Advice on setting up a limited company

Any advice on setting up a limited company?

I am currently working as a sole trader but my business is quite rapidly expanding and I don't know whether it is worth setting up as a limited company.

Does anyone have any experience on this at all?

Thanks!

as far as i know it's fairly easy to do, you can get the prices from the companies house web site but it used to be something like £50. there are, of course, people who will do it for you and charge accordingly.

as to whether incorporating is for you or not then you probably need to talk to a proper accountant.

I'd second the advice to speak to your accountant.

It will change your tax situation obviously, it may increase some of your costs, it might save you money in tax, but without doing some specific calculations nobody will know.

Setting up a company is relatively easy, but it will probably mean a bit more paperwork for either you or your accountant, quarterly vat returns, annual returns, in addition to your personal self assessment which you'll still need.

if your profits are more than your personal allowance then yes set up a ltd co even if not vat reg. lots of claims for things like home office etc to be put through, pay yourself in dividends. your accounting will be more than a sole trader.

Cheers! I think I will have a word with an accountant who should be able to advise me.

The advantage in final pay is not so great since the tax laws around dividends were changed.

The advantage in final pay is not so great since the tax laws around dividends were changed.

it is if you know what you are doing and have a good accountant.

No, it isn't. You can't magic away the dividend tax rates.

---------- Post added 02-08-2017 at 15:47 ----------

I'm sure you won't take my word for it though.

Tax

Due to the changes in dividend taxation for 2016/17 there is a narrowing of the tax advantages that trading as a limited company offers over a sole trader. As such, for the 2016/17 tax year at least, the tax saving of a limited company are not as large and at some levels of profitability are not sufficient in isolation to make the decision clear-cut.

http://jf-financial.co.uk/2016/03/30/sole-trader-vs-limited-company-201617/

This article considers profit of up to 80k, by which point you are 1.5k better off as a limited company... The optimum is actually 55k, where you're 2.5k better off as a limited.

This ignores the costs of running a ltd though, £1000 a year to an accountant for example.

No, it isn't. You can't magic away the dividend tax rates.

 

---------- Post added 02-08-2017 at 15:47 ----------

 

I'm sure you won't take my word for it though.

 

 

 

http://jf-financial.co.uk/2016/03/30/sole-trader-vs-limited-company-201617/

 

This article considers profit of up to 80k, by which point you are 1.5k better off as a limited company... The optimum is actually 55k, where you're 2.5k better off as a limited.

This ignores the costs of running a ltd though, £1000 a year to an accountant for example.

who mentioned magicing away dividend rates?? all i was saying is that the whole LTD co set up with good accounting is far more favourable than a sole trader when you factor in lots of other stuff like personal pensions etc.

who set you up as Know all of SF anyway you seem to have a massive spread of Knowledge on almost every thread:roll:

You didn't mention personal pensions at all, although I don't think the benefit is that large there either. With pension contributions you pay no tax however you make them.

Does someone need "setting up" if they know things?

There isn't a massive advantage in incorporating since the changes to the law surrounding dividends in the last few years. That's just the way it is.

The major advantage of incorporating can be that of protecting your personal assets if this start to go belly up.

some sole traders got LTD to protect the name of they are trading under, then make the company dormant until they are wanting to go LTD