Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: JSMC on July 03, 2014, 06:11:19 pm
-
what are the benefits and also the drawbacks associated with this ?
-
Ask an accountant.
The main benefit is when LTD you are technically an employee of the company. So if the business goes bankrupt etc it doesn't affect you personally.
One of the big downsides is your accountancy fees multiply by 2 or 3.
-
And insurances.
You will save money going ltd over £50k odd but you'll resent paying the extra for everything.
My accountant did me a guesstimate spreadsheet to try to get me to go ltd.
After all the extras are taken into account the tax saving ltd compared to ST was about £5k on £80k.
I've nothing to prove this-just an accountants estimate.
-
Disadvs
You must register with companies house and name a director and secretary, there are restrictions on who can hold these posts and responsibilities that go with them.
The accounting is more involved and tax returns are presented differently
It will cost you 150-200 to get someone to register a limited company but you can do it yourself
Advs
Some large companies will only deal with ltd companies so you may get better/bigger contracts
The company pays corporation tax which may mean you pay less than a sole trader paying income tax
The company is a seperate legal entity and can be sued seperate to you your liability is limited
-
what sort of earnings would you suggest going ltd? does it really matter/ personally i am sole trader just now but would like to take a guy on for a few hours each week. can this be done down the sole trader route?
-
adv...give yourself a low wage and claim Tax benefits ????????
-
Theres no difference employing people between sole and ltd. As to what income it varies depending on your circumstances for example tax credits and the sort of car/van you drive can affect the tax you would pay. As a rough guide once you are earning 30-35k i would get an accountant to work out whether you would be better off .
-
so a sole trader can employ easily enough?
-
Yes but remember you will be responsible for collecting tax and ni from your employee and paying it to the hmrc
-
so a sole trader can employ easily enough?
employ a self employed guy!
-
so a sole trader can employ easily enough?
employ a self employed guy!
if you give that guy set work each week then i am sure hmrc frown upon this surely
-
He is not allowed to have one person providing his income to remain self employed. Basically if everything comes form one supply he must be employed. That is the law
-
Speak to an accountant.
That is all.
-
When ltd you are not personally liable as you are employed,you are also payed a minimal basic wage and then receive dividend payments.
Overall reduces your tax liability,also keeps you out of the 40 % tax bracket !if you are earning well.