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does a LTD company benefit

Posted by Auto_Groom (Auto_Groom), 30 January 2004
thinking about going LTD does this benefit in anyway if so what way and why.
Posted by Scots_cleaner (Scots_cleaner), 30 January 2004
It only pays if you have the money, and do not need to pay yourself during the year.


You get payed means of dividend on company profit and you dont pay tax on the first 10k
Posted by Auto_Groom (Auto_Groom), 30 January 2004
what does this mean that you dont pay yourself a weekly wage ?
Posted by Scots_cleaner (Scots_cleaner), 30 January 2004
You are aloud to earn i think  £83 per week paid mhtly
Then you pay yourself a % of the profit as a dividend each month well that the way my mate does it he has a big turnover.
Posted by martin_606 (martin_606), 30 January 2004
Hi

It will depend on the next budget.

At the moment you are allowed to pay yourself £10,000 without paying tax. You are basically an employee of your own company. You pay yourself dividens throughout the year.

Mr Brown might close this loophole as the number of Ltd companies has gone nuts, for obvious reasons.

i am personally waiting until after the budget so i can make a more informed decision.

First port of call though will be an accountant, choose one who is already ltd, as they will know more about a ltd company.

Hope this helps

Regards

Martin Cool
Posted by Scots_cleaner (Scots_cleaner), 30 January 2004
you will find it hard to find to find an accountant  that is ltd something to do ethics
Posted by deb (deb), 30 January 2004
My understanding of a Ltd Company is this

Once an earning threshold of £32,000 is reached may

have gone up (20% Tax), a Ltd Company is an effective

means of reducing the rate of Tax, which would be 40%

on anything above.

A Ltd Company provides a means of reducing this high

Tax (At Present - before the Budget).

Dividends can be taken, as can a salary.

Anything to do with the running of the Company

ie, Computer, printer, stationery, cleaning equipment etc

can be claimed back as a procurement of the Company.

A Director and Secretary are required.

A Business Account is a must.

Have had a Ltd Company not cleaning but in essence

the same as any other.

I found it was worth the while!!

Hope This Helps!!

Deb Wink


Posted by Auto_Groom (Auto_Groom), 31 January 2004
what are they planing to do in the budget can somone give me some info on this please.
Andy
Posted by lee_gundry (lee_gundry), 31 January 2004
worth going ltd if profits are over 14k
pay your self a wage each month of £320.00

plus pay your self £800.00 per month tax free.

total per month £1120.00 tax free

plus you can pay your self any sum you want over the year but this will be a taxable income.

i have heard that the 10k dividend payment may be charged with national insurance con. Also talks of vat going to a threshold of 100k

the figur of 14k profit takes into account new invoices,business cards etc.

you do need to have the money in your ltd account to be able to pay these figures.

Lee Gundry (ulverclean ltd)
Posted by martin_606 (martin_606), 3 February 2004
Hi scots

My accountant is Ltd, i am not yet but will be, nothing to do with ethics though.

if you are a sole trader and so is an accountant would that be ethics also? if so almost everyone is stuffed.

How do the rich get rich?

everytime the government come out with new legislation the rich hide behind a company...

Regards

Martin Cool
Posted by Silly_Philly (Silly Philly), 3 February 2004
Chartered Accountants are never Ltd companies in England & Wales, they are partnerships usually.

This is because there has to be accountability. †If suddenly your business is £500,000 amiss and you sue your accountant for professional negligence, it won't do you much good if its a Ltd company. †"The Company" will be liable, it'll just go into liquidation and you'll get nothing, and no-one will be to blame.

If it were a partnership, the partners themselves are liable, not "the company".
Their personal assets will be seizeable, and they themselves will face trial. †A good incentive to keep honest, eh?

[Just to make it more complex, last year the government introduced a new entity called the LLP - Limited Liability Partnership. †All of the Big 4 Accounting firms are now LLPs. †This is somewhere inbetween LTD Company and Partnership]

Silly

Posted by DP (DP), 4 February 2004
Well not pretending to know much about this, but still intrigued and a quick fumble through the yellow pages seems to reveal an element of Ltd accountants advertising, however I will agree not many and I can understand the reasoning as well, but they do seem to be there.
Posted by Auto_Groom (Auto_Groom), 4 February 2004
so if you are a new company like my self with no money because used it all to set up will it still be worth turning it in to a limited company.
hope i can  Wink
Andy
Posted by DP (DP), 4 February 2004
There are a number of reasons to consider when thinking about being incorporated and financial gain is only one of them.

Apart from the tax issues, employment status, various concessions and lets not forget the most important one "Limited Liability" roughly translated meaning not being in dept for the rest of your life if it goes wrong!

If none of the above are important then there are at least another dozen more to think about.

You really need to get advice from an appropriate party or at least go to the websites and read up, because as well as additional administration costs, you will also have additional (and very real) legal responsibilities.

Unless you know all the facts and understand how they effect you, how can you make any decision based on snippets.

After all its your future nobody elses  Wink

Posted by DomesticAgency (DomesticAgency), 11 February 2004


We have been advised to go Ltd for

tax saving reasons too.

Very interested in the snippet regarding

the possibility of the vat threshold  going

up to 100k!!  That is some jump I hope

it's true

Regards

Domestic
Posted by Will_Bibbey (Will_Bibbey), 11 February 2004
I'm looking into all of this at the moment. To keep it simple as you have just started I would stay as sole trader, thats my gut feeling. A lot of implications if you go Ltd, time might be best spent getting & building new business etc.. But definately worth at least looking at, especially as you grow.

Last budget GB introduced 19% corporation Tax on Ltd companies. 1000's of partnerships & traders turned Ltd due to the benefits that could obviously be had. At the time the Dti & other bodies raised with the government that this was highly attractive & had Govt got it right? Govt response was 'don't look a gift horse in the mouth' Me being sinical about politicians I think they did this to increase No of Ltd  companies. Next budget March 17th. My sinical feeling - GB will increase Corporation tax back to norm. Govt will skin SME's and benefits for ltd companies of small & medium size will suffer.
Govt debt will be reduced in time for next election!

It is very dependant on your particular set up and finances but there are considerable tax benefits if your drawings are over a certain threshold.

We can all give advice on this but ultimately I would get fully grounded in the figures & understand the pros & cons of being either a sole trader, partnership, or Ltd. If your ltd you have to submit accounts etc to companies house. Not a decision to make lightly and definately not based on my humble opinion.

To get grounded check out busninesslink.co.uk. has all the basics on each set up aswell as advice on all other areas of business. I find it very useful.

Then I would evaluate standing at current and possible higher rates. Wait for budget then check with accountant & make decision if you decide beneficial.

Forget LLP (Limited Liability Partnership) was my accountants view on this new scheme.

Definately reference business link.
Hope this helps
Will

Best of luck!
Will  


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