LTD or Sole Trader

[Brucey]

Obviously alot of pros / cons to both, but just wanted to feel what people set up as most?

I'm just as a sole trader.

 

[Roger Welton]

Sole trader here also.

 

[gasmanrob]

Sole trader going limited due to vat threshold being exceeded

 

[SimonG]

Sole Trader.

 

[Chalked]

Sole trader.

 

[townfanjon]

sole trader here

 

[TBServices]

Sole brother

 

[lame plumber]

no such thing as "just a sole trader" its us that creates an economy

 

[PlumbBobBob]

sole trader

 

[villa_tom]

I'm a sole trader, but I know a lot of chaps that are changing to ltd, it just seems like more hassle to me.

 

[bacon_sandwich]

Ltd and VAT reg, Mrs B_S likes her divi.. lol

 

[helpsy]

Sole trader

 

[Roger Welton]

Main benefit of going ltd as I'm aware are various tax wheezes when you get up towards the higher rate.

Any notion of debts not following you personally are long gone!

 

[erpkid]

Ltd here. No chance of losing your home if you get burnt. Just be careful if you go limited that you don't give any personal guarantees then you will have the risk of an individual with the overhead of a company.

 

[Mrs Tara Plumbi]

Main benefit of going ltd as I'm aware are various tax wheezes when you get up towards the higher rate.

Any notion of debts not following you personally are long gone!

Yes I think this is right if you are above higher rate of Tax level can be worth looking into.

We are Ltd.
I think there is not a lot in it and as far as I know it means we get to pay corporation tax many months later, after the financial year.
Whereas sole traders pay some Income tax in advance before end of tax year.
But then again we (Mr TP & I) are also employees so we do have to pay income tax & NI & employer's NI contributions monthly through the whole year.
So probably no benefit one way or the other.....

An the cost of assets can be spread over years (helping spread tax bills), I'm not sure if that is possible for sole traders - maybe it is?

In the long run there can be some tiny benefits in that the business is a separate legal entity. So it is possible to get a loan (secured against assets) in the name of the Ltd business that does not show up on your own personal credit record. - Even though you might guarantee these loans or they are secured on your business assets.

There is very little FREE credit, so most credit does have to be backed by directors guarantee so as said you can't think of it as a way of walking away from debts.

 

[negas]

Ltd here but don't have credit accounts pay as we go

 

[PlumbersMate]

If you turn over more than 40k do you have to be vat reg?

 

[mutley racers]

Sole trader

 

[gasmanrob]

If you turn over more than 40k do you have to be vat reg?

HM Revenue & Customs: VAT rates, thresholds, fuel scale charges, exchange rates

£81k

 

[mutley racers]

Still a long way to go for me

 

[gasmanrob]

Could always go voluntary

 

[bacon_sandwich]

Two main financial advantages with Ltd, your personal assets are not at risk, e.g. House, car, DVD collection etc , other is that you don't have to pay yourself a wage above income tax or NI threshold and take all income / profit as dividend. The dividend is then split across shareholders, in my case any profit made is split between me and Mrs B_S, it suits our personal circumstances.

 

[Mrs Tara Plumbi]

Two main financial advantages with Ltd, your personal assets are not at risk, e.g. House, car, DVD collection etc , other is that you don't have to pay yourself a wage above income tax or NI threshold and take all income / profit as dividend. The dividend is then split across shareholders, in my case any profit made is split between me and Mrs B_S, it suits our personal circumstances.

Well put.

As for VAT
If you mostly supply and fit then it is very easy to reach this threshold without even making a profit!

I find this tax to be very unfair in real life.
On top of materials many of our our have £5k-£10k or more on top, so the guys working for undeclared cash - there are a lot of them -
can massively under cut us whilst actually making more money than us.

To be fair Either we should all be VAT registered or non of us should be.
Or to make paperwork easier we should not have to collect it at all!

 

[Hirstgas]

If you turn over more than 40k do you have to be vat reg?

Hope not haha

 

[bacon_sandwich]

Well put.

As for VAT
If you mostly supply and fit then it is very easy to reach this threshold without even making a profit!

I find this tax to be very unfair in real life.
On top of materials many of our our have £5k-£10k or more on top, so the guys working for undeclared cash - there are a lot of them -
can massively under cut us whilst actually making more money than us.

To be fair Either we should all be VAT registered or non of us should be.
Or to make paperwork easier we should not have to collect it at all!

Absolutely, vast majority of my work is commercial / industrial, stuff costs thousands, like a burner for £1100 ex VAT, if I wasn't VAT reg I would be massively un-competitive. On the other hand any work I do domestically I basically earn about 10% less because I cannot charge the same rate to get the work. So I don't advertise for domestic and just do stuff for friends and family. Someone I spoke to mentioned that you could set up another company that is not VAT reg and deal with the domestic stuff through that company BUT I think I would disappear up my own backside trying to keep my suppliers invoices and expenses aligned with each company.

 

[hammers4spanner]

Sole trader if you go Ltd and sherrifs ever call then you can whistle to your van and tools

 

[newcastle phill]

Didnt think they could touch tools of the trade - is that for sole trader

 

[hammers4spanner]

They can take your tools and vans if your Ltd

 

[newcastle phill]

Thats right sole trader they take your gaff but leave you your van to sleep in