Going Limited?

[Peter]

Is anybody Limited and how much more work is it compared to sole trader status? Trying to get my head round it for a switch in the summer, anything particular worth noting?

One thing I can't find an answer for on the internet which maybe somebody can shed some light on.

I get CIS deducted payments to me at present from contractors. If I go Ltd does this mean the company will just get paid Gross? I would have other self employed subcontractor wages to pay out from this, I presume these would need to be done as CIS?

Cheers

 

[Dan]

Speak to an accountant because the timing with regards to your existing business takings at various points of the year will stipulate when it is most tax efficient to go Limited.

You can effectively gain some tax relief depending on the timing. So make sure you speak to a couple of different accountants and let them see your takings for the past year or something.

That aside, you'd end up paying corporation tax and doing your self assessment. So there's a bit more work involved. I'd let the accountants do the lot personally, you just do the bookkeeping to make it easy (therefore cheaper) for the accountant.

Some say its a pain in the arse. I say if it's more tax efficient and you earn more doing it, do it. It's a no-brainer.

I'm not clued up with CIS so let the lads or an accountant advise you there too.

 

[Dan]

Another thing.

Your business has a value. So you can gain some tax relief by selling the business to the newly-formed company. There's a correct way to go about that, but that's worth looking into. And will also be more valuable at a certain point in the year because the last few years takings get taken into account so if your business works out more valuable in 6 months time, because March & April 3 years ago you didn't turn over much, but 2.5 years ago from now you did, and the next 6 months are going to be good, then it's best to wait a 6 months so your valuation of the business is slightly higher, sort of thing.

If that makes any sense.