NorfolkAYA Posted January 23, 2018 Report Share Posted January 23, 2018 Hi all, too all the self employed out there, how do you run your company?. Sole trader or LTD?. Pros and cons?. Cheers pete Quote Link to comment Share on other sites More sharing options...
buze Posted January 23, 2018 Report Share Posted January 23, 2018 I run a LTD... Pros are various: + Ability to deal with VAT with the simplified skim, or not. (be careful with the simplified skim if you want to invoice outside the EU!) + More 'serious' look when dealing with other corporations + Dividends are /still/ more interesting than the PAYE breakdown. + Ability to sub-contract stuff and act as an agent. + Etc Downside are: + Setup price + You likely need an accountant to keep track of stuff, like VAT reports, PAYE stuff etc + You need extra insurance I was freelance for a long while, and some years I had to literally stop working not to fall into the VAT slice which would have made my life very complicated.. I think at the time it was 80k; some years I worked just 9 months. After a while I decided to just go LTD, pay the VAT, the taxes and not have to worry. If your income is less than the VAT threshold, it still migth be worth it to stay freelance if you want simplicity... I still recommend an accountant you can count on, year in/out -- I'd stay away from big accounting firms as they don't 'know' you -- I've been with my accountant for 18 years now, he even was one of my reference for my SGC -- a good relationship with a serious chartered accountant will save you peace of mind AND money in the long run... Quote Link to comment Share on other sites More sharing options...
DanBettin Posted January 23, 2018 Report Share Posted January 23, 2018 Ltd here. I wouldn't attempt it without an accountant, as already mentioned. Insurance I guess would depend on your trade. In fact, many of the answers to pros and cons could be trade specific. The finance stuff buze already pretty much covered. One example of a trade-specific thing that might sway it is, for example, in software development (what I do), a lot of agencies won't deal with sole traders. Could've been a big deal for me, although I'd expect I was going direct sooner rather than later to clients - I didn't want to rule out the use of an agency. Quote Link to comment Share on other sites More sharing options...
Lloyd90 Posted January 23, 2018 Report Share Posted January 23, 2018 Depends entirely on type of business Quote Link to comment Share on other sites More sharing options...
figgy Posted January 24, 2018 Report Share Posted January 24, 2018 Forget worrying about the VAT it matters not you're only a collector for the government, gone are the days of making a bit for collecting it, you add it to your bill invoice put it to one side and then pay it to the vat man quarterly. I have both ways over the years but with the recent changes asked around more knowledgeable folk and LTD company is still the way to go. Even with the recent CIS4 20% deductions for your personal paye part of your income, if this is not all used to pay your personal tax it can be offset and used to pay all or towards corporation tax bill depending how much is left. Quote Link to comment Share on other sites More sharing options...
Doc Holliday Posted January 24, 2018 Report Share Posted January 24, 2018 The only real difference is the protection of your personal assets being a Limited Company. If someone sues you as a sole trader, for whatever reason, then they can quite literally have the shirt off your back. If they sue the limited company then liability is limited to the company's assets and not yours. Ither than that I think you can pay yourself and any other director up to £5k tax free every year so long as the company's profits allow it, obviously. A bit more paperwork on the Ltd side but a good accountant would be on top of that. But that is it, in a nutshell. Quote Link to comment Share on other sites More sharing options...
Mungler Posted January 24, 2018 Report Share Posted January 24, 2018 As above, go limited for personal asset protection - especially if you do anything with risk of a claim against you or there's the risk of non payment e.g. anything in the construction industry. However, if you have no assets or they are all in the wife's name then you can go sole trader because administratively it's easier. Quote Link to comment Share on other sites More sharing options...
getthegat Posted January 24, 2018 Report Share Posted January 24, 2018 I've been LTD for years. I have a garage with ,2 of my son's. Ltd was recommended by a previous accountant (sadly moved abroad) and to date it has always been beneficial and financially better. I have a great accountant, not expensive, always there with advice. I consider him key to a good business and yes if you were to be sued, as sole trader they can take everything, not so as Ltd. Quote Link to comment Share on other sites More sharing options...
mowdy Posted January 25, 2018 Report Share Posted January 25, 2018 I used to be ltd and went back to sole trader and do find it a lot easier on the paper work you can still be sued as a Ltd director just like a sole trader as my mate found out with the Environment agency. if your worried about being sued take out legal insurance Quote Link to comment Share on other sites More sharing options...
