Setting up a Company
27 January 2012, 10:37 AM
#1
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Setting up a Company
Hello
Can anyone recommend a website to do this?
I used one a couple of years ago (£29.99 I think for an LTD.) but they appear to not exist anymore....
Thanks for your help,
Steve
Can anyone recommend a website to do this?
I used one a couple of years ago (£29.99 I think for an LTD.) but they appear to not exist anymore....
Thanks for your help,
Steve
27 January 2012, 12:51 PM
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27 January 2012, 09:38 PM
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Limited liability if you are LTD.
I.e. you are not personally liable should a firm go bust. UNLESS you have signed personal guarantees or acted in the eyes of the law unlawfully.
Chop
Ps - never sign a personal guarnatee unless you have the money to lose.
27 January 2012, 09:45 PM
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The idea of not being personally liable has been significantly diluted, particular if you are a director, or have executive authority.
As a director they will come after your assets, and may hold you liable in case of any form of default.
As a director they will come after your assets, and may hold you liable in case of any form of default.
27 January 2012, 09:55 PM
#6
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There are far more many benefits than just the limited liability.
A ltd company will pay 20% tax on its profit. If you don't need that money to live off (ie have another source of income) then you leave the money in the company acct and there is no further tax to pay. This money can be invested in most things including property.
When you wind the company down you get 'entrepreneurs capital gains tax relief'. This means that up to (iirc) £1.5 million worth of assets can be liquidated with about another 10% to pay. So in total you have paid 30% tax.
If you would have been a 50% tax payer there is an obvious saving. Not only that but all those years you had 80% of your profit to invest rather than 50%.
A ltd company will pay 20% tax on its profit. If you don't need that money to live off (ie have another source of income) then you leave the money in the company acct and there is no further tax to pay. This money can be invested in most things including property.
When you wind the company down you get 'entrepreneurs capital gains tax relief'. This means that up to (iirc) £1.5 million worth of assets can be liquidated with about another 10% to pay. So in total you have paid 30% tax.
If you would have been a 50% tax payer there is an obvious saving. Not only that but all those years you had 80% of your profit to invest rather than 50%.
27 January 2012, 09:55 PM
#7
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There are far more many benefits than just the limited liability.
A ltd company will pay 20% tax on its profit. If you don't need that money to live off (ie have another source of income) then you leave the money in the company acct and there is no further tax to pay. This money can be invested in most things including property.
When you wind the company down you get 'entrepreneurs capital gains tax relief'. This means that up to (iirc) £1.5 million worth of assets can be liquidated with about another 10% to pay. So in total you have paid 30% tax.
If you would have been a 50% tax payer there is an obvious saving. Not only that but all those years you had 80% of your profit to invest rather than 50%.
A ltd company will pay 20% tax on its profit. If you don't need that money to live off (ie have another source of income) then you leave the money in the company acct and there is no further tax to pay. This money can be invested in most things including property.
When you wind the company down you get 'entrepreneurs capital gains tax relief'. This means that up to (iirc) £1.5 million worth of assets can be liquidated with about another 10% to pay. So in total you have paid 30% tax.
If you would have been a 50% tax payer there is an obvious saving. Not only that but all those years you had 80% of your profit to invest rather than 50%.
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27 January 2012, 10:06 PM
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And don't forget you'll need liability insurance, I just had to take out £20m of ins which cost me a couple of grand so it's not cheap though it does depend what business you are in I guess.
Chip
Chip
27 January 2012, 10:28 PM
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Don't bother, you will just be taxed out of existence by the government and the bank will foreclose on you if you have any sort of loan or overdraftj ust as soon as it needs cash to pay its boss a large bonus!
27 January 2012, 10:44 PM
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The company will not earn enough to really make it worth-while, however as it deals with health I want the liability to be limited even though my wife has indemnity insurance.
27 January 2012, 10:59 PM
#13
That doesn't make much sense..indemnity insurance is basically unlimited, and if you are an NHS employee the taxpayer picks up the tab.
So you mean if your wife carries out negligent treatment (Lord Denning 1992) you want to walk away and say it was the fault of a company who has no liability....
If you are trying to obfuscate your responsibilities then the regulatory authority (GDC / GMC / NMWC etc) to which you are tied will be well pi$$ed off !!
Shaun
So you mean if your wife carries out negligent treatment (Lord Denning 1992) you want to walk away and say it was the fault of a company who has no liability....
If you are trying to obfuscate your responsibilities then the regulatory authority (GDC / GMC / NMWC etc) to which you are tied will be well pi$$ed off !!
