Advice needed (1 Viewer)

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Hi everyone,
just joined the Scaffolders forum and need some advice please.
Has anyone ever changed from Sole trader to Limited company? If so, was it a good move? My company turnover has been getting bigger every year and I'm considering the move, will it benefit my company? Any advice would be greatly appreciated.
Pete
 
what seems to be the problem pal if its not broke don't fix it,just make sure your assets are protected pal theres not a lot of benefits to be had now apart from if you go tits up the receivers can take everything you own.
So in Hein site go ltd and always prepare for the worst scenario and if the shyzanhiezer its the fan set another ltd company up and transfer the assets just google up ltd c ompany or tell your accountant to get off his fat arse and explain it to you and get your moneys worth off him all the best scc
 
There is another level of tax in the form of corporation tax. A pain in the backside, but it does open more doors for creative accountancy on other aspects. I wouldn't run a scaffolding company under any other circumstances.
 
what seems to be the problem pal if its not broke don't fix it,just make sure your assets are protected pal theres not a lot of benefits to be had now apart from if you go tits up the receivers can take everything you own.
So in Hein site go ltd and always prepare for the worst scenario and if the shyzanhiezer its the fan set another ltd company up and transfer the assets just google up ltd c ompany or tell your accountant to get off his fat arse and explain it to you and get your moneys worth off him all the best scc

Thanks for the reply, accountant didn't offer much help regarding changing from sole trader to Ltd company. Can't make up my mind whether to expand or stay the same. Decision needed hence asking for advice.
 
make sure the accountant is able to undertake and submit the accounts - sometimes accounts must be submitted by charted accountants
 
OB is spot on wiv the chartered account statement - but other things to consider as well as the corporation @ 2% of gross is your audit costs & the higher accountantancy fees
To change from sole trader to ltd means an additional set of cestation accounts which as well as the cost will mean as you pay your tax in arrears you will have to bring last years & any current liabilities up to date so instead of a rebate this would normally mean a large bill. Also kiss good bye to the freedom to use your bank account & cashflow as you see fit( which can also see a limit to future funding or morgages) as technically you will work for your company instead of being the company.which would also mean additional cost to your PLI as you are now an employee- you would also need to employ at least on paper a company secretary.
This has 2 sides though because as an employee you could choose to pay yourself a minimum wage below the tax &NI threshold & so reduce your liabilities that way.& pay yourself top ip payments through your company directors dividend- but you try & get a morgage when your payslips tell a story of only earning £120 a week lol.
People are also under the misinterpretation that if anything went wrong you could fold & walk away from it all - thats not entirely true, both suppliers & hmrc are a lot more savie now & there have been several cases where although the company may have no funds or assests as a director you could still be personally responsible if you had for instance whilst setting up an account with a supplier signed as a guarantor (which many insist on) - you wouldnt be able to start another company for quite a few years as well.
some people prefer ltd others not both have their own pros & cons & have to be a personal choice but if your trying to lower your tax liabilities consider turning into a partnership with your wife if u have one you use her taxcode & split the liability but without actually paying her lol....personally my own feeling is if it aint broken dont try & fix it- to spend a lot of money to maybe save some may not always be the right thing to do- ive run as a partnership now for over 16 years & it works well for me.good luck in your choice & i hope this info helps
 
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Stay sole trader then at least no one can find out what you up to ha ha - unless u need reams of credit then go LTD
 
Excellent reply Southernpoofter, some of the things you brought up I hadn't even considered. I'll speak to my accountant about the pro's of a partnership as you suggested.

---------- Post added at 07:27 AM ---------- Previous post was at 07:26 AM ----------

Thanks for reply. everything taken on board.

---------- Post added at 07:32 AM ---------- Previous post was at 07:27 AM ----------

If we become a Limited company or partnership and everything goes tits up could they take our house? I've been told that as a Sole trader they could seize all our assets but could they do this if we were Ltd?
 
Sole trader vs Limited company

I've had some interesting and helpful replies to my query but I'd like to know if we did decide to become a Limited company and the firm went tits up could the taxman seize our house and other assets? Apparently they can while we remain Sole trader.
 
Due to your concerns in relation to the above queries no court in the land will make you homeless and if the tax taxman did come after you what can he take if you have made an agreement to pay him back absolutely nothing even if your financial circumstances change for the worst and you tell them look I can only pay this amount back per week and they say know you must pay the final demand .
This is bellocks tell them to take you to court and any judge will laugh at them for them refusing your repayment choice even if it only a tenner per week this as to be accepted because you are willing to the debt in question in a court a mans family comes first not the inland revenue.
If you are on top of your finances pal if its not broke don't fix it and if your in a secure relationship there is nothing to stop you having everything in your wifes name pal good luck.scc
 
Steelcitycowboy, thanks for your reply. I think I'm getting a better idea of what I should do thanks to all the advice in this forum. I'll be speaking to my accountant next week and hopefully he'll be able to guide me.
Thanks
Pete
 
Hendon, The Tax Man And The Vat Man Will Sell Your House, Put It In Your Wifes Or Childs Name (Has To Be There For Five Year Minimum) But Never Ever Rely On Any Court Not To Make You Homeless. Speak To Your Accountant, They Dont Put Up Scaffolds So I Dont Give Financial Advice, But I Know Scaffolders That Have Went From Sole Trader To Ltd Company And Lost The Lot,(House Included.
 
Like i said it depends on how much you owe & to whom also if you've guaranteed against your status as a director...dont 4 get though as a nrw ltd company you'll av no credit rating & so will av 2 build that up all over again & so suppliers such as Gens may well insist you indemnify against any potential financial loss to them.
 
Sorry ssc but i totally disagree with you - in my experiance whilst that tact may work with a normal creditor it will not with hmrc. I'm afraid their attitude is they want what's there's and they want it now - reguardless of making you homeless.its always your responsibility to make sure you tax & NI liabilities are met...in their eyes theres no mitigation for non payment.
Also remember that any liabilities you may have had as a sole trader b4 going ltd remain- just because you suddenly turn ltd doesnt mean you dont now owe them. Any stock, vechiles & general assets would have also to be transferd over to the new ltd company & as such vat may well be liable on this transaction.
 
Get your accountant to complete the incorporation papers with companies house. What ever you do, do not mess with the vat man.
 
Sorry, a bit late to the party - been away and surprised someone else hasn't been along to advise on tax matters ;).

Anyway, I can't believe your accountant is not giving you any real best advice! I think you'd be better off finding an accountant that can help you make the right decision.

It's true that there are better tax breaks as a Ltd company and you would be an employee but family members might be in a position to help out with being employed by the company too. (as stated above).

Find an accountant that specialises in your industry and knows about VAT - if your turnover is £81k in a 12 month period. There is also the flat rate schemes to consider, which is why you need someone well versed in it. (A personal mate of mine got quite stitched up with this).

Here's a note of the VAT thresholds.

Good luck with your decision!
 
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