Sole trader vs Limited

**TheMonkey** · 3 May 2006, 10:00

Sorry - just to add - i'm really lazy but stingy at the same time if that helps people. I run my own accounts (successfully) and survived a PAYE investigation.

**The Lone Gunman** · 3 May 2006, 10:00

Originally posted by TheMonkey

Is there any advantage in dumping my Limited and acting as a sole trader? My workload is pretty much 50% contract through agencies (daily) and 50% through private work (hourly). I really can't be bothered with the hassle of running a Limited any more. The company takes just under the VAT threshold at the moment so it's not even complicated by VAT.

I can get liability insurance for a lot less than it costs to run my Limited in time and money so there goes the only visible advantage in my eyes.

I don't do anything funny with tax - I pay myself a full salary via PAYE so the company has pretty much £0 profit every year.

Am I being insane?

The biggest problem you will have is the reason we all went limited in the first place. A long time ago in a galaxy far far away......the Tories introduced legislation which stated that a client company or the agent could be held responsible for the unpaid tax of sub-contractors taken on a self-employed basis. (Distant memory so may be a little innacurate).
Not many companies will take you on in case they end up paying your tax should you do a runner.

**Fellman** · 3 May 2006, 10:02

As I understand it, the reasons agencies won't accept your status as 'sole trader' is due to any future recriminations such as trying to claim employee status, etc.

I'm sure agents sell this point to clients too.

**TheMonkey** · 3 May 2006, 10:02

Originally posted by The Lone Gunman

The biggest problem you will have is the reason we all went limited in the first place. A long time ago in a galaxy far far away......the Tories introduced legislation which stated that a company or the agent could be held responsible for the unpaid tax of sub-contractors taken on a self-employed basis. (Distant memory so may be a little innacurate).
Not many companies will take you on in case they end up paying your tax should you do a runner.

Oh well that makes sense now. What absolute bastards. First the tories rip you a new asshole, then Mr Blair widens it.

**TheMonkey** · 3 May 2006, 10:03

In all, I think I should have stuck to permanent work - but I don't like people so I can only stand them for 6 months at a time, which doesn't look good on your CV.

**The Lone Gunman** · 3 May 2006, 10:13

Originally posted by TheMonkey

In all, I think I should have stuck to permanent work - but I don't like people so I can only stand them for 6 months at a time, which doesn't look good on your CV.

Stick to contracting, it is much more fun and if you are capable of doing your own accounts then you are more than capable of making contracting work.
Try the sole trader route but ask your clients/agent to confirm in writing that they will only deal with a Ltd company as this is good evidence if IR35ed.
Bite the bullet and put up with running a company. Maybe employ an accountant to take away soem of the hassle.

Sole trader vs Limited