BS: Self employed v limited company

Subject: BS: Self employed v limited company
From: Bonzo3legs
Date: 29 Mar 11 - 09:48 AM

It's interesting that in a system set up by the Labour government in the late 1990s that in 2011/12, substantial tax and national insurance savings will continue to be made by a self employed person by forming a limited company.

Profit            saving
£10k               £ 299
£20k               £1,199
£30k               £2,099
£40k               £2,999
£50k               £4,257

This of course is before consideration to the cost of fulfilling obligations set by HMRC and Companies House to submit numerous returns.

Subject: RE: BS: Self employed v limited company
From: Will Fly
Date: 29 Mar 11 - 10:33 AM

Never having been in the position of needing to be a limited company, I was curious about the process. So... I found a commercial website that offers to set up your company in 3 hours for £14.99 - to discover the following options:

£14.99 package (ex-VAT): * Electronic Certificate of Incorporation. * Electronic Memorandum and Articles of Association. * Companies House filing fee.

£64.99 (ex-VAT): * 3x Official printed Certificates of Incorporation. * 3x Printed and bound copies of the Memorandum and Articles of Association. * Access to business training videos worth £124.99.

£89.99 (ex-VAT): * 3x Official printed Certificates of Incorporation. * 3x Printed and bound copies of the Memorandum and Articles of Association. * Access to business training videos worth £124.99. * Bound company register. * Official printed Shareholder Certificates. * First board meeting minutes. * Access to online Microsoft Office training worth £259.99.

Not exactly all Greek to me but - if you take off the bits about business training videos and MS Office training - are they worth anything? Or is a professional, personal one-to-one service the way to go?

Just curious!

Subject: RE: BS: Self employed v limited company
From: Bonzo3legs
Date: 29 Mar 11 - 11:03 AM

Wouldn't go near it!!

Subject: RE: BS: Self employed v limited company
From: Will Fly
Date: 29 Mar 11 - 11:29 AM

I thought so too! As I said, I'm not, and never have been, in any position to form a limited company - I just wondered how many people get suckered into signing up for this.

Some things are better done offline in the 'old-fashioned' ways...

Subject: RE: BS: Self employed v limited company
From: gnu
Date: 29 Mar 11 - 11:48 AM

Ayup... get a lawyer.

Subject: RE: BS: Self employed v limited company
From: gnu
Date: 29 Mar 11 - 11:53 AM

As for the books. I paid $650 for an accountant to do my books and financial notes the first year (1996) and I had to do all the compilation and number crunching. I quickly delevolped an Excel spreadsheet and never paid another dime. It was $650 well spent as I learned how to do it - especially what the taxman wanted to see.

Subject: RE: BS: Self employed v limited company
From: Brian May
Date: 29 Mar 11 - 01:08 PM

I'm a limited company but set it up via my accountant.

Cost a damn sight more than that, but it was worth doing properly. Overall, I paid about £350.

Subject: RE: BS: Self employed v limited company
From: gnu
Date: 29 Mar 11 - 02:18 PM

Oh, I paid even more than that to set up my company... the $650 was for the books AFTER the first year of ops.

Subject: RE: BS: Self employed v limited company
From: Q (Frank Staplin)
Date: 29 Mar 11 - 02:33 PM

When I went into consulting, setting up as a company cost a bit, but business expenses, inc. computer, work-involved transportation, office space at home, etc., became deductable (Computer and other hardware over a 4 year period).
This was in Canada, Alberta; I have no idea of costs and deductables in other areas.

Subject: RE: BS: Self employed v limited company
From: GUEST,MikeL2
Date: 29 Mar 11 - 02:49 PM

hi

My son has set up two Limited Companies. We used a lawyer and an accountant to do so.

My wife does the general accounts and our accountant takes care of the auditing etc.

It seems to be working well at the moment but business could be better....but it is early days yet.

cheers

MikeL2

Subject: RE: BS: Self employed v limited company
From: Bonzo3legs
Date: 29 Mar 11 - 03:45 PM

I just referring to the UK.

Subject: RE: BS: Self employed v limited company
From: gnu
Date: 29 Mar 11 - 04:11 PM

Q... same deal anywhere. The BIG thing is, charge a "reasonable" rent for the space. If you are "aggressive" in your accounting you can bet that a Revenue Canada auditor can, and will, use it against you.

My first audit was an experience. They sent a very attractive young lady who was dressed for a night out dining and dancing. She became progressively aggressive but I backed her up on everything she brought up. Then, I was called by a man from the Underground Economey Section who said my "case" had been turned over to him for "further investigation". I backed him up as well.

He took a load of my files back to his office. I got a letter saying everything was okay "for now" and received less than 50% of my files back. I requested the rest. He said they were all returned. I delivered the security video to him. I got the rest of the files by courier two days later... had to sign for them. Of course, I signed an illegible signature.

A video security system is a great investment. Get em at Costco much cheaper than having Revenue Canada screw you over. Or anybody else.

Subject: RE: BS: Self employed v limited company
From: Q (Frank Staplin)
Date: 29 Mar 11 - 05:38 PM

I was wise (afterthought) in having my returns prepared by a certified public accountant. Never a problem. Gnu, I have heard other horror stories about the 'revenuers'.

Digression on Canadian taxes- Once I found out that Canadian Tax Laws included 16 volumes of explanation, opinion and special cases (more now), none of that in the forms and explanation they send you, I have always had a certified accountant do the reporting for me.
The fee is deductable expense, even for individuals.
(certified is the wrong word in Canada, but it was the term for them that I was raised with- the right one will come to me as soon as I hit submit.)

Subject: RE: BS: Self employed v limited company
From: Richard Bridge
Date: 29 Mar 11 - 06:06 PM

So, lets get this straight, Bozo - you actually think that everyone, not just individuals, should pay more taxes?

Subject: RE: BS: Self employed v limited company
From: Bonzo3legs
Date: 30 Mar 11 - 07:58 AM

Presumably your voice went up at the end of that sentence Mr Bridge - just like the ipod generation!!!!!

Subject: RE: BS: Self employed v limited company
From: Richard Bridge
Date: 30 Mar 11 - 11:05 AM

Your point?

Subject: RE: BS: Self employed v limited company
From: Bonzo3legs
Date: 30 Mar 11 - 11:50 AM

Question or statement ?

Subject: RE: BS: Self employed v limited company
From: EBarnacle
Date: 30 Mar 11 - 01:46 PM

FWIW, Lady Hillary and I are setting up an LLC to administer our patent and pay our people.

Subject: RE: BS: Self employed v limited company
From: GUEST, Richard Bridge on the dark side's browser.
Date: 30 Mar 11 - 04:14 PM

Does the question mark give you a clue, Bozo?