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Should I go LTD?
Hi All,
Today marks my first full month trading as a sole trader. And it’s been a very busy first month, much busier than I thougt it would be. I have set my targets, and I met them, this week I doubled my target, and looks as if I will smash it again next week.
I have been pondering over the last week, whether I should go Limited or stay as a sole trader? I guess a lot of you have had to decide this, could some of you more wiser (and older!!! :lol1:) provide me with advice on this? 🙂
Thanks in advance,
Matt
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10 Replies
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Matt
you are best to speak with an accountant he will be able to look at your figures and advise whats best for your circumstances.Kev
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Agree with Kev, ask your accountant – it has advantages and disadvantages, my old boss was turning over 800k per year and still a sole trader.
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Thanks Both!
At the moment I’ve been doing the books myself, but have been looking into whether staying as a sole trader or not…
I’ll ring around and find a good accountant on monday, and take it from there 🙂
Thanks for your answers lads 🙂
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I’m having this dilemma too. I’m just finishing my first year as a sole trader and will be speaking to my accountant over the next couple of weeks. I’ll be interested to hear some of the pros and cons….
Stafford
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We are Ltd but it wasn’t a tax decision more of the Limited liability.
I wouldn’t want to be personally liable should anything happen to the business.
Cheers
Gary
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I’ve got a meeting with an accountant this week, so I’ll see what they think I should do, for the financial side.
Also Gary, that’s another big reason I’m considering it, don’t want to be left liable if anything were to happen.
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The ‘Limited Liability’ is the main reason, but remember, it will mean and increase in your paperwork, as company house requires annual report & accounts + annual return.
There is also a few more tax inplications that your accountant will explain – You can no longer ‘dip’ into your companys money, like you could as a sole trader (Sole trader = you & the comapny are the same thing) you’ll get a wage instead and a company divided at the end of the year (again accountant will help with this, as for tax purposes a low weekly wage with a nice large divided is better for tax purposes), and there are a few company directors legal duites.
Personally I’m not LTD, but my Wife’s shop is LTD – I’ll look at it again in the future but my accountant adviced me against going LTD just yet.
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The dividend doesn’t have to be taken annually Colin. I take a monthly dividend and then as and when the business can afford it. I have to as I just can’t survive on minimum wage 😉
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Hi
When we switched to being Ltd, the new Ltd company bought out the sole trading company, putting an amount in a Directors Loan Account on the books of the Ltd company – to be drawn down as and when we wanted (or could afford to). It meant an initial tax payment but overall it was a very tax efficient method of releasing value out of the companies – again speak to an Accountant.
Cheers
Macky -
Well if you do decide to go limited, make sure you don’t fall foul of this fiendish scam 😕
https://www.uksignboards.com/viewtopic.p … 973#429973
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