Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: prestige cleaners on July 07, 2010, 09:01:21 pm
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just had my bill for limited co, tax bill for 2 directors, £1600! and a £500 accountants bill, chuffed as id saved up £3500.
just a few tips my accountant told me might help newbies, he said the 1st year of business for van/loan can be totally tax deductable instead of spread out, as has happened to me as the last accountant didnt do it, that way you dont lose money for depreciation of the van.
he also said to spend a bit more on tools to save money on tax.
he also said to save more money revert back to sole trader, as its not worth it for us.
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Some conflicting advise there mate ???
As for writing off 100% of costs in first year, this would be totally dependent on individual circumstances & you could be worse off for doing this, especially in your first year of trading!
Spending money doesn't save any tax, you just don't pay any tax on the money you spent. If you spend money on something you don't need, then you've actually lost money!
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obviously buy something you will use like new poles (poss 60ft carbons) pressure washer, ladders, reels, advertising, clothing, etc. speak to your accountant 1st though.
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Macmac is spot on. Yes you will reduce your tax bill but you still have to find more money to spend in the first place. You could of course buy a brand new van every year and pay no tax but you'd be skint all the time.
My accountants bill is £95 - think I have a bargain there.
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£500 accountent bill for a year is very very cheap your turn over must be very low for a ltd company
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i dont know what would you class as low?
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Well to pay 1600 tax would only mean remining profits after costs of and salerys of £8000
But of course turnover and profit is alot diffrent
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its actually about £10,500 tax free wages for both of us, thats what he told me today anyway.
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thats just your 5000 od grand tax free which you get as employee, we all know that
Cost of sales
Expenses Ie ( directors wages upto 5000 odd) all other business expenses
Profit
Corp tax
Divendends
Like that
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i m a ltd company and my accountent charges £1200 a year for everyting he does all the paper and everting else necessary so £500 bill is very very low
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he also said to save more money revert back to sole trader, as its not worth it for us.
well I would disagree as my company is LTD and to go back to sole trader I would have to buy the business back to myself, as being a director I aim employed by the company!
Someone is miss informing you mate...
Andy
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he also said to save more money revert back to sole trader, as its not worth it for us.
well I would disagree as my company is LTD and to go back to sole trader I would have to buy the business back to myself, as being a director I aim employed by the company!
Someone is miss informing you mate...
Andy
You'll pay higher rate class 4 NI then as an employee?
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I think he means the whole thing, ... money wise , earnings etc , his accountant prob thinks he could earn the same as a sole trader without the hassle.
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he also said to save more money revert back to sole trader, as its not worth it for us.
well I would disagree as my company is LTD and to go back to sole trader I would have to buy the business back to myself, as being a director I aim employed by the company!
Someone is miss informing you mate...
Andy
well if that is that is the case, how would you lose out if your paying yourself
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With AIA (annual investment allowance) which is the way business investment works nowadays you can claim the whole lot in the first year and succeeding years anyway as long as it's not more than £50 000. So even if you buy a super dooper RO and a gold plated pole as long as it's under £50 000 you don't have to spread the payments.
Simon.
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I would have thought that along with corporation tax on profits you would still have to pay tax on any wages? That is unless you only earn £6000 or whatever the limit is. Then pay the rest in dividends and pay corporation tax on that. would you not still have to pay a personal tax on any dividends at the normal rate though?
See that I went round in circles!
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As for buying equipment to reduce liability this is only possible out of the profits AFTER you have paid yourself and any expenses. I would imagine most use all of their profits as their wage.
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corporation tax is normally around 20-22% up to few hundred thousand pounds.
Its 21% now, and our mate Cameron, has recently lowered it to 20% - although thats not in effect until after April 2011.
Completely different game to being a sole trader, you would have to be at the top of your game as a sole trader to go ltd,
At the top of your game. Really? Why is that?
My accountants bill is £95 - think I have a bargain there.
Thats not a limited companies accountants bill. He is either ripping you off or your a sole trader.
Considering the money the majority claim to be earning on this site, the majority should be running limited companies. If your profiting less than 15k its probably not worth it. If your earning 30k as a one man band, going limited would save you about a grand a year factoring in accountants costs. If you earn more than that, and are not limited, well, the tax man is your biggest fan.
As Andy rightly points out you would have to buy the business from yourself, if you want to revert to being a sole trader. You don't want to go there, so you need to be sure of your choice. But simply put, if your taxable profits are 20k plus your almost certainly better off limited.
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I don't see its much of a decision Ewan. Even if your profits are 30k, surely your mad to be a sole trader. Your giving money away to the tax man if you stay as a sole trader.
