Has anyone recently compared the tax efficiency of operating as an LLP compared to a limited company?
I've operated as a limited company for some years now, but am now considering the alternatives. I have been advised by agencies that they have no legal problem in using contractors through LLPs. My understanding is that that partners are taxed in the same way as sole traders, but have most of the liability protection benefits that are afforded by a limited company.
Why am I condsidering changing...
1. Car expenses that can be claimed as an employee of my limited company are limited to 40/25p per mile (unchanged for years!). When I used to operate as a sole trader I used to offset 90% of my total car expenses as 90% of my mileage was business related. I presume that the situation is the same with an LLP.
2. With an LLP I could utilise funds being accumulated to pay future tax bills in an Offset Mortgage. This is not possible with a limited company.
3. Assuming the accounting requirements for an LLP are no more complicated than a sole trader, I could do my own accounts. As a limited company I pay an accountant over £1,000 a year for the privilige.
4. The possible impact of S660.
I would welcome the comments of those more knowledgeable than myself in these matters.
I've operated as a limited company for some years now, but am now considering the alternatives. I have been advised by agencies that they have no legal problem in using contractors through LLPs. My understanding is that that partners are taxed in the same way as sole traders, but have most of the liability protection benefits that are afforded by a limited company.
Why am I condsidering changing...
1. Car expenses that can be claimed as an employee of my limited company are limited to 40/25p per mile (unchanged for years!). When I used to operate as a sole trader I used to offset 90% of my total car expenses as 90% of my mileage was business related. I presume that the situation is the same with an LLP.
2. With an LLP I could utilise funds being accumulated to pay future tax bills in an Offset Mortgage. This is not possible with a limited company.
3. Assuming the accounting requirements for an LLP are no more complicated than a sole trader, I could do my own accounts. As a limited company I pay an accountant over £1,000 a year for the privilige.
4. The possible impact of S660.
I would welcome the comments of those more knowledgeable than myself in these matters.
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