Are you a Limited Company or sole trader? Why?

[nrv0us]

Pretty much what the header says, really.

I'm limited because my Accountant told me to - I should probably know why though

sole trader - less paperwork

Limited because it made hiring subbies easier and my turnover hit the level that the tax differential was well worth it

I like the idea of being in a partnership. I notice it annoys the press as they can't get their hands on Companies house information.

in the way the Middleton Family have done you mean

Yes, drink es the press and nosey Feckers crazy.

Drives *

Sole trader. Less paperwork and income isn't high enough to bother with ltd company.

Sole trader because I'm so small

What are the disadvantages of going Ltd Company too soon? A friend has recommended it as it enables you to pay yourself a minimum wage salary and then take the rest in dividend payments from the company's earnings, as a way of paying less tax. Is this a valid way of doing things, or does it only make sense if you are earning above a certain amount?

Sole trader as I've only just started up, plus as a bookkeeping firm I don't want to seem unreachable to anyone... I think if I were LTD then potential clients may make the assumption that it's a larger firm of accountants who may charge more.

Sole trader makes it seem more personable :-)

Ltd. On advice of my accountant.

Sole trader for 3/4 years, then changed to ltd company a year ago as hit VAT threshold, employed an accountant and change to ltd company was their advice.

It makes more sense if you're earning a decent amount as you have to produce payslips and tax vouchers for dividends if you're ltd which is accountant stuff. And of course you have to pay your accountant.

It depends what kind of work you do too. My clients are corporate and they like me to be ltd. Plus I occasionally do contract work and ownership status means you're not going to get HMRC thinking your employer is trying to get out of employer obligations.

My husband was a 'Sole Trade' for years until he changed accountants and was advised to set up a limited company and become an employee of that company. The result is he pays far less tax and the bottom line is he's much better off as a result. Hope that helps.

Those of you that are Ltd, do you pay a monthly fee to an accountant to sort out all of your paperwork and returns? If so how much do you pay? I'm looking to go Limited and have been quoted £135 per month. Many thanks

Just hubby and me. Annual t/o yr1 £45k, yr2 projected £80k-£90k.

We're ltd because of the tax benefits of being able to take out min salary, then the rest as dividends. Just as you said, OP. I think the only disadvantage is if you're not going to earn very much.

Puffle, we pay an accountancy firm £1250 (incl vat) annually for our corporate tax return and our companies house stuff. It's a one-off annual job. We keep track of our spending and invoicing on FreeAgent which is brilliant.

DH is limited company. Pays accountants £100/month for everything.

An acquaintance is sole trader and I've never understood why - he earns loads but I don't think he has any interest in doing it above board sadly....

And what's a partnership?? Why can't I look up the middletons on companycheck?! Seeing how much money celebs have in their ltd companies is my new favourite thing!! (Victoria Beckham and ELJames the biggest I've found so far)

Baby a partnership is two, or more, self-employed people, in partnership together as a business. The rules of trading and accounting and reporting are the same as a sole trader.

I am a sole trader and on paper it looks financial stupid, but in my industry it is much, much harder to get the credit line you need with wholesalers if you are not a partnership or sole trader.
The bonus is of course no one can search my accounts as they only need to be filed as a tax return.

On paper I'm a director of a LTD company, I don't earn a wage though so not entirely employed.
My dh is also a director and it is mainly his work that provides the income.
My work is voluntary until the company can afford to pay me.
This was also at the advice of our accountant and seems to be working fine.
My dh used to be a sole trader/ self employed.

morethan I believe (but not an expert, so worth checking out) that you can put a value to the work you carry out for the co. and put it on the books as a director's loan. So you are loaning the co. the salary you're not taking. The benefit is that at a later date, you can withdraw the money 'lent' to the co. tax free. Does that make sense?

More than surely you would be better off as a family for DH to earn less and utilise your tax free allowance. This being a main reason for both spouses being employed by a ltd company.

Limited company. Limited liability if anything goes wrong which protects the house etc plus there are tax advantages which far outweigh a small accountancy fee

Morethan, Lonecat is right. Unless your DH is already taking below his personal allowance, his salary could be split between the two of you. unless he's a control freak and just doesn't want you earning any money