Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Steve_c on February 28, 2012, 04:40:35 pm
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What benefits and pit fulls did you guys find when converting to LTD? Thanks Steve.
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Im not ltd but I think you pay more tax I would only go ltd if I had loads to lose but dont turn over 500,000 !!!!!!!
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less contributions total.
21% total if my memory serves me
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thought you was already limited ???
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you have to pay corporation tax at 20% but can draw dividends as a director which works out less tax overall. Also need to consider things like employers liability insurance. If your turning over 50k I think its recommended.
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You're right he is Limited, but only in the looks dept. Have you seen him recently, his Dad put the swing too close to the wall.
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You're right he is Limited, but only in the looks dept. Have you seen him recently, his Dad put the swing too close to the wall.
;D ;D ;D ;)
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Rhine I turn over £100,000 & my accoutant has never said to me that I would be better off being a ltd company I always understood that if your a ltd company they cant take your assests I dont understand to much about ltd to be honest .....
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You're right he is Limited, but only in the looks dept. Have you seen him recently, his Dad put the swing too close to the wall.
That's it mate, if i see you on my patch your a gonna. I cant help it if your are the ugliest window cleaner on the manor. ;D Get off my patch ;D
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That reminds me of a lunatic that knocked on my door yesterday, not only was he ugly but he smelt as well ;D
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lol ;D
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Less tax. You don't pay NI. Need to be earning over 40 000 roughly to make it worth while because accountancy fees increase dramatically and paperwork. If earning enough profit it will save you a fortune.
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If your profits over 40,000 Go Ltd.
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if you are limited you become separate from the business, meaning the business could fail and go bankrupt and you can walk off without any fines, bad credit or personal bankruptcy
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if you are limited you become separate from the business, meaning the business could fail and go bankrupt and you can walk off without any fines, bad credit or personal bankruptcy
Not all the time... The directors/shareholders can still be made to pay.
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one post says earning over 40000,another says profit of 40k which one is it. ;D
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one post says earning over 40000,another says profit of 40k which one is it. ;D
Profit because that's when your tax as a sole trader raises to 40% turnover means nothing...
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one post says earning over 40000,another says profit of 40k which one is it. ;D
you can go ltd at any amount of turnover/profit. its when it becomes worth your while to save tax that its best for you. A balance between accountants fees and savings have to be weighed up. as every business is different, advice from accountants is recommended. perhaps some of the ltd guys might tell us why they went from sole trader to ltd?
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Im Ltd and good for tax! if you wont to go back to self employed you have buy your own business back!!!! as you are classed as an employee!!!
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Rhine I turn over £100,000 & my accoutant has never said to me that I would be better off being a ltd company I always understood that if your a ltd company they cant take your assests I dont understand to much about ltd to be honest .....
i understand you can make yourself and other ie wife , child directors of a ltd company & pay yourself under the NI bracket to avoid paying PAYE and NI and then draw the rest (about 30 k a person tax free in dividends
THe only tax paid is by the company at 20% might be 21 ? in corporation tax
So you are better off by 9-10 % (might be a bit out) compared to sole trader. but - accountancy fees go up and you have to be careful about the dividends you gotta have meetings and pay them with reciepts etc etc , there isnt a great deal of difference in it financially anymore ,but the main thing is that if your business goes tits up owing money to creditors you can dissolve the company and it owes them not you making your personal assets safe , as a sole trader if this happens the liability is personal.... so its prob not an issue in our business
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Dividends aren't tax free you still have to pay tax on your income if thats a salary or dividends. Their used to be a tax perk on the first £10000 of dividends but that was stopped a few years ago. I used to be ltd on my old business but i wound the company up on my accountants advice as the benefits weren't enough in my case to outweigh the extra paperwork and hassle involved.
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You can only take dividends out of profit, if the profit is 50000 you can only take 50000, it's not the directors that can have dividends, it's the shareholders ( sometimes a difference)
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dividends are not tax free true. But they are subject to different tax rates than other income. So under 35k income for the year you only pay ten percent on dividend income however there is a ten percent tax relief on dividend income so under 35k it is effectively tax free. So if you draw 5k a year as an employee of your own company you pay No ni or tax. Then 30k in dividends is tax free. Only tax paid would be 20 percent corporation tax by the company. Thats how i under stand it. Dont think im wrong :-)
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You have to pay yourself enough paye to pay ni, can't not pay ni, you just pay less than if you took all money as paye.
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You have to pay yourself enough paye to pay ni, can't not pay ni, you just pay less than if you took all money as paye.
Well even in you paid yourself your personal allowance 8k next year , and wife did same , thats very little ni and 16k tax free plus dividends.... ie about 35k per person and only a bit of ni , probably a couple of hundred £ per person
There is a benefit to being limited
Its just not what it was for the hassle
Its all here
http://www.hmrc.gov.uk/newbusinesses/iwtset-up-as-a-limited-company.shtml
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Might be wrong but i thought the 10% tax relief on dividends got stopped a long time back.
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I've heard that accountancy fees go up: about £500 a year. Also you might have to have employees liability insurance which can increase costs.
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Less tax. You don't pay NI. Need to be earning over 40 000 roughly to make it worth while because accountancy fees increase dramatically and paperwork. If earning enough profit it will save you a fortune.
Damn - I knew my partner doing her AAT4 would work out for me in the end- kkeerrchiiing!!!£££££ ;D ;D ;D
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Might be wrong but i thought the 10% tax relief on dividends got stopped a long time back.
Doesnt say that on hrmc?
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We are LTD,
There a various tax saving legal holes apparently,
I wouldnt know that though as im solely focused on keeping the glass clean.