Need to go VAT registered, stay as a sole trader or go LTD?

[nipersvest]

Help!

This is my husbands business, but I do all his admin. Currently, he's a sole trader, I'm also self employed and invoice him for work I do, we both do self assessment.

He needs to go VAT registered asap. Everyone we've spoken to is telling us to change the business to a LTD company, both of us take a salary plus dividends. We've seen an accountant, who will set all this up, but my question is, this all seems to add infinate layers of aditional admin, which we're going to have to pay an accountant to do, are the benefits of switching to a LTD company really worth it?

It seems to be much more straight forward to stay as a sole trader but press ahead with the VAT registration.

Have a look here

www.google.co.uk/amp/s/www.bytestart.co.uk/limited-company-advantages.html/amp

What did the accountant advise you to do regarding minimising your tax liability?

You need advice to work out whether the benefits of going Ltd outweigh the additional book-keeping costs .

There are so many pros and cons, no one can tell you without a proper review of the facts.

Obviously, profit levels are important, but other aspects which can impact are vehicles, amount of home use, even mobile phone contracts.

As tax rates are getting closer, it's more a matter of other aspects that determine benefits, such as use of your personal allowance, using your basic rate band, etc If his profits are over £50k and yours are under £12.5k, the tax benefits could be quite substantial. Also beneficial if he doesn't need to draw out all profits as leaving profits in a company is a kind of low tax shelter, especially when higher rate tax is in play.

Definitely. As an Ltd he won’t be personally sued if something goes wrong (with a few exceptional circumstances). Basically this means that your house/whatever assets you have won’t be at risk but they are at the moment. It is also much lore tax efficient (so you’ll most likely save money) and makes it easier to transfer ownership etc so, if his business has any value to it you’d be creating an asset which is great.

Do you work for other people as well and invoice them?

If you're at the point where you are required to VAT register, then I would personally incorporate.

Let the accountant work out the best way of working (both salaried from the company or just him and you remain self employed and so on) and deal with the vat returns etc.

It may seem daunting but as you sound on top of the admin, it will be easier than you think.

As a previous poster said, going Ltd will protect your personal assets if the business failed (unless you gave guarantees or did something naughty/bloody stupid that is). May sound pessimistic but if you are getting bigger clients you become more exposed to bad debt.

Well done BTW on getting to the point where you need to think about the next step.

You need to look at it carefully there is no one right answer my business turns over in excess of 1M with good levels of profit, but for a variety of reasons incorporation is not tight for us and we looked at it with our last set of accounts there was borderline financial benefits to incorporation.
It depends what you business is - ours means that if someone fucks up they are still personally liable so we have professional indemnity insurance for this.