So you’ve had your bright idea, you’ve done your research and you’re ready to take on the world with your new business venture. Congratulations!
How you decide to operate has an impact on your filing responsibilities and the types of taxes you pay. So, what are your options? There is no straightforward answer, so give us a call to assess your situation and advise accordingly. Here are some points to consider on each option:
Self-Employment
Simple – with a straightforward registration with HMRC, you are ready to go.
Independence – it is possible to complete your own accounts and independently file your tax return, although we would always recommend some input from a professional.
Tax - All in year profits are subject to Income Tax and Class 4 NIC.
Private – you are not required to publish any information about your business.
Risk – You are personally responsible for any debts and liabilities.
We can register you for Self-Assessment, assist you with opening a business bank account and provide an all-inclusive accounts package. Find out more here.
Limited
Control - Yourself and the Limited company are separate legal entities subject to different taxes. This way you have control over your personal income and the tax you pay.
Risk - As the name suggests, limited liability means company debts and creditors are owed by the company.
Structure - Potential to structure shareholdings with spouse to maximise household income.
Income - Directors typically draw income as salary and dividend income from company profits. Can benefit from tax advantages, especially if expected profits are over £50,000.
Costs - Start up costs are higher due to forming a limited company and there are additional filing responsibilities as yearly accounts are due to Companies House and HMRC.
We can advise on the structure and form your limited company for as little as £50. We also register you for the appropriate taxes and assist you with opening a company bank account. Find out more about our all-inclusive accounts packages here.
As you can see, there are pros and cons for each option – arrange a call or meeting with us now so we can help you choose the best option for you and your business.
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Equal Accountancy Ltd offers Accountancy and Bookkeeping services in Hemel Hempstead and surrounding areas across Herts, Beds and Bucks. We offer a range of services for Limited Companies, Self-Employed individuals and Landlords including Year End Accounts, Corporation Tax returns, Self-Assessment Tax returns, Payroll services, VAT returns, Bookkeeping and Company Secretarial. Get in touch today for a free, non-obligatory quote for your business needs.