If your an old boy about to wind down, I understand. Otherwise, its black and white if you ask me.
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I don't see its much of a decision Ewan. Even if your profits are 30k, surely your mad to be a sole trader. Your giving money away to the tax man if you stay as a sole trader.
If your an old boy about to wind down, I understand. Otherwise, its black and white if you ask me.
When you say 'profit' do you mean after your personal wage or before you take anything?
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Macmac is spot on. Yes you will reduce your tax bill but you still have to find more money to spend in the first place. You could of course buy a brand new van every year and pay no tax but you'd be skint all the time.
My accountants bill is £95 - think I have a bargain there.
You don’t have to find any “more money to spend in the first place”
You use the money that you ‘already have’; you know which money that is don’t you?………………………….. The money that’s already accountable for tax
See what you get for £95.00! ::)
What a numpty head! ;D ;D ;D
Ewan, if you don't know what your talking about, please don't pretend ;D
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corporation tax is normally around 20-22% up to few hundred thousand pounds.
Its 21% now, and our mate Cameron, has recently lowered it to 20% - although thats not in effect until after April 2011.
Completely different game to being a sole trader, you would have to be at the top of your game as a sole trader to go ltd,
At the top of your game. Really? Why is that?
My accountants bill is £95 - think I have a bargain there.
Thats not a limited companies accountants bill. He is either ripping you off or your a sole trader.
Considering the money the majority claim to be earning on this site, the majority should be running limited companies. If your profiting less than 15k its probably not worth it. If your earning 30k as a one man band, going limited would save you about a grand a year factoring in accountants costs. If you earn more than that, and are not limited, well, the tax man is your biggest fan.
As Andy rightly points out you would have to buy the business from yourself, if you want to revert to being a sole trader. You don't want to go there, so you need to be sure of your choice. But simply put, if your taxable profits are 20k plus your almost certainly better off limited.
Interesting Joe, someone who can post something sensible. Yes the £95 bill is for sole trader and not ltd obviously. My accountant has quite an easy time of it to be honest, mainly because of George.
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I don't see its much of a decision Ewan. Even if your profits are 30k, surely your mad to be a sole trader. Your giving money away to the tax man if you stay as a sole trader.
If your an old boy about to wind down, I understand. Otherwise, its black and white if you ask me.
How?
30k equals a saving of £1673 if you are limited over a sole trader. Subtract the extra cost of being limited, which is £675 for my accountant, so I will use that figure. If we use the figure of £95 for a sole trader, which is extremely cheap. 675-95 = 580 difference. 1673-580 = £1093 saving of being limited compared with sole trader at a profit of 30k.
I used to do my own as a sole trader, but you need to really be on top of what you can claim. Bottom line, if your profit is 30k and your limited as opposed to being a sole trader you will save approximately a grand per year. Simple as that really.
There are other minor differences between the 2 company types. Minor pros and cons that you can google if your curious. Lets face it, money talks. Thats the "how" of why I think its black and white.
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I don't see its much of a decision Ewan. Even if your profits are 30k, surely your mad to be a sole trader. Your giving money away to the tax man if you stay as a sole trader.
If your an old boy about to wind down, I understand. Otherwise, its black and white if you ask me.
When you say 'profit' do you mean after your personal wage or before you take anything?
Okay here is an example:
Turnover 50k
Expenses 10k
Personal allowance 6,475
Taxable profit (which is the figure I was refering to) = £33,525
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He is an incorporation tax calculator...
http://www.newmanandpartners.co.uk/resources/tax_centre/tax_calculators/incorporation.php
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It does say so at the bottom of the page:
This calculator can only give a guide to potential savings but cannot cater for all situations. You must consult an accountant for specific advice in your own circumstances before taking any action
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You wouldn't would you ;D ;D ;D
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Fair enough, feel free to babble on pretending you know what your talking about. I was just trying to help to try to explain the ins and outs.
The basic principles of taxation are very straight forward actually. But I'm not going any further into it as the game here seems to be the big "I am" rather than having constructive conversation.
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You said it Ewan! What a plank! ::)
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You said it Ewan! What a plank! ::)
;D ;D ;D
Good for a laugh mind. ;D
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Have you two read your own post, many others have, CIU has a big membership with the majority using there brain.
I’m not saying you two don’t use yours. Just saying you’re not very bright.
You've missed a ? mark & there is "their" in this case. You always get that one wrong ;)
There's nothing funnier than watching someone desperately trying to appear clever! ;D ;D