# Limited company or sole trader



## P4ULT (Apr 6, 2007)

could anyone tell me the pros and cons for each. the business will be plumbing and heating

cheers


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## The Cueball (Feb 8, 2007)

http://www.ukbusinesslabs.co.uk/for...ntages-versus-sole-trader-basic-accounts.html

if it was me, unless you are going to get very big, i would stay a sole trader tbh...

:thumb:


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## toddy2 (Jul 21, 2009)

Take advice from an accountant, but I believe sole trader is better for tax purposes.


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## P4ULT (Apr 6, 2007)

i will be speaking to an accountant on friday.


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## P4ULT (Apr 6, 2007)

The Cueball said:


> http://www.ukbusinesslabs.co.uk/for...ntages-versus-sole-trader-basic-accounts.html
> 
> if it was me, unless you are going to get very big, i would stay a sole trader tbh...
> 
> :thumb:


why you say this if you dont mind me asking please?


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## The Cueball (Feb 8, 2007)

P4ULT said:


> i will be speaking to an accountant on friday.


make sure he doesn't charge you!

also try to understand what he is going to be charging you on a monthly or quarterly and yearly basis..... seen way too many trying to con people....

I would try and speak to at least 3 different ones...a good accountant should save you more than he costs....and not have to break the law to do so.


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## The Cueball (Feb 8, 2007)

P4ULT said:


> why you say this if you dont mind me asking please?


a ltd company for a small one man company is a bit of a waste of time.

also there is lots of legal work to be done, which you either have to do, taking time off your main focus, or pay someone to do it.

in days gone by, ltd meant limited liability, and due to this people ran up debts, shut the company down owing nothing, then started up the next day again... still goes on actually, they are called a phoenix company.

because of this, if you get large amounts of credit, you may be asked for a personal directors guarantee, which means you will be liable anyway....

:thumb:


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## DMH-01 (Mar 29, 2011)

I'm an accountant mate, feel free to PM me if you have any questions.


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## Mirror Finish Details (Aug 21, 2008)

If you go Ltd, then you are an employee/director and will pay tax on the PAYE scheme plus full national insurance. Then when you file your accounts you are liable for corporation tax on the profits.

Sole trader pays different NI, about £100 a quarter and then only pays tax on earnings plus extra NI based on profit.

Thats what an accountant told me so sole trader for me and a good accountant will save you a fortune.


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## P4ULT (Apr 6, 2007)

DMH-01 said:


> I'm an accountant mate, feel free to PM me if you have any questions.


cheers what would be your advice pm if you like


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## Method Man (Aug 28, 2009)

You'll need to weigh up the risks and rewards of being a sole trader.

Get some decent advice from a recommended accountant. I've been in the finance related profession for 21 years and I can count on one hand the number of half decent ones I've come across.

A good book-keeper is what you really need. Cheaper and probably more dedicated than an accountant. You then just give the year end or period end figures to the accountant for a 'sign off'. Keeps their time on it to a minimum. Try for a fixed fee agreement?

Your bank will just tell you what will be best for them - not you!

Think of the good things as well though such as what wording to put on your invoices, designing letterheads and business cards and, more importantly, building and keeping your client base.

Remember the saying

Turnover is vanity
Profit is sanity
*Cash flow is reality*


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## DMH-01 (Mar 29, 2011)

P4ULT said:


> cheers what would be your advice pm if you like


I'll send you some information over shortly detailing the differences etc.


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## P4ULT (Apr 6, 2007)

Method Man said:


> You'll need to weigh up the risks and rewards of being a sole trader.
> 
> Get some decent advice from a recommended accountant. I've been in the finance related profession for 21 years and I can count on one hand the number of half decent ones I've come across.
> 
> ...


intresting post. the bit about invoice wording is food for thought. problem is how do you tell a good accountant from a bad one


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## The Cueball (Feb 8, 2007)

P4ULT said:


> intresting post. the bit about invoice wording is food for thought. problem is how do you tell a good accountant from a bad one


it is a hard one, I have seen so many accountants that haven't got a clue how to run a business...

the reason I have suggested speaking to at least 3 is so that you can get a feel for them, but be warned, someone the ones that try and be nice are sometimes the weakest...

if they try and hit you with 'accounting' jargon etc, then I would leave them as well, they need to be able to explain things so that you will understand.

you just need to remember that they work for you, and even if they do their job wrong, it's your fault in the eyes of the law..... so it is quite a big deal....not something to rush into....

:thumb:


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