Looking to Convert to a Limited Company

[bairn1]

Hi there,

I currently have two jobs... One as an employee, 4 days a week, earning around £28K per year. The other is my own business, 1.5 days week, earning around £20K per year.

I run my own business as a sole trader, but am looking to convert to a limited company. The main reasons are to appear more professional, to make it easier to sell my business in the future, a bit more peace of mind with the limited liability, and hopefully a bit more financial security (during Covid, my own business' income was virtually nothing, and as I had another job, there was no government help available).

I know that I need to find an accountant to get proper advice, but before I do, I just wanted to make sure I'm not going to be hugely out of pocket in doing so. I'm hoping that the cost of an accountant will essentially be covered in paying less tax. If anyone had an idea of whether or not they thought this would be the case (based on the figures above), that would be really appreciated.

Also, the accounts for my online business are pretty straightforward as I sell digital goods online, so I was thinking about using an online accountant - maybe something like a-wise.co.uk. If anyone had any thoughts in favour or against this, I'd be really keen to know. Or just anything else I should maybe be aware of before I go looking for an accountant.

Many thanks,

Gary

 

[DontAsk]

Continue doing your own bookkeeping (various free or low cost software available) and use an accountant for the year end.

Do you intend to grow the side hustle? Think about what will happen if/when you hit the VAT registration threshold.

You'll probably need a new bank account. I did when going from sole trader to Ltd (even with the same bank). The old one remained open for some time to catch any customers who didn't update payment details.

Don't sign any personal guarantees, unless you are sure of what you are doing.

 

[MyAccountantOnline]

Hi there,

I currently have two jobs... One as an employee, 4 days a week, earning around £28K per year. The other is my own business, 1.5 days week, earning around £20K per year.

I run my own business as a sole trader, but am looking to convert to a limited company. The main reasons are to appear more professional, to make it easier to sell my business in the future, a bit more peace of mind with the limited liability, and hopefully a bit more financial security (during Covid, my own business' income was virtually nothing, and as I had another job, there was no government help available).

I know that I need to find an accountant to get proper advice, but before I do, I just wanted to make sure I'm not going to be hugely out of pocket in doing so. I'm hoping that the cost of an accountant will essentially be covered in paying less tax. If anyone had an idea of whether or not they thought this would be the case (based on the figures above), that would be really appreciated.

Also, the accounts for my online business are pretty straightforward as I sell digital goods online, so I was thinking about using an online accountant - maybe something like a-wise.co.uk. If anyone had any thoughts in favour or against this, I'd be really keen to know. Or just anything else I should maybe be aware of before I go looking for an accountant.

Many thanks,

Gary

You will find most accountants will give you some initial advice free of charge.

A good accountant will certainly save you tax and ensure your accounting and tax requirements are dealt with properly and when due avoiding penalties etc.

 

[bairn1]

Continue doing your own bookkeeping (various free or low cost software available) and use an accountant for the year end.

Do you intend to grow the side hustle? Think about what will happen if/when you hit the VAT registration threshold.

You'll probably need a new bank account. I did when going from sole trader to Ltd (even with the same bank). The old one remained open for some time to catch any customers who didn't update payment details.

Don't sign any personal guarantees, unless you are sure of what you are doing.

Thank you - this is really helpful.

I'm not planning on growing my business in any significant way - just hoping to keep it sustainable - so no danger of the VAT threshold.

Good to hear I should be able to do my own bookkeeping using cheap/free software. I currently just use Excel for my Self Assessment, so will need to up my game a bit on this!