fullpint
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 posted on 3/2/13 at 05:30 PM |
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Any Sole Traders gone Limited on here?
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
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coozer
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| posted on 3/2/13 at 05:31 PM |
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I'm LTD and cant see any disadvantage. In fact more clients accept me over being sole trader.
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mookaloid
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| posted on 3/2/13 at 05:48 PM |
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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 
"That thing you're thinking - it wont be that."
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Slimy38
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| posted on 3/2/13 at 05:59 PM |
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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.
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BangedupTiger
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| posted on 3/2/13 at 06:03 PM |
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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.
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fullpint
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| posted on 3/2/13 at 06:16 PM |
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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]
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catman
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| posted on 3/2/13 at 06:31 PM |
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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
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tegwin
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| posted on 3/2/13 at 06:31 PM |
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***Devils advocate*****
Is your accountant advising you to change because he charges LTD companies more for his services?   
------------------------------------------------------------------------------------------------------------------------
Would the last person who leaves the country please switch off the lights and close the door!
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fullpint
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| posted on 3/2/13 at 07:04 PM |
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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 -
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splitrivet
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| posted on 3/2/13 at 07:48 PM |
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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
I used to be a Werewolf but I'm alright nowwoooooooooooooo
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BangedupTiger
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| posted on 3/2/13 at 07:59 PM |
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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.
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JonnyS
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| posted on 3/2/13 at 10:44 PM |
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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.
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Simon
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| posted on 3/2/13 at 11:02 PM |
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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
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skydivepaul
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| posted on 3/2/13 at 11:17 PM |
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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
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JonnyS
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| posted on 4/2/13 at 07:04 AM |
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quote:
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.
There is plenty more work involved in a limited company than a sole trader. No sane accountant would charge the same!
Fees will depend on the business and £1K shouldn't be seen as a flat rate. Way too much for some limited companies. I charge my smallest limited
£200 and the largest £15,000. All depends on what services they need/how large they are/quality of records/experience etc etc.
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Not Anumber
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| posted on 4/2/13 at 10:18 AM |
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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.
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JoelP
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| posted on 4/2/13 at 03:18 PM |
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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!
Beware! Bourettes is binfectious.
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mookaloid
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| posted on 4/2/13 at 03:26 PM |
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quote:
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!
I can give you the phone number for mine in Harrogate if you like - he seems very good
Mark
"That thing you're thinking - it wont be that."
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JoelP
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| posted on 5/2/13 at 08:11 AM |
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That would be much appreciated if you could please Mark!
Beware! Bourettes is binfectious.
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