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Sole Trade -v- Limited Company

Discussion in 'Accounts & Finance' started by DFL, Mar 13, 2008.

  1. AnthonyP

    AnthonyP UKBF Newcomer Free Member

    6 2
    In terms of financial advise, i would say that having a limited company does not ensure the best return to your investments due to the higher taxes that this type of company will have to pay, so it would win the sole trader for financial investments.
     
    Posted: Jan 7, 2016 By: AnthonyP Member since: Dec 30, 2015
  2. StevensOnln1

    StevensOnln1 UKBF Big Shot Free Member

    3,284 706
    What higher taxes are you referring to? Operating as a limited company is generally more tax efficient than a sole trader if you have substantial profits.
     
    Posted: Jan 7, 2016 By: StevensOnln1 Member since: Dec 10, 2011
  3. john1989

    john1989 Guest

    0 0
    None of the post made much sense to me.

    Probably best to be taken with a large pinch of salt.
     
    Posted: Jan 7, 2016 By: john1989 Member since: Jan 1, 1970
  4. daisy13

    daisy13 UKBF Newcomer Free Member

    28 4
    Would be great if this thread Sole Trader v Ltd Co could be updated to take into account the recent 2016 budget changes (specifically re dividends and changes to Corp tax). Many thanks in advance.
     
    Posted: Apr 4, 2016 By: daisy13 Member since: Jan 17, 2012
  5. Bob

    Bob UKBF Big Shot Free Member

    3,668 929
    Posted: Apr 4, 2016 By: Bob Member since: Jul 24, 2009
  6. jf-financial

    jf-financial UKBF Contributor Full Member

    72 13
    Hi daisy13,

    We have an updated article on the topic of sole trader vs limited company for 16/17 here

    thanks
    John
     
    Posted: Apr 5, 2016 By: jf-financial Member since: Aug 9, 2013
  7. AnnaDanishek

    AnnaDanishek UKBF Contributor Free Member

    30 2
    It is very useful to know this. I'm setting a company and wasn't sure about the type of company I should choose!
     
    Posted: Apr 25, 2016 By: AnnaDanishek Member since: Apr 14, 2016
  8. Bootleggeruk

    Bootleggeruk UKBF Newcomer Free Member

    1 0
    Still in the dark as to go down the sole trader route or limited company. I'm in the process of starting my own chauffeur business one man operation, and getting the vehicle on lease hire. Running the business from a spare bedroom in rented accommodation. Expecting to make around £30,000 pa before paying anything (Tax,NI and hire charges).
    Was going down the route of Sole trader but Limited Company may give my clients a reason to use me, more professional etc.

    Any thoughts?
     
    Posted: Jul 19, 2016 By: Bootleggeruk Member since: Jul 19, 2016
  9. Scalloway

    Scalloway UKBF Legend Free Member

    13,525 2,921
    I would suggest speaking to an accountant. One thing to note is that if you do go limited the lease would need to go in the limited company name.
     
    Posted: Jul 19, 2016 By: Scalloway Member since: Jun 6, 2010
  10. TODonnell

    TODonnell UKBF Ace Full Member

    1,381 208
    What bothered me when I set up my own company (before I came to work for Registered Address) was that, as a sole trader, I might be sued by a client if a project went skew-whiff.

    AFAIK, a sole trader can possibly lose his house, in that case, as he is the entity his clients are contracting with.


    The other bit of received wisdom is that you should get an Ltd if your (income/profit?) is over £24k. However, good ole' HMRC is constantly changing its tactics to squeeze money from the working stiff, so up-to-date accountancy advice is crucial.

    I don't recommend setting one up on a whim; the annual returns are a bore and a chore.

    Knowing what I know now, if the niche isn't one likely to attract litigation, one should start as a sole trader, see if you have a profitable business, then change to LTD when it becomes essential.

    Chauffeuring sounds like it could be a minefield, so ...
     
