Self-employed, Sole Trader or Ltd?

[ASB]

yeah, have a search on MTM and TRM - oh and save like hell for the tax bill with interest in 6 years time

I guess I should have added the sarcasm smiley.

[scott_free]

Gosh, well I never. Absolutely foolproof, where do I sign.

yeah, have a search on MTM and TRM - oh and save like hell for the tax bill with interest in 6 years time

[DanTheMan]

If you're doing IT supporty type work, I would invest in PI insurance...

Yup, I had that as a member of PCG. Will look for a decent rate.

[ASB]

Call me biased because the company is run my a friend of mine(!) but you should seriously check out Aston Management www.astonml.com because you have no admin and they can reduce your tax liability. Lot's of people may say the government will close the tax loophole and maybe they will but in the meantime it's the best scheme going and one of the directors is a QC who works for HMRC so I think he knows what he's doing.

Gosh, well I never. Absolutely foolproof, where do I sign.

[peterlgreen]

Let Someone else do it

Call me biased because the company is run my a friend of mine(!) but you should seriously check out Aston Management www.astonml.com because you have no admin and they can reduce your tax liability. Lot's of people may say the government will close the tax loophole and maybe they will but in the meantime it's the best scheme going and one of the directors is a QC who works for HMRC so I think he knows what he's doing.

[DanTheMan]

A Ltd. isn't as big a deal as many will tell you. All I've spent on my plan B Ltd. is about £50 setting it all up. I'm going to have to do the end of year stuff soon, but with no salaries, assets or VAT, I don't see the need for paying an accountant.

My concern with a Ltd is that when plan B DOES start making money I'm going to have to get my arse in gear with organising it properly. When I was contracting as a Ltd I wasnt amazing at that and spanked a wad of cash on accountants, etc. My thinking is that a Sole Trader is purely easier to keep in check, considering the size of the operation.

[ratewhore]

If you're doing IT supporty type work, I would invest in PI insurance...

[ASB]

A Ltd. isn't as big a deal as many will tell you. All I've spent on my plan B Ltd. is about £50 setting it all up. I'm going to have to do the end of year stuff soon, but with no salaries, assets or VAT, I don't see the need for paying an accountant.

If you have no transactions you can do a "non trading" return which is less hassle.

[VectraMan]

A Ltd. isn't as big a deal as many will tell you. All I've spent on my plan B Ltd. is about £50 setting it all up. I'm going to have to do the end of year stuff soon, but with no salaries, assets or VAT, I don't see the need for paying an accountant.

[DanTheMan]

Cheers for the info. Tbh, I'm not looking at making any losses really. I'm not aiming to take on any really big projects. This would all be to bump up the monthly salary; small things like bunging in an email server, etc. Maybe it could lead to bigger and better work, but who knows.

Because of that reason I don't really dont want to go down the heavy fees route of having a Ltd co. Not sure if I'd be saving any profits long term or not. It would really depend on how much revenue came in. If it's just a few hundred a month then yeah, probably would just put that away. If I was getting more then I'd expect my spending habits to pick up.

I'm thinking Sole Trader is the way forward then.....

[Alan @ BroomeAffinity]

Do you pay extra income tax on income from a 2nd job? Or does HMRC have no interest how many jobs you get, just what the combined income is?

Just the combined income. Although you do get NIC exempt amount at each job.

[Alan @ BroomeAffinity]

Depends on the level of income and what you propose to do with it:

Eg: If you plan on saving the income for a rainy day, you may be best using a ltd co as you will only be taxed when the money is withdrawn (The company will be taxed on the profits regardless). You can either withdraw the funds as "income" at a convenient tax time and pay tax at the prevailing rate or you can take entrepreneur's relief and extract it as capital. Neither of these options is available as a sole trader. HOWEVER:

if the new enterprise is likely to lose money short term and you can generate a tax loss then the sole trader is the best option as the tax loss can be set against your other income thus reducing your tax liability.

Generally speaking, Ltd Co's are more expensive in fees so you'd need to weigh that up against any tax savings.

HTH

[d000hg]

Do you pay extra income tax on income from a 2nd job? Or does HMRC have no interest how many jobs you get, just what the combined income is?

[DanTheMan]

I used to have a Ltd company when I was contracting. But (and god have mercy on my sole) I've been a permy for the last yeat. I wrapped up my Ltd and think no more about it.

However, I wouldn't mind earning some pocket money. So what's the best and more importanly, most legal way of achieving this? I want to be able to offer IT solutions to businesses. Most of the work will be done in my own time. So do I register as Self-employed/sole trader (no fees, less paperwork) or register another Ltd (more paperwork/more professional?) ?

What are the comebacks considering I'm not planning on quitting my regular job. Yet.


Thanks