted by A_to_Z_Clean (A_to_Z_Clean), 30 September 2003THANKS
Keep them coming.
A to Z Clean
Posted by STEVE71163 (Steve Lowe), 30 September 2003Hi
I think it depends on the size of your business but i would get advice from a chartered accountant. As a Ltd company the company and you are seperate things, You being an employee. Also if you are just starting a business you would probably need employer liability right from the start.
Posted by DP (DP), 3 October 2003Hi all first time on here although I partner another unrelated forum elsewhere.
I have a limited company dealing with special commercial cleaning issues.
The tax savings are correct in respect that as self employed you will be responsible for tax on nearly all your earnings and purchases at a higher rate (allowances will apply of course).
LTD would be a lower rate and many issues can/would be exempt, however for those who fear that you would then be liable for the higher rate tax on your own income, there is options.
As a Director of your company you would be entitled to certain privileges, i.e. dividends, instead of wages which can be drawn as regular as a wage. simply check with your accountant for all the benefits.
However remember that you will need a new bank account (they will not convert your existing one) and that you will loose certain ease of access in respect of nipping down to the hole in the wall for money, credit cards etc.
So therefore you need to be organized.
There will be certain documents to return i.e. annual registration fee to Companies House (£15) and of course your accounts each year would become public.
All in all and after 4 years of "trading as" I have not regretted becoming Ltd, but the main benefit is the limited liabilities if something goes wrong. I was accounting for a very high turnover and exposed to very large credit amounts, therefore personal liability was too great to continue.
Please remember that Directorship carries certain legal obligations that you must be aware of by law, so get the booklet from your accountant before continuing.
Not sure if this helps but there is my 2 pennies worth.
Posted by A_to_Z_Clean (A_to_Z_Clean), 3 October 2003Thanks All
All the info is helping me a lot, i'm readin all the web sites (IR atc.) so soon my brain will explod.
but LTD sound good soo more info and i will decide.
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