Shaun
28 January 2012, 04:48 AM
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Do it yourself. Companies house will provide the forms you need for free and advice (leaflets) - all you need to pay for is the stat dec (solicitor/magistrate £5) and the fee (was £20).
28 January 2012, 07:07 AM
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28 January 2012, 07:33 AM
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There are far more many benefits than just the limited liability.
A ltd company will pay 20% tax on its profit. If you don't need that money to live off (ie have another source of income) then you leave the money in the company acct and there is no further tax to pay. This money can be invested in most things including property.
When you wind the company down you get 'entrepreneurs capital gains tax relief'. This means that up to (iirc) £1.5 million worth of assets can be liquidated with about another 10% to pay. So in total you have paid 30% tax.
If you would have been a 50% tax payer there is an obvious saving. Not only that but all those years you had 80% of your profit to invest rather than 50%.
A ltd company will pay 20% tax on its profit. If you don't need that money to live off (ie have another source of income) then you leave the money in the company acct and there is no further tax to pay. This money can be invested in most things including property.
When you wind the company down you get 'entrepreneurs capital gains tax relief'. This means that up to (iirc) £1.5 million worth of assets can be liquidated with about another 10% to pay. So in total you have paid 30% tax.
If you would have been a 50% tax payer there is an obvious saving. Not only that but all those years you had 80% of your profit to invest rather than 50%.
I hope you can tell me I'm wrong as I have to submit my accountants shortly and I will be expecting to pay the usual 20% Corp Tax on the profits.
Chop
28 January 2012, 07:41 AM
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Indeed - Ding has omitted to mention that when money is realised from the business by way of dividend that will also be taxed - albeit at a better nominal rate than via a salary.
28 January 2012, 09:46 AM
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That doesn't make much sense..indemnity insurance is basically unlimited, and if you are an NHS employee the taxpayer picks up the tab.
So you mean if your wife carries out negligent treatment (Lord Denning 1992) you want to walk away and say it was the fault of a company who has no liability....
If you are trying to obfuscate your responsibilities then the regulatory authority (GDC / GMC / NMWC etc) to which you are tied will be well pi$$ed off !!
Shaun
So you mean if your wife carries out negligent treatment (Lord Denning 1992) you want to walk away and say it was the fault of a company who has no liability....
If you are trying to obfuscate your responsibilities then the regulatory authority (GDC / GMC / NMWC etc) to which you are tied will be well pi$$ed off !!
Shaun
28 January 2012, 10:06 AM
#21
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I hope I haven't got it wrong but this is only my first/second year as a ltd company. This is my understanding, and the potential advantages may not be possible for everybody.
Let's say Dingdongler Ltd makes £10,000/year profit. Corporation tax is due at 20%, this leaves £8,000/year
Dingdongler Ltd trades for 10 years and during that time NO money is taken as dividends. As I said this may not suit everybody as the company may be the sole source of income.
The money in the company acct can't be 'spent' but can be invested ie stocks, bonds and property. Advantage number one is that rather than having £6000/year to invest (assuming a rough 40% tax) you have £8000.
Anyway, after 10 years the company is closed down. As the law stands (and of course this could change) you get something called entrepeneurs tax relief (up to a maximum of iirc £1.5million) This means that the £80,000 (+ any profit from investing that) is now taxed at 10%
So in reality you have paid £28,000 in total on your income of £100000 over 10 years ie 28%.
Of course you can't dissolve the company every year and open a new one to get the money, that would make hmrc very unhappy and would be tax evasion.
This is the reason I became a Ltd company, but then the company isn't my sole source of income so it may not suit everybody. The law could of course change at any time.
I'm no expert so please put me straight if I've got any of this wrong
Let's say Dingdongler Ltd makes £10,000/year profit. Corporation tax is due at 20%, this leaves £8,000/year
Dingdongler Ltd trades for 10 years and during that time NO money is taken as dividends. As I said this may not suit everybody as the company may be the sole source of income.
The money in the company acct can't be 'spent' but can be invested ie stocks, bonds and property. Advantage number one is that rather than having £6000/year to invest (assuming a rough 40% tax) you have £8000.
Anyway, after 10 years the company is closed down. As the law stands (and of course this could change) you get something called entrepeneurs tax relief (up to a maximum of iirc £1.5million) This means that the £80,000 (+ any profit from investing that) is now taxed at 10%
So in reality you have paid £28,000 in total on your income of £100000 over 10 years ie 28%.
Of course you can't dissolve the company every year and open a new one to get the money, that would make hmrc very unhappy and would be tax evasion.
