[poleman]

thanks david

so essentially you dont pay tax on the same money twice. assuming polemans company (ltd) earns more than 35K profit a year (and he portrays that image!) then what happens to the excess profit if it cant be paid as a yearly dividend? is this then liable for higher rate corporation tax? and how can the "shareholder/s" receive it  if not as wages? bit heavy for saturday night i know!!!!

thanks, greg

YES you pay tax if your above 35k but the Ltd company pays about 20% corporation tax, so the tax man is not going to tax twice, I pay myself a wage below the personal allowance, which then I don’t get taxed and then I pay myself a dividend in respect of the fully paid shares of the company, which is from its profits, which my business is making a profit, and as long as I submit Minutes of a Directors Meeting each month (by law) then I won’t get taxed on what I get paid, I am looking into a stake hold pension at the moment and maybe a company car (not sure what the tax situation is )

[Joe Lauzon]

Ewan,

Perhaps I am misunderstanding where you are coming from.

What did you mean by this statement?

Fact is you are more vulnerable if you are self employed.

This statement below is very misleading.

The tax benefits are real compared to having a job or being self employed. This shouldn’t be the reason alone for going ltd.

Also this makes no sense.  A sole trading company can be larger than a limited firm.

A good way to look at it, as a sole trader if you compete for business against a company you will be up against a team. Teams are stronger than the individual.

No, I take it back.  I don't think you know what your talking about on reflection 

OK, Learn to read first 

Come on, you can do better than that.  What did you mean by those comments I quoted?  If you really can edudacte me, I'd really appreciate that 

[sjm]

Flogging and dead horse spring to mind  : 

[windowwashers]

The tax benefits are real compared to having a job or being self employed. This shouldn’t be the reason alone for going ltd.

A good way to look at it, as a sole trader if you compete for business against a company you will be up against a team. Teams are stronger than the individual.

Another obvious point is as a sole trader you own your job, with that come all the problems for example if you are of work due till ill health.

Companies or businesses are completely different they are systems. The owners of established companies don’t even have to be there. They employ an MD to run it for them.

There is no way even the most successful self employed window cleaner can compete with in any way to an average window cleaning firm.

that is totally wrong, I used to be a one man band I used to go up against companies all the time, I won a fair share of the work. Are you a window cleaner Ewan ?  



Also while I am here, anyone can buy a limited company name : do a search, I know loads of people that run very big business' yet are not limited if what ytou say is true can you explain this to me I am not limited
Ian

Ian, it’s not totally wrong at all it’s not even a little bit wrong. Just because you have and I hope continue to win work over firms. Doesn’t mean they can’t crush you if it was in there interest.

An extreme example would be if you went up against OCS for a contract of say one million pounds they could offer to do it for free pay the client for doing it! And OCS would still make a profit at year end.

As for saying you no people who run very big businesses and are not ltd. This is a fallacy, but does depend on your definition of big and not what is actually big.

PS. People aren’t ltd businesses are for good reason.

Ewan

Please don't insult my intelligence by saying about what my definition of big is I am not a silly little boy. You are word twisting.

As for crushing me buy doing work free to get the contract I do know what you are saying. My point was and still is you do not have to be a limited company to win contracts nor IMO does it make any diffrence as said before you can buy a limited company online.

Again I say what you put is wrong and yes even a little bit wrong not totally but still wrong.

Are you a window cleaner ?

Ian

p.s OCS I would say are not an average firm

Never intended to insult you Ian, so I apologise if you were.
But I do know what I am talking about, what I wrote is true but comprehension is always going to be the crux of disagreement.

You are missing the point I am making between being a sole trader and a company/business.

Yes I am a window cleaner.

Been doing it a year now, so have at least one year’s knowledge on the subject. Have ten years knowledge of business.

How about you?


PS: OCS was a hypothetical. Point being one million is about half day turnover for OCS, how many years of turnover would that be for you!
Do the hypothetical with a local firm that’s in your area the principal still applies

Thing is I not a sole trader

[sjm]

When you are quoting a big box of quotes , you know its time to go to bed !  :

[peter holley]

stick it under the matress or in  a shoe box .... its much easier

[Joe Lauzon]

Ewan,

From your last reply to me I'm convinced there is a large gap in your knowledge.  I strongly suggest you do a bit more research on the matter before misguiding people.

Please, if you feel otherwise, give me a structured argument as to why the quotes you made, that I have highlighted make any sense at all. 

To be honest, I am of the opinion at this point you are trying the bullpoop baffles brains approach, and its not working.  Your understanding of the subject seems flawed.  Please prove me wrong by detailing the quotes you have made. 

[TennetClean]

A good way to look at it, as a sole trader if you compete for business against a company you will be up against a team. Teams are stronger than the individual.

