All a bit much

[Toon]

I knew before I started my business that there was a hard decision as to whether to go limited or just sole trader. I knew that going Ltd would mean extra paperwork and expenses but I thought the additional LTD on the end of my name would install a look of professionalism and in my company.

However, I work for myself and have family members helping out whenever I'm busy and feel the extra paperwork needed to keep a Ltd company is not worth the hassle. I think it would be a lot easier for me to be a sole trader.

Can someone please state the main differences between them, if there would be any complications with VAT when I register later this year and how whether I should keep the company dormant or close it all together and just register as a sole trader. Do you still have a registered business through companies house etc.

I hope you can see where I'm coming from and look forward to your recommendations and advise.

 

[Alpha]

Hi Toon

i've answered this question a couple of times so its best to do a search (I think it was in the general business forum).

It will not affect you registering for vat if you go as a sole trader.

There will however be plenty of things to consider before starting a sole trader business.....eg.

The assets that are in the company at the moment belong to the company not you therefore you would have to sell those assets to the sole trader at a fair price.

The Limited company can only be dormant if there are no substantial transactions during the accounting year...this basically means only paying the annual return fee would be allowed otherwise it is not dormant.

all cash would have to be taken via dividends.

and so on

 

[gordonthegofor]

could the cash not be taken through PAYE

 

[Alpha]

could the cash not be taken through PAYE

Yes if below the tax free pay limit but otherwise why pay tax and NI?

 

[Toon]

Still sounds complicated. Was hoping for an easy way around things

 

[gordonthegofor]

when I have looked at dividends there has been little difference to PAYE
Maybe due to not being anywhere near the 40% tax bracket

This is why employing an accountant is important,
or spending the time researching the tax system

 

[DuaneJackson]

What paperwork is causing you problems? I run a couple of limited companies and don't really notice the paperwork - might be my brilliant accountant shieding me from it though - or my brilliant bookkeeping software making the accounts a doddle.

 

[Toon]

I guess because I'm currently doing all of my accounts myself and not that sure what I'm doing then it's getting complicated. I seem to be growing rapidly now so paying the extra for an accountant shouldn't be a problem. Plus I've heard that the accountant job is to save me so much money so that whatever he saves would pay for his fees!

 

[DuaneJackson]

A good accountant is certainly worth his/her fees. I think you mentioned in another post that you might be using Alan @ Alpha? A good choice, I've moved around accountants a lot over the past 3 years and I'm very happy with Alan.

In all seriousness, do have a look at KashFlow. It makes the accounts paperwork a lot easier.

 

[Jayne]

Poor Alpha is going to be knackered! How many books does he do? :lol:

Jayne

 

[Toon]

No, I've never mentioned Alpha :?: Is it better to get a local accountant or get one from the net?

 

[Jayne]

I don't think it matters much now, you can do everything over the internet.

Alan and Joy on here are both excellent!

Jayne

 

[DuaneJackson]

Sorry, must have been confusing you with someone else.

Personally I don't think it matters if your accountant is close by or not. But I think it's up to whatever makes each individual comfortbale.