This is the reason I became a Ltd company, but then the company isn't my sole source of income so it may not suit everybody. The law could of course change at any time.
I'm no expert so please put me straight if I've got any of this wrong
28 January 2012, 12:00 PM
#22
See post 20. Just to re-cap then.
You want to set up a company, lets call it SFS Limited (Marx Brothers) and have your wife employed by that company. Lets say the assets of SFS Ltd are 50 pence.
So that if your wife is successfully sued then the patient gets 50 pence.
A medical litigation solicitor would have a field day with that one.
Shaun
You want to set up a company, lets call it SFS Limited (Marx Brothers) and have your wife employed by that company. Lets say the assets of SFS Ltd are 50 pence.
So that if your wife is successfully sued then the patient gets 50 pence.
A medical litigation solicitor would have a field day with that one.
Shaun
28 January 2012, 12:22 PM
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Why not just ask an accountant for advice, I pay mine £30+VAT a month which includes 4 tax returns and of course this is tax deductable anyway.
A good accountant will earn you more than you will ever pay.
Chip
A good accountant will earn you more than you will ever pay.
Chip
28 January 2012, 12:26 PM
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See post 20. Just to re-cap then.
You want to set up a company, lets call it SFS Limited (Marx Brothers) and have your wife employed by that company. Lets say the assets of SFS Ltd are 50 pence.
So that if your wife is successfully sued then the patient gets 50 pence.
A medical litigation solicitor would have a field day with that one.
Shaun
You want to set up a company, lets call it SFS Limited (Marx Brothers) and have your wife employed by that company. Lets say the assets of SFS Ltd are 50 pence.
So that if your wife is successfully sued then the patient gets 50 pence.
A medical litigation solicitor would have a field day with that one.
Shaun
But it stops someone suing and taking the house if my wife is a sole trader. I'm not sure why that is such a problem?
28 January 2012, 12:31 PM
#25
It would be difficult for a limited company to be vicariously liable for the negligent actions of your wife.
Protection against being sued is best covered by indemnity insurance rather than by sidestepping the issue by setting up what would be in effect a "fake" company.
Shaun
Protection against being sued is best covered by indemnity insurance rather than by sidestepping the issue by setting up what would be in effect a "fake" company.
Shaun
28 January 2012, 12:41 PM
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I hope I haven't got it wrong but this is only my first/second year as a ltd company. This is my understanding, and the potential advantages may not be possible for everybody.
Let's say Dingdongler Ltd makes £10,000/year profit. Corporation tax is due at 20%, this leaves £8,000/year
Dingdongler Ltd trades for 10 years and during that time NO money is taken as dividends. As I said this may not suit everybody as the company may be the sole source of income.
The money in the company acct can't be 'spent' but can be invested ie stocks, bonds and property. Advantage number one is that rather than having £6000/year to invest (assuming a rough 40% tax) you have £8000.
Anyway, after 10 years the company is closed down. As the law stands (and of course this could change) you get something called entrepeneurs tax relief (up to a maximum of iirc £1.5million) This means that the £80,000 (+ any profit from investing that) is now taxed at 10%
So in reality you have paid £28,000 in total on your income of £100000 over 10 years ie 28%.
Of course you can't dissolve the company every year and open a new one to get the money, that would make hmrc very unhappy and would be tax evasion.
This is the reason I became a Ltd company, but then the company isn't my sole source of income so it may not suit everybody. The law could of course change at any time.
I'm no expert so please put me straight if I've got any of this wrong
Let's say Dingdongler Ltd makes £10,000/year profit. Corporation tax is due at 20%, this leaves £8,000/year
Dingdongler Ltd trades for 10 years and during that time NO money is taken as dividends. As I said this may not suit everybody as the company may be the sole source of income.
The money in the company acct can't be 'spent' but can be invested ie stocks, bonds and property. Advantage number one is that rather than having £6000/year to invest (assuming a rough 40% tax) you have £8000.
Anyway, after 10 years the company is closed down. As the law stands (and of course this could change) you get something called entrepeneurs tax relief (up to a maximum of iirc £1.5million) This means that the £80,000 (+ any profit from investing that) is now taxed at 10%
So in reality you have paid £28,000 in total on your income of £100000 over 10 years ie 28%.
Of course you can't dissolve the company every year and open a new one to get the money, that would make hmrc very unhappy and would be tax evasion.
This is the reason I became a Ltd company, but then the company isn't my sole source of income so it may not suit everybody. The law could of course change at any time.
I'm no expert so please put me straight if I've got any of this wrong
To give you a rough guide I pay approx 20% tax on my personal wages from my limited company. I would be classed a higher rate tax payer if employed.
