[Pole 2 Pole]

After a substantially large tax bill, I've decided to become a limited company as of April 1st this year. A friend of mine done this a couple of years back and after chatting to him this morning, have decided to go down this road. Accountant will want £300 to set me up and i know I will need to be a bit more "organised" when it comes to accounts etc,but i feel it's gonna have to be the way forward after hearing what he's paying out in tax "because" of what he can claim for. Declaring £22k at the mo. Going up by the year. Am i doing the right thing lads?

[lee09]

Hi
Was 22k what you drew or was it gross and if I may ask what was your tax bill
Lee

[Pole 2 Pole]

£22 was gross. I had a doddle of a tax bill last year. Because of that and how self assesment works...........I'm getting clobbered for my "delight" last year. They want £3,500 jan........£1800 july. Last year was only 2 grand all in. This is my karma lol. My mate paid £1800 all in last year. And from what i can understand, that is his normal "whack" and i don't think he's earning less than me.probably more.

[Andy@w.c.s]

one thing you will have to pay is tax for the company

also you will still have to pay tax on your drawings ,

think long and hard before going ltd,

[lee09]

Thanks
Those figures are fairly similar to me so will watch your replies, sorry I can't be of more help
Lee

[Pole 2 Pole]

That's ok Lee.........I'm learning too. So i'll have to pay tax on my "wage"? daft question,lol. How much would the company tax be then??? Roughly. I've learnt that i won't have to pay class 4 NI. That's £1200ish saved straight away. Then i "could" emply my son.........£90 a week i think,if i'm right in saying that. That's £5k a year that i won't be paying tax on. And so on and so on. I really would appreciate ANY advice on this gang as(like all of us) am getting sooo tired of workin my arse off just to "survive". I'd sooner the extra bucks be in my pocket than "theirs".

[outdoor restore]

Speak to your accountant before making any decisions.
Yes you're right you won't pay self employed NI, but you will pay NI as a director/ employee of the Ltd company and the company will pay employers NI as well. The Ltd company will also pay corporation tax on profits, your level of salary will determine your personal tax liability, Salary/Dividend etc.
If you want to employ your son, the same things apply whether or not your Ltd, his wages are still fully tax deductable as a sole trader.
Again, please speak to your accountant before you do anything, when you do ask about selling the goodwill into the Ltd company.
Neil

[andyatkinson]

get the pro's advice, i made this post the other day.-

Had my skin saved by a fantastic new accountant.
If anyone needs the help of someone who is pretty cheap and very thorough the details are there.
It's all done on phone and through post as she lives in scotland, so much cheaper than any quotes ive ever had.
Her name is Veronique her number is 01573 460651
And no she is no relation or friend of mine etc just thought some of you guys may benefit too, especially newbies.

She would have the answers to all these questions

[GBWWFC]

i think it will be next year before i take that step. Once you pay the set up charge you can earn a lot more before paying tax can't you ?
I've never had a business account before so a bit warey , i like the bit about employing the secretary tho   .  

[macmac]

You're probably "suffering" because of your payment on account? Things should settle down though if you consider your expenses a little.

This is one reason I like to try & keep profits at a stable growth year on year by careful consideration of purchases, spreading of capitol allowances etc. I personally wouldn't use the AIA of a large purchase in one year @ 100%.

[STEVE-UK]

ltd will be simple enough as long as your accoutant is reliable and has your accounts in on time as there are fines for putting your accounts in late

[Ian Lancaster]

Don't forget that as a Ltd Co. you become an employee.  You are required by law to take out employers liability insurance for yourself and any other directors involved in the company.

For window cleaners this can be very expensive.

[Dean Taberner]

Take it on the chin this year and because you will have paid 2 decent payments on account this time it will be nowhere near as bad next year,

Trust me, I went through this last year,

If your tax bill is 3800 say next year, you will have already payed 2x 1800= 3600.

You will then have to pay the 200 balancing payment and then a poc of 1900 so 2100 next jan in total and then 1900 in the july,

Thats based on this year being better than last, which it may not be.

Going ltd would cause alot more work so think about it carefully and ride the storm.

Dean

[ronnie paton]

im ltd and that was from the recommenation from my solicitor, i find i pay a lot less beacuse i take  divendens.

there is a lot more paper work and higher accountancy fees but i feel i gain more than i lose.

[wizard]

I cannot see why ytou need to go ltd the only thing I see will be an account will have to auddit you books . Let the account do you tax return and advise on the setting up of your accounts.I think you are cutting a stick for your own ass. At this point I think your income is to small to warrent a LTD.The accountent might be looking after himself before your needs.All you need is advice on you r tax right offs*( eg What you can clain and how much.)Remamber accountants are paid by you but work for the state.

[daz1977]

i sort of agree with wizard

go speak to a ifa,  as it might not be worth you going ltd,  the main advantage of ltd is if you go bust you dont loose your house,   but one disadvantage is that it isnt your money its the companys,   you also have to put your company nu,mber on all paper work, so any letter heads you got will become useless,  when you file a return at company house any one can look at how much you make, turn over etc

if it is just you and one person then stay self employed,

you also need a company secretary, to sign forms for company house


regarding dividends,  i know the tax man was trying to clamp down on these as loads of people where paying them selves to avoid lots of tax

[ronnie paton]

Ltd is the same now, any finance needed may well have o have a directors guarentee.

Your secretary can be any one a friend or family member, you has director can sign returns.

there as a link to show how much better of you could be by going ltd to being a soletrader. ill try and find it.

[Pole 2 Pole]

Wow.......................thanks for all your different views lads. I kinda suspected views would be split and i wasn't disappointed,lol. I dooo like the simplicity of the way things are at the minute, i'll admit. I live and love a simple life. I think that's why i do what i do. Christ, i was so sure earlier that LTD was the way forward,now i just don't know, but if anyone one knows,then it's you guys. Bonnet de douch  : 

[prestige cleaners]

been going 2 years now, went limited straight away as advised by a friend, 1st year made £26,500 gross, over a 3 day week, cant remember the expenses, but i think it was only about £12,000 that was taxed, i paid about £1000 tax, and didnt have to pay n.i - i think the way they do it is they (accountants) give you a wage £2500 which isnt taxable, then dividends on the profits, i use george to keep track of expenses, and keep all my reciepts, and bank statements, i think you only pay n.i when you earn over £2500?

expenses that are tax deductable are -

office room, equipment
internet
phones
fuel
van
parts
tyres
servicing, mots,
clothing
pc's
business loan
advertising
charitys
road tax
van insurance
accountants fees
public liability insurance
breakdown cover

so i would say yes it is the best way to save on tax, my wife joined me in the second year and we made £31,500 working a 3 day week together, im yet to find out the bill for that, will let you know, you do need to file a record with companies house every year, costs £15. i think it only cost a couple of hundred quid to set up with a solicitor, but you can do it yourself if you want.

shop around for an accountant, preferably a one man band, not a big company as i found my new accountant was cheaper, worked from home, less overheads, no staff etc!

[Pole 2 Pole]

Is it true that i can claim expenses on my car too?? Being a company car and all  Once again ty for all advice? Petty it's all so damn complicated