Sole trader or Limited Company

[FlintVending]

Is a ltd Company the best way to go For Vending business?
My accountant seems to think I would be better off going limited based on my 2014 accounts.
He said I could have saved me roughly £1000 in tax for that year had I gone limited, but im not sure if this is the right thing to do?
I remember seeing a post on here stating several good reasons NOT to go ltd with a vending business, but I am damned if I can find it??
I made net profit of £24K for the year, anyone gone from sole trader to limited and regretted it?

Cheers

[PabloV8]

Hi Flint,

I asked the question last year and got mixed reviews. The reason I asked it was to gauge how the future might pan out should I build up a large round of about 200 which was always my objective and will be reached this summer.

Accountant thinks for me anyway to stay as I am and see what happens next year. But some really big operators on here with 300+ machines so I would guess they might be limited especially since some actually employ people as part of the business.

Well done on your operation, good going, hope someone posts with advice.

[FlintVending]

Hi Pablo
Thanks for your reply!
So it was you who started thread about being Limited, I cannot find that thread.
Seems like all threads from before Jan 2105 have been deleted??

Matt, can you shed any light on this please??

Thanks Nigel (flint vending)

[Coin Operated Group]

no all posts since 2009 still there, if you click on Pablo you may be able to view his posts.

Did you get my pm Nigel by the way,as I sent it a different way through the forum.

[FlintVending]

Yes received it Matt, appreciate your input!

[PGBrew]

Hi Nigel,

I went incorporated in 2013, I have no regrets. I am now an employee on £8,250 per year. there are advantages of being an employee, state pension, EU health card (not available to the self employed) etc. Employee & employer NI is about £70 no income tax is payable. The rest of your profit can be taken out subject to corporation tax which is less than income tax. Accountancy fees will go up because accounts have to be certified.

Pete

[Siting Services]

Thought I would add my tuppence worth for information.

This is a very common question and choosing the wrong option can prove costly.

Primarily, the advantage of forming a Ltd company is that should the worst happen and you accumulate debts and ultimately the business fails, you are personally protected as your personal liability is limited and your creditors only have a claim against the assets on the balance sheet of your company.

The second reason why you would choose to go "Ltd" is to reduce your personal tax liability. There is a specific point at which your income/profits would push you into higher taxation whereas if you were an employee of your ltd company you would have a salary which is taxed as per any employee and dividends which hopefully you would be able to pay yourself at given points throughout the year which would reduce your ultimate tax bill.

The downsides of a ltd company are primarily that you need to produce annual accounts of which an abridged version is publically available. The production of these accounts and other necessary "company" admin procedures will of course involve added expense which are much reduced for a sole trader who only need produce a very basic accounts document.

To assess if or when you should go corporate I would suggest you chat with your accountant.

On the subject of accountants, always remember this, a good accountant should always save you more money than they charge you!

Kind regards,

Barbara

[Snackmore]

Excellent post Barbara

[Snackmore]

Excellent post Barbara