CharlieT Posted January 25, 2018 Report Share Posted January 25, 2018 1 hour ago, mowdy said: I used to be ltd and went back to sole trader and do find it a lot easier on the paper work you can still be sued as a Ltd director just like a sole trader as my mate found out with the Environment agency. if your worried about being sued take out legal insurance I think you will find people are referring to being sued for debt, which obviously is not covered by legal insurance. Quote Link to comment Share on other sites More sharing options...
DanBettin Posted January 26, 2018 Report Share Posted January 26, 2018 17 hours ago, mowdy said: I used to be ltd and went back to sole trader and do find it a lot easier on the paper work you can still be sued as a Ltd director just like a sole trader as my mate found out with the Environment agency. if your worried about being sued take out legal insurance I never understand this reasoning (no offence). If you choose to run a business, accept there'll be some paperwork. Making what's arguably the wrong choice in business to save on paperwork baffles me. I hear this a lot, contractors like me choosing to operate under umbrella/sole trader for the sake of filling out some paperwork. Madness. Quote Link to comment Share on other sites More sharing options...
mowdy Posted January 26, 2018 Report Share Posted January 26, 2018 (edited) 2 hours ago, DanBettin said: I never understand this reasoning (no offence). If you choose to run a business, accept there'll be some paperwork. Making what's arguably the wrong choice in business to save on paperwork baffles me. I hear this a lot, contractors like me choosing to operate under umbrella/sole trader for the sake of filling out some paperwork. Madness. I employed 10 men when I was limited and dropped back down to a sole trader and came out of the vat as well I saved upwards of 10k a year in acountants fees and extra insurance and tax There are quite a few other company’s I know who have also deregistered since the tax breaks have changed. The tax man is also looking at closing umbrella company’s as they look at them as tax evasion schemes. going back to sole trader worked very well for me each to there own Edited January 26, 2018 by mowdy Quote Link to comment Share on other sites More sharing options...
vampire Posted January 26, 2018 Report Share Posted January 26, 2018 6 hours ago, mowdy said: I employed 10 men when I was limited and dropped back down to a sole trader and came out of the vat as well I saved upwards of 10k a year in acountants fees and extra insurance and tax There are quite a few other company’s I know who have also deregistered since the tax breaks have changed. The tax man is also looking at closing umbrella company’s as they look at them as tax evasion schemes. going back to sole trader worked very well for me each to there own Same here,most domestic customers hated that i had to charge vat,now i am sole trader again but have insurance,liability etc and only work for domestic customers and a long waiting list. Quote Link to comment Share on other sites More sharing options...
Remimax Posted January 26, 2018 Report Share Posted January 26, 2018 when you look at ltd company's on company house how can you be shown as" actve" but have no declared accounts and minimal assests like £150 logged. i thought you had to file full accounts every year. Quote Link to comment Share on other sites More sharing options...
CharlieT Posted January 27, 2018 Report Share Posted January 27, 2018 20 hours ago, Remimax said: when you look at ltd company's on company house how can you be shown as" actve" but have no declared accounts and minimal assests like £150 logged. i thought you had to file full accounts every year. By not trading. As an example, I have a company registered but don't submit accounts because it's not trading as in it has no income, expenditure or assets other than the share capital. Quote Link to comment Share on other sites More sharing options...
Remimax Posted January 27, 2018 Report Share Posted January 27, 2018 2 hours ago, CharlieT said: By not trading. As an example, I have a company registered but don't submit accounts because it's not trading as in it has no income, expenditure or assets other than the share capital. ah i see ,thanks for clearing that up. Quote Link to comment Share on other sites More sharing options...
team tractor Posted January 28, 2018 Report Share Posted January 28, 2018 You can still loose your house being ltd . My mate discovered this . He tried closing down owing money and had to personally pay off his debt. Quote Link to comment Share on other sites More sharing options...
sitsinhedges Posted January 28, 2018 Report Share Posted January 28, 2018 50 minutes ago, team tractor said: You can still loose your house being ltd . My mate discovered this . He tried closing down owing money and had to personally pay off his debt. I think that bank loans etc often have to be personally guaranteed or they will be refused. Quote Link to comment Share on other sites More sharing options...
millrace Posted January 28, 2018 Report Share Posted January 28, 2018 Since recession virtually all credit to a new ltd company requires personal guarantee so the days of thinkin you wont lose your house are gone..... Quote Link to comment Share on other sites More sharing options...
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