Reply to: Do i need an accountant?

[poopscoop]

NO!!

actually it is... ask an accountant

[VectraMan]

NO!!

Well technically it is true that income tax is less than corporation tax, or at least more or less the same, up to the upper earning limit. It's NI that's the killer (especially the employers bit).

Nothing to stop you going Ltd. and paying all the money as salary, making no profit, and so having no corporation tax to pay. And the good news for onyerbike is that if you do that, you should get 40% of your expenses back.

And if you believe that's a good idea, you really need an accountant.

[Waldorf]

Any truth in this? sole trader here I come

NO!!

[Onyerbike]

That depends... when profits are less than £40,000, income tax is actually lower than corporation tax.

Any truth in this? sole trader here I come

[Nixon Williams]

That depends... when profits are less than £40,000, income tax is actually lower than corporation tax.

Quite apart form the legal aspects any agency and company that knows what it is doing would avoid sole traders.

The correct answer will depend upon many variables, however if you were taking a low salary and the rest as dividends the company route would beat sole trader hands down.

Alan

[Sockpuppet]

Yes, but NI isnt if you take the money out in low salary / high divs.

[poopscoop]

Most companies/agencies will not deal with sole traders as they can be left with your tax bill. You should pay less tax overall with a Ltd company than as a sole trader.

That depends... when profits are less than £40,000, income tax is actually lower than corporation tax.

[Waldorf]

yes I could do it that way. With this amount it's probably better doing it as a sole trader. But the company I'm dealing with likes to deal with a Ltd company. Will I have to shell out on corp tax at 19% on the profit doing it by Ltd?

regards

Most companies/agencies will not deal with sole traders as they can be left with your tax bill. You should pay less tax overall with a Ltd company than as a sole trader.

[poopscoop]

If your intention is to only do the one short term contract then it is possible to simply declare the income on your tax return and pay the appropriate personal tax then.

Of course, it is advisable to engage an accountant if you are a little green at these things.

yes I could do it that way. With this amount it's probably better doing it as a sole trader. But the company I'm dealing with likes to deal with a Ltd company. Will I have to shell out on corp tax at 19% on the profit doing it by Ltd?

regards

[OrangeHopper]

If your intention is to only do the one short term contract then it is possible to simply declare the income on your tax return and pay the appropriate personal tax then.

Of course, it is advisable to engage an accountant if you are a little green at these things.

[Waldorf]

I was thinking of setting up my limited company now, without an accountant. When my first contract finishes and if I do get a second contract then I will get an accountant.

Regards

I think this will be a false economy, get an accountant and avoid the hassle!

[Back In Business]

Even if you don't want to spend the profits you could take your taxable allowance and your expense claims out and place them into something more profitable than your banking account.

[poopscoop]

I was thinking of setting up my limited company now, without an accountant. When my first contract finishes and if I do get a second contract then I will get an accountant.

I'm thinking of doing it this way as I am retaining profits and not taking anything out.

Regards

[cojak]

Having too much money in company accounts can lead to problems as the IR may want to re-categorise your company as a Financial Services company and tax you differently.

Or something like that.

Get yerself an accountant, basically.

[Waldorf]

I would suggest that you get one from day one, the setup can be important and if that is wrong it can be expensive to put right.

For the sake of a few quid each month is it really worth the hassle of trying to do something we do not really understand?

I have never regretted having one (Nixon's) they save time and money