A good accountant can advise on many ways of minimising your personal tax liability, one of the ways i do this is by taking my max non taxed as a wage about 7k iirc, then the rest us by way if dividend and other legal loopholes. Iirc on dividends you dont pay NI and it is at a fixed tax rate, I think 10%.
When I first became a director and shareholder and not an employee I first said that I have never paid so little tax, that is true personally but if you factor in what the business pays in corp tax it is quite shocking
The only bill I enjoy paying is my accountant as I appreciate how much money they save me and the business.
Chop
28 January 2012, 12:59 PM
#27
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Dont take this the wrong way Ding but if you are trading as a LTD company you need to seek some advice from a good accountant as your thinking is a little simplistic on the matter.
To give you a rough guide I pay approx 20% tax on my personal wages from my limited company. I would be classed a higher rate tax payer if employed.
A good accountant can advise on many ways of minimising your personal tax liability, one of the ways i do this is by taking my max non taxed as a wage about 7k iirc, then the rest us by way if dividend and other legal loopholes. Iirc on dividends you dont pay NI and it is at a fixed tax rate, I think 10%.
When I first became a director and shareholder and not an employee I first said that I have never paid so little tax, that is true personally but if you factor in what the business pays in corp tax it is quite shocking
The only bill I enjoy paying is my accountant as I appreciate how much money they save me and the business.
Chop
To give you a rough guide I pay approx 20% tax on my personal wages from my limited company. I would be classed a higher rate tax payer if employed.
A good accountant can advise on many ways of minimising your personal tax liability, one of the ways i do this is by taking my max non taxed as a wage about 7k iirc, then the rest us by way if dividend and other legal loopholes. Iirc on dividends you dont pay NI and it is at a fixed tax rate, I think 10%.
When I first became a director and shareholder and not an employee I first said that I have never paid so little tax, that is true personally but if you factor in what the business pays in corp tax it is quite shocking
The only bill I enjoy paying is my accountant as I appreciate how much money they save me and the business.
Chop
Hi Chop
I did all this with advice from what I hope is a good accountant. I won't take it the wrong way but please tell me what I am being simplistic about. If I'm making a major mistake I need to know.
Our circumstances might be different though. The ltd company is one source of income, my other source already has me in the higher tax bracket. My understanding therefore is that if I take any significant amount out of the company profits it will be at the higher rates of taxation.
I don't mind leaving it all in the company as it gives me discipline not to go out and spend it!
Thanks
28 January 2012, 01:30 PM
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It would be difficult for a limited company to be vicariously liable for the negligent actions of your wife.
Protection against being sued is best covered by indemnity insurance rather than by sidestepping the issue by setting up what would be in effect a "fake" company.
Shaun
Protection against being sued is best covered by indemnity insurance rather than by sidestepping the issue by setting up what would be in effect a "fake" company.
Shaun
Plus considering what Bowen is I don't really know how there could be a claim really but people are strange and I just wanted to make sure.
Thanks for all the advice.
28 January 2012, 01:39 PM
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Hi Chop
I did all this with advice from what I hope is a good accountant. I won't take it the wrong way but please tell me what I am being simplistic about. If I'm making a major mistake I need to know.
Our circumstances might be different though. The ltd company is one source of income, my other source already has me in the higher tax bracket. My understanding therefore is that if I take any significant amount out of the company profits it will be at the higher rates of taxation.
I don't mind leaving it all in the company as it gives me discipline not to go out and spend it!
Thanks
I did all this with advice from what I hope is a good accountant. I won't take it the wrong way but please tell me what I am being simplistic about. If I'm making a major mistake I need to know.
Our circumstances might be different though. The ltd company is one source of income, my other source already has me in the higher tax bracket. My understanding therefore is that if I take any significant amount out of the company profits it will be at the higher rates of taxation.
I don't mind leaving it all in the company as it gives me discipline not to go out and spend it!
Thanks
We are in a slightly different position as my business is my only source of income.
Simplistic perhaps wasnt the right word but from your post it read as you were prusming that because the income from the LTD company was in the 40% tax bracket then that is what tax you pay. However one of the benefits of being a shareholder in a ltd company is there are legal loopholes on how you extract the money without paying personal tax at 40%.
i would seek other advice, im no expert i just know what tax I pay.
However if you have not heard the word dividend mentioned by your accountant then I would be concerned at the quality of the advice you are getting. Its the oldest way of getting money out at a lower tax rate.
Chop
28 January 2012, 01:41 PM
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IMHO if you are going in to business you would have to have a screw loose not going Ltd!