LTD or sole trader?

[Anonanon123]

Hi

I dabble in a few different streams of income and am wondering what is the best way to set my self up? Should I have a LTD company and all income goes into there or continue as a sole trader and complete self assessments.

Currently my income is from freelance opportunities, like video editing and production. 70% of income max 50k per annum
Buying/selling vehicles. 20 % of income max 30k per annum. maybe 5k profit
Managing property. 10% of income max 15k per annum. 2k profit

Any advice is much appreciated.

 

[WaveJumper]

Personally I would sit down with a local accountant and talk through your options before you get yourself tied up in knots. Looks like you already over the VAT threshold. A couple of hundred quid for some professional advice now will save you a lot of heartache going forward.

There's plenty of accountants on here who I am sure will be along soon and are much more qualified to advise.

 

[Ozzy]

Yep, you are or you have good reason to expect to go over the VAT threshold so you need to sort that out.
Generally, property management is done through Limited companies but not for such a small sum as you quote. Your income is quite a mixed bag so the question isn't really what should you trade through based on what you are doing now, but where are you heading and what would suit your plans. My advice is think about where you want to focus your energy and future business growth, then appoint an accountant to help structure it for you as @WaveJumper says.

 

[SC & Co.]

To start I would say say more detail is required to be able to give you a proper impact assessment of if a LTD company could benefit you.

However there are some strong pro’s such as dividend payments being lower than income tax and being able to pay yourself a minimum salary still to maximise your personal allowance etc.

My main concern, as others have said, is the need to be VAT registered. As this is the most pressing issue as mandatory registration kicks in at turnover of £85k in a 12 month period.

The positive with VAT registration is that if you register (sounds like you need to) you can claim back VAT on goods bought within 6 months and services preciously incurred within 4 years that relate to taxable supplies made to customers from the registration date. (In simple terms you could get a good rebate on equipment purchased).

However this option is lost if you register as a Ltd company as the costs were not considered to be incurred by the company itself.

A discussion with an accountant would be advised to be able to properly assess your position and help with next steps. I have my own accounting practice and offer free consultations so let me know if you would like any help!

 

[Lisa Thomas]

Ltd company will give you more protection if the business becomes insolvent.

 

[Mark T Jones]

Based on the distinct and diverse nature of your trades, it might be best to be both sole trader & Ltd.

However I would certainly reiterate the advice about taking professional advice & focusing your efforts.