Readers’ question: I’m looking into starting a small business and I’m still not sure what the main differences between a sole trader and limited company are with regards to tax implications. What is the more tax beneficial method of running a business?
limited company
Running and maintaining a successful business is incredibly hard work. It doesn’t matter how big or successful you are, a start-up, a big hitter or even if you are dominating the marketplace, things can go wrong at any time. The business plan just might not be right for the market or an unexpected cost could set back your cash flow.
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Many small business owners are reluctant to move banking providers, even if they can get a better deal elsewhere. The perceived ‘hassle’ associated with a switch is the main reason. However, since 2013, the major banks have all guaranteed to complete a business bank account switch within 7 days.
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Working with family means mixing business and personal life, which can be quite a difficult thing to get right. It has both its benefits and disadvantages, you just need to make sure that you are prepared for it. If you are considering hiring family or having family members as partners in your business, you need to consider how well you could work with them. Working with family can be great as well as challenging, you may bring the best out in each other or you could bring out the worst.
It is not a widely known fact, but company directors can receive statutory redundancy pay from their limited company under certain circumstances. If your company becomes insolvent and has to be liquidated, whether this happens on a voluntary basis or forcibly via a creditor’s winding-up petition, you may be eligible to make a claim.
Becoming ‘self-employed’ is the most popular means of starting up a new business. You can become self-employed through becoming a sole trader or forming a partnership. Sole traders make up over 60% of all UK businesses (3.4 million), and partnerships account for another 7% (414,000). Here we look at the basics of what is a sole trader and things you should consider before taking the leap.
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With over 1.8m limited companies operating in the UK today, compared to 3.3m sole traders, we look at the advantages afforded to business owners who decide to trade via their own limited companies.
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Once again, Contractors sat yesterday with baited breath to see how the secrets of Philip Hammond’s red box and the Autumn Budget 2017 would affect them. In his first Budget since the government lost their majority in the general election, it was good to hear the Chancellor affirm his commitment to small businesses, recognising them as the backbone of our economy and praising them for their “vibrancy and resilience”.
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Most company directors will be pleased to hear that they can legitimately claim for the costs of an annual party for employees and partners, as long as a number of conditions are met.
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A frequently asked question by company directors is which pre-company formation costs can be claimed back once the company has been incorporated?
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There are three main types of business structures to choose from for your business in the UK. They vary in terms of scale, liability and investors. It is also possible to start off with one structure and move to another one, for example a sole proprietorship can expand to a limited liability company. In this guide, you will be informed on the basics of all the business structures and the benefits and disadvantages of them all.
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Given that more start-up businesses fail than succeed, we have compiled a list of some of the most common mistakes made by business owners.
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As a limited company owner, what health-related costs (such as medical insurance, eye tests, gym memberships and private health checks) are allowable expenses for tax purposes against your company?
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One of the first things you need to consider before starting up is whether to register as a sole trader (or partnership), or set up a limited company. There are significant differences between the two types of business structure.
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A dormant limited company is simply one which is not trading. The company may never have traded before, or may have ceased trading for any number of reasons, without being shut down. Dormant company directors have a number of responsibilities to fulfil to comply with Companies House rules.
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Since the implementation of the Companies Act 2006, private limited companies are no longer legally obliged to appoint a company secretary, although they may still decide to do so.
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If you want to set up a new limited company, you will need to have various pieces of information to hand in order to complete the incorporation process.
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The start of a New Year is often the push aspiring business owners need to set up a new company. With the number of new company registrations typically higher in the first quarter of each year than any other, 2013 may set new records as the economy slowly crawls out of recession.
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Tax campaigners are calling on HMRC to clamp down on firms who force workers to incorporate, to avoid having to pay Employers’ National Insurance payments that would otherwise be due if the workers were paid via the PAYE system.
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When deciding between contracting via an umbrella or limited company, the main factors to consider are typically; the tax differences between the two structures, your IR35 status, and how much perceived ‘paperwork’ is involved. One service provider says that 50% of umbrella company contractors would be better off by incorporating.
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