Ive been trading for nearly 3 years now and my accountant reckons I could save money by going Limited? Im not at the £75K treashold.
Has anoyone on here gone from a Soler Trader to a Limited company and if so do you have any regrets?
I would appreciate your comments.
Cheers; Steve

I'm LTD and cant see any disadvantage. In fact more clients accept me over being sole trader.

I would do what your accountant says. He knows your business and he is best placed to advise you.

There are other advantages to do with limiting your liability but if your accountant says do it then do so

I went Ltd but it was IT contracts so it wasn't quite the same. As coozer says, there's lots of benefits over a 'sole trader' environment. And that 75k limit is purely an advisory for what HMRC consider it to be worthwhile, you can go limited below that.

Listen to your a accountant.

I'm guessing it's due to levels of profits, and the most tax efficient way to get these out the business.

Profit levels are good and the business is still young but I cant see me invoicing over £75K for a couple of years yet. That way I don't have to add vat onto my prices which may push away some work.
Some valid points tho. Main one being taking the advise of my accountant! I guess thats his job and he will know best.
It just all new to me. Call me old fashion.. Don't like changes when every thing seems to be working out as it is!! But if it's for the best then I guess thats the way to go..

[Edited on 3/2/13 by fullpint]

I would stay sole trader for a while as the hassle and extra paper work can be a pain. However i dont know your business and the figures involved. remember you may be more tax efficent as limited but your accountant fees will go up........................remember who is advising you to go limited.

I have just re read this... is your accountant trying to get you to be vat registered (which you have to do over a certain threashold, but you can opt for a flat rate vat system that keeps the paperwork down) This could push away domestic customers as your cost will go up 20%

or is he advising you to go limited which you dont have to do at any point. I know of many sole traders that turn over 250k a year.

Ed

***Devils advocate*****

Is your accountant advising you to change because he charges LTD companies more for his services?

His fees are £1000 a year to maintain the Limited company with NO other fees (apart from a £200/year to run the pay roll) and un-limited phone calls/emails and meetings. He will also do the vat returns..
I guess going Limited is going to have its + and -

Only you know your business not your accountant much as he thinks he does, the only big advantage is liability and at your turnover thats negligable.
One of the main reasons he's probably pushing it is a lot of the larger accountants now will only accept LTD companies on thier books and they can charge larger fees.
Your probably taking the best course in asking around but remember in business not everyone gives a honest answer.
Cheers,
Bob

Profit levels are the only real reason I would advise the switch to LTD status.

Limited status will nearly always mean you as an individual can have greater net pay.

Ask your accountant why he feels it would save you money.

You may remember me as Jonny off the Coupe Forum? Met your wife (and possibly you?) at Coombe before

As an accountant:

Ignore the few cynical posts about accountants on this thread. Your accountant is most likely advising this switch because you'll save thousands in National Insurance. There are of course other benefits (and also some disadvantages). And of course, he'll make a few more quid

Out of interest, how much do you currently pay as a sole trader? Depending on how good your records are, you could be paying over the odds to be honest.

Message me if you want.

We went ltd co a few years ago. You can pay yourself a divi on which you will pay corporation tax (approx 21%), you can put your personal tax allowance on payroll and NI contribs I'm a bit unsure about, but think its about 2 quid a week.

Your accountant will handle everything for you anyway so why not. From our experience it's been well worth it.

ATB

Simon

If you deal mainly with other businesses then the VAT element will not matter as they will offset this in their VAT return
if you deal with domestic or non VAT registered clients then your prices will be 20% higher

IMHO I have started 2 companies and both were LTD from day 1. Many advantages over being a sole trader
As stated before if you trust your accountant then go LTD
£1000.00 per annum seems to be the going rate for doing your books, VAT etc. This should not change if you change to a LTD company.

I would also advise (if you already havent) getting an accounting software package (sage / quickbooks etc) as long as you keep up with entering your invoices in / out your quartely VAT return takes about 30 seconds!!

I have seen other business owners taking 2 to 3 days to do their VAT return by hand !!!! sage costs around £100.00 so is well worth the money

quote:

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Originally posted by skydivepaul

£1000.00 per annum seems to be the going rate for doing your books, VAT etc. This should not change if you change to a LTD company.

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I have done both at different times and would now always go the limited company route.
A pal of mine stayed as a sole trader, became VAT registered and then had problems a few years later when he packed it all in to do something else. He had to show proof he was now employed by someone else and that the money coming into his bank account wasn't as a result of trading. A sole trader's VAT registeration applies to the individual. it would be difficult for a sole trader to run 2 seperate business activies and account for VAT one one of them.
However you would always have the notional option of setting up 2 limited companies, one being VAT registered, the other not - so long as that one's turnover stays below the threshold and you can show that they are 2 seperate businesses with different purposes rather than a dodge.

I keep meaning to go ltd, partially cos i think id save a couple of grand, but also so i can get childcare vouchers (maybe another grand to save there). Just never get round to finding a good accountant!

quote:

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Originally posted by JoelP
I keep meaning to go ltd, partially cos i think id save a couple of grand, but also so i can get childcare vouchers (maybe another grand to save there). Just never get round to finding a good accountant!

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That would be much appreciated if you could please Mark!