Sole trader or LTD?

robie · Jul 22, 2011

Hi, Ive been ltd for about 4 years now, it does cost more money for an accountant to do your books, and it is about a grand, well mine is about 12 hundred. Anyway, if you work for the same company and no one else for 2 years or more, I'm sure the tax man will come after you instead of your employer because his tax liability stops and it becomes yours, I know of a couple of people who have worked as a ltd comp because the employer specified this and they got investigated and had to pay out to the tax man.
Hope this helps

Ponty Massive · Jul 22, 2011

Benefits of LTD are limited liability, however as you say, insurances will cover you for misfortunes and these day, small LTD companies still need a personal guarantee from the director with regards to financing etc so it's still your house on the line if payments go tango uniform !

SW1970 · Jul 22, 2011

I'm ltd because of the ltd liability aspect. Public liability and professional indemnity insurance doesn't cover all eventualities, so if a client was to sue the company, my personal liability is limited to any money I have put into it and no more (aside from assets the company holds). Can't risk anything other than that. Some business clients are turned off by sole trader status. Luckily haven't had to put up a personal guarantee.

chrishaworth · Jul 23, 2011

Spartykus - there is no HMRC regs that say you have to use an agent, in fact there is a box on the Corporation tax return to tick if you do use one. If you are a small company (I think the current limit is profits under £300,000), then you do not require your accounts to be audited and can submit your own return. I've been doing both my own and the local community association's returns for years with no problems - the software won't let you send the return until the books balance properly.
Cheers, Chris

jparker3007 · Jul 24, 2011

chrishaworth, where did you get the sofware from and how much is it please?

chrishaworth · Jul 24, 2011

The software is downloaded when you do your corporation tax on line and is free. It's just a fancy pdf but contains all the calculators and checkers required. For day to day accounting I use Quickbooks which cost me about £60, however the P+L and balance sheet it produces need a fair bit of massaging before thwe figures fit into the HMRC format.
Cheers, Chris