I'm Back!

[James]

Hi Guys

I've been away from the forums for quite a while now as I've been knuckling down with my company.. and its paid off!

My business has now turned limited which is fantastic.

I wont be posting too much on here but feel free to PM me if you have any questions or queries, I'm always happy to help!

James.

James Perkins Cleaning Ltd.

 

[Belfastcleaning]

Well done James! And welcome back..

LTD looks good after your company name, but what benefits does it have?

 

[shazzy692002]

Well done James! And welcome back..

LTD looks good after your company name, but what benefits does it have?

Your only taxed on what you pay yourself and staff, . I also know very little about being LTD.

 

[James]

Ltd has a few perks, i.e. There is no distinction between business money and personal money for anyone self employed as all business debts are the personal responsibility of the sole trader. The private limited company advantages are that the company is a separate corporate body and liability for payment of debts stops with the pvt ltd company, the owners, shareholders are not personally liable. The directors are only liable if they continue to trade and incur liabilities after it becomes apparent the ltd company is insolvent.

Other things to take into consideration are:

Because a director is also officially an employee of the pvt ltd company this gives rise to a number of considerations in determining the extent of a private limited company advantages.

Pension contributions of a sole trader are personal and while may be deducted from the personal income liability do not form part of the basic accounts. The pension costs including any company contribution to a pension scheme by a private limited company is a deductible business expense as an employee cost.

Using a car for business purposes may have an impact. The sole trader basic accounts would include the business proportion of the vehicle running costs or the mileage allowance. If that vehicle is used by a director then that director is receiving a taxable benefit potentially resulting in a higher tax burden depending upon the type of vehicle as taxable benefits vary. An alternative may be to leave the company vehicle privately owned and the director claim mileage allowances rather than vehicle running costs.

Potentially small issues but there differences in the accounting treatment of deductible expenses such as charitable donations, entertaining expenses and use of home as office. A private limited company advantages consist of being able to claim such expenses as valid business expenses which would not be claimable in the sole trader basic accounts as treated as personal not business.

If the director and main shareholder have other associated companies then the corporation basic tax rate could be affected.

Also a set of Sole trader basic accounts can be a simple formal accounting system. This is not required and can be reduced to simple lists of income and expenditure supported by documentary evidence of sales and purchase invoices, effectively single entry bookkeeping. Producing a balance sheet is optional. Due to the simplicity then an accountant may not be required saving a significant cost.

Ltd company accounts have to use double entry bookkeeping to produce the year end accounts including a balance sheet with statutory notes and statements. Unless accounting software is employed to produce the company accounts in this format then accounting knowledge is required and an accountants fee may well be in the region of £500 to £1,000. An accountant is not essential for a small pvt ltd company but is the normal approach and offsets some of the tax advantages.

Apologies for rambling on

James.

James Perkins Cleaning Ltd

 

[adyspurs]

Very helpful James,thank you.

 

[Posh]

Welcome back JP. Glad alls going well.

 

[M.K Cleaners.co.uk]

If your sole trader you can still claim house as office... you can also claim a small portion of rent/mortages and council tax /emoticons/wink.png

 

[James]

Welcome back JP. Glad alls going well.

Cheers Posh /emoticons/smile.png

 

[messimagician]

What's the percentage you can claim back on mortgages, council tax, electricity ect?

 

[M.K Cleaners.co.uk]

What's the percentage you can claim back on mortgages, council tax, electricity ect?

You would need to get an accountant to work that out for you. Its only a small percentage I know that.

 

[messimagician]

I was hoping you could do it without one, it seems a lot of people don't use accountants on here unless they just keep it simple and not bother claiming things such as this back