    Posted: Jul 20, 2016 By: TODonnell Member since: Sep 23, 2011
  11. David A

    David A UKBF Enthusiast Free Member

    577 134
    But most landlords would want a personal guarantee before agreeing to rent to a limited company, so BootleggerUK could easily keep the lease in his name, and then charge the company for use of the vehicle.
     
    Posted: Jul 20, 2016 By: David A Member since: Mar 25, 2011
  12. David A

    David A UKBF Enthusiast Free Member

    577 134
    [post removed]

    Hmmm ...

    It's not really forum etiquette for a free member on the first day of joining to tout for business. For the good of your reputation, it's normally expected that you contribute to the general good first.
     
    Last edited by a moderator: Oct 18, 2016
    Posted: Oct 18, 2016 By: David A Member since: Mar 25, 2011
  13. Kalash

    Kalash UKBF Newcomer Free Member

    1 0
    I agree ! Thanks
     
    Posted: Feb 12, 2017 By: Kalash Member since: Feb 12, 2017
  14. Taxed

    Taxed UKBF Contributor Free Member

    42 4
    Is there an online LTD company tax calculator anywhere? That covers dividends, salaries, tax, etc?

    Or is it too complicated to put into an online calculator?

    If not, it might be helpful to help people get a rough idea of what might work best for them.
     
    Posted: Mar 10, 2017 By: Taxed Member since: Nov 4, 2016
  15. Scalloway

    Scalloway UKBF Legend Free Member

    13,525 2,921
    There used to be one or two as I recall but I can't find them now. I guess it is as much because there is very little tax advantage in going limited.
     
    Posted: Mar 10, 2017 By: Scalloway Member since: Jun 6, 2010
  16. SW-Auto-Tools

    SW-Auto-Tools UKBF Newcomer Free Member

    2 0
    been trying to decide myself if I should stay as sole trader or switch to limited after reading through the forum I don't think I would benefit from limited, however I am going to have to register for VAT, currently on cash basis accounting question is would I have to change from this or can you still be VAT registered and use a cash basis up to a certain amount of sales?
     
    Posted: Mar 16, 2017 By: SW-Auto-Tools Member since: Mar 15, 2017
  17. Scalloway

    Scalloway UKBF Legend Free Member

    13,525 2,921
    Posted: Mar 16, 2017 By: Scalloway Member since: Jun 6, 2010
  18. SW-Auto-Tools

    SW-Auto-Tools UKBF Newcomer Free Member

    2 0
    I had read that it just threw me as a few pages on it states -

    'You can start to use cash basis if you’re VAT registered as long as your income is £83,000 or less during the tax year.'

    Also sounds as tho it covers you up to £166,000 if you go over in your first year but if your going to be over the 83k the following year you would have to switch or am I reading it wrong?
     
    Posted: Mar 17, 2017 By: SW-Auto-Tools Member since: Mar 15, 2017
  19. Scalloway

    Scalloway UKBF Legend Free Member

    13,525 2,921
    From the link I quoted.

    I take it that it means as long as you do not exceed £166,000 in the year you can use the cash basis for as long as you want. If you go above £166,000 you can't go back to it until your income goes below £83,000.
     
    Posted: Mar 17, 2017 By: Scalloway Member since: Jun 6, 2010
  20. Steven Wood

    Steven Wood UKBF Newcomer Free Member

    2 0
    Going into the small restaurant business with my son (he has managed the restaurant for some years, but we are now purchasing said business). I am also a full time social worker (employed by my Local Authority) and will be maintaining this OR going independent as a social worker. With regards to tax purposes and my own personal circumstances (as briefly described above), I am totally lost as to whether the restaurant would best be set up as a partnership or Ltd co and also whether my proposed independent social work should be sole trader or Ltd co. The restaurant currently takes annual net profits between 40 to 45k. As an employed social worker I earn 39k annually. Were I to go independent with social work, I would be looking to earn 35 to 40k annually (but would leave my employed position). Any tips would be greatly appreciated?
     
    Posted: Mar 19, 2017 By: Steven Wood Member since: Mar 19, 2017