I dont understand this?

Even a sole trader can have employees, and therefore have a team.  Whether you are limited or not is purely a legal position, it does not affect the actual work of window cleaning.

What I mean is, if you went limited tomorrow you would not suddenly be stronger because you are a "team".

Having a limited company means that your personal assets (ie house and car and savings etc) are protected in case the business fails owing large amounts of money.  (limited = limited liability)

Window cleaning businesses don't have large amounts of stock etc, and rarely are able to build up large debts with suppliers (because window cleaning is a service, there is no physical product) therefore limiting your liability is probably not a big issue for most.

Sometimes, commercial customers will treat you more seriously if you are limited though.

[Joe Lauzon]

Spot on Tennet.

[davids3511]

There used to be more benifit about 2 years ago to being Limited. As far as I can remember, you could get your first 10K of divident out of the company completley tax free, good old Gordo got rid of that when lots of sole traders changed to Ltd to take advantage of that.

Insurance, someone pointed out it will be higher, doesn't have to be. A company I deal with for marine insurance quoted me the same price so long as I was the only person working for the Ltd company. Once I took on staff the price jumped by 100's.

There are advantages to being limited, the main one being dividents and the tax savings. However, you need to look carefully as your Accountancy fees will rise and may offset any gain you made in taxation. The reporting is more stringent too, you need to file accounts with Companies house every year and the penalties are high if you miss the deadlines. There is more red tape with being Ltd and with that more admin costs.

[windowwashers]

The tax benefits are real compared to having a job or being self employed. This shouldn’t be the reason alone for going ltd.

A good way to look at it, as a sole trader if you compete for business against a company you will be up against a team. Teams are stronger than the individual.

Another obvious point is as a sole trader you own your job, with that come all the problems for example if you are of work due till ill health.

Companies or businesses are completely different they are systems. The owners of established companies don’t even have to be there. They employ an MD to run it for them.

There is no way even the most successful self employed window cleaner can compete with in any way to an average window cleaning firm.

that is totally wrong, I used to be a one man band I used to go up against companies all the time, I won a fair share of the work. Are you a window cleaner Ewan ?  



Also while I am here, anyone can buy a limited company name : do a search, I know loads of people that run very big business' yet are not limited if what ytou say is true can you explain this to me I am not limited
Ian

Ian, it’s not totally wrong at all it’s not even a little bit wrong. Just because you have and I hope continue to win work over firms. Doesn’t mean they can’t crush you if it was in there interest.

An extreme example would be if you went up against OCS for a contract of say one million pounds they could offer to do it for free pay the client for doing it! And OCS would still make a profit at year end.

As for saying you no people who run very big businesses and are not ltd. This is a fallacy, but does depend on your definition of big and not what is actually big.

PS. People aren’t ltd businesses are for good reason.

Ewan

Please don't insult my intelligence by saying about what my definition of big is I am not a silly little boy. You are word twisting.

As for crushing me buy doing work free to get the contract I do know what you are saying. My point was and still is you do not have to be a limited company to win contracts nor IMO does it make any diffrence as said before you can buy a limited company online.

Again I say what you put is wrong and yes even a little bit wrong not totally but still wrong.

Are you a window cleaner ?

Ian

p.s OCS I would say are not an average firm

Never intended to insult you Ian, so I apologise if you were.
But I do know what I am talking about, what I wrote is true but comprehension is always going to be the crux of disagreement.

You are missing the point I am making between being a sole trader and a company/business.

Yes I am a window cleaner.

Been doing it a year now, so have at least one year’s knowledge on the subject. Have ten years knowledge of business.

How about you?


PS: OCS was a hypothetical. Point being one million is about half day turnover for OCS, how many years of turnover would that be for you!
Do the hypothetical with a local firm that’s in your area the principal still applies

Thing is I not a sole trader

Doesn’t matter what you are Ian, if you are not a sole trader what legal base are you?

You have still not answered my previous question.

if you question was how long have I been running window cleaning near on 10 years now, if that was not your question please ask again and I will answer for you

[windowwashers]

Cheers Ian that was my question. As I said I have only been window cleaning a year and I understand I still have a lot to learn.

I like to take the advice from those on the forum who have been doing window cleaning longer than me.

My strength in part is business, but I know I need to understand more about window cleaning before I commit substantial amount of money to this (my Mrs wont let me) (yet)

Ewan, please do not take what I put as he having a pop at you I was not, but I see so many people come on here and say simalar no experience to back up what they say, I am always open to learn anything new and that will help my company grow.

If you ever what a chat give me a call (I coud pick your brains at the same time as you clearly know about the other side of business) I will always help you out on the window cleaning side of things I am know expert on the accountancy side thats what I pay them to do 
My FA is Fantasic my ears are always open and if I can help you in anyway or others I always will, I never had any help when I started off so leant what I know be trial and error and today I still lean new things I am not silly enough to think I know it all.

Best wishes

Ian

[poleman]

All I can say on this matter, as you all seem to go around in circles! Speak with you account, or do a Google, there is a lot of accounting forums out there as well! Do your home work! I went Ltd and more than happy as my accountant does all the work and I get on with cleaning windows, which is what I am good at  

[windowwashers]

Cheers Ian that was my question. As I said I have only been window cleaning a year and I understand I still have a lot to learn.

I like to take the advice from those on the forum who have been doing window cleaning longer than me.

My strength in part is business, but I know I need to understand more about window cleaning before I commit substantial amount of money to this (my Mrs wont let me) (yet)

Ewan, please do not take what I put as he having a pop at you I was not, but I see so many people come on here and say simalar no experience to back up what they say, I am always open to learn anything new and that will help my company grow.

If you ever what a chat give me a call (I coud pick your brains at the same time as you clearly know about the other side of business) I will always help you out on the window cleaning side of things I am know expert on the accountancy side thats what I pay them to do 
My FA is Fantasic my ears are always open and if I can help you in anyway or others I always will, I never had any help when I started off so leant what I know be trial and error and today I still lean new things I am not silly enough to think I know it all.

Best wishes

Ian

Cheers Ian, Might hold you to that 

Your always welcome Ewan.


Ian

[alanwilson]

as poleman says let your accountant decide for you if you should go ltd or not - remember its easy to go ltd - not so easy to go back to sole trader.

we are registered as a privately owned company, tax is simple (but still bloomin taxing - unlike the ad)

we don't need to worry about dividends etc although we do have the dreaded vat.  anyone coming close to the vat threshold I'd advise them to go no further.  Its a nightmare, it will cost you money for at least a year and is a right royale pain, plus you better make sure your books are in order because the VAT man is the dragon of government, he can literally frog march you out of your house and throw you in a cell.

[Joe Lauzon]

You are entitled to your opinion its no bull and I believe you are baffled. What would be better for you if you did your own homework?

 :  I never came on here pretending I knew everything.  You seemed to be making various (wrong) statements, which can serve to mislead people.  I'm quite clear on why (I don't want to be) limited.


At this point a window cleaner on his own has no valid reason to be limited, in my opinion.  The tax gains have been eaten away by the government, and this year will get worse.

The main benefit of being limited are as traditionally as follows:

1. the saving of tax and National Insurance contributions


The government seem to have taken it upon themselves to knock this one on the head.



2. enhanced standing in the business community

For a one man band window cleaner, I'd argue it doesn't matter.



3. ability to easily divide interests in the company in the form of shares between members of the company.


What members?



4. limited liability


When was the last time a one man band window cleaner incured big debts?



I have saved a lot of money being limited in the past, but if I could go back now, I would. 

[ok cleaning]

hi poleman i am a ltd as well i have been a ltd 4 4 years now and i cant believe how can u manege 2 pay yourself 35 k for a year and tax free aswell no way i am a managing director and my wife is the secratary and our wages is £440 a mont each and our accounted say that is the best he can do how much is your turnover for a year man a few million ? lets be honest with ourselves please

[ok cleaning]

hi poleman i am a ltd as well i have been a ltd 4 4 years now and i cant believe how can u manege 2 pay yourself 35 k for a year and tax free aswell no way i am a managing director and my wife is the secratary and our wages is £440 a mont each and our accounted say that is the best he can do how much is your turnover for a year man a few million ? lets be honest with ourselves please

[Clive McDonald]

This is getting silly, the decent posters with genuine info get shouted off.

You are to blame Ewan (again) you start a thread off asking a fundamental question, and give an opinion. Then when someone who's been through it posts you disagree and question their crediblity.

I suppose my ideas on limited were as vague as yours, but I do respect what joe and alan have said.

Expansion is something i'm keen on too, but with the credit crunch, collapse of the biulding industry, and steep rises in fuel and energy are making me consider my next steps with care.

[Joe Lauzon]

Ewan, I run a limited company.  As I made clear.

I run a limited firm.  A word of warning.  It is easy to become limited.  Once you are limited its a big problem going back to self employed - I tried.  It would have cost me a lot of money.

I wish I was sole trader, but it would cost me too much to change my company from limited, back to sole trader status.  I can't be bothered to explain why, this is getting boring. 

Is that really that tough for you to understand Ewan?  I've made it quite clear.

You should simply of posted on the forum, "could someone advise me whether I should become a limited company?"  You would have saved yourself a lot of embarrassment. 

You need to stop making statements about something you clearly don't understand.

The natural progression for a growing business will be to incorporate.

Just ask questions, and I'm sure someone will help you.