simon76 started this topic @ 11:01 on 25/07/2005
Hi,
As you may have seen from previous posts I am considering changing from being a Sole Trader to a Ltd Company. Can anyone help me with the following couple of questions regarding this please ?
1) As mentioned I currently trade as a Sole Trader. If I register as a Ltd company this week do I start my books as a Ltd company from that day ? If so what happens to the records from April 1st until now when I was a Sole Trader ? How will it work when filling out my tax return ?
2) This year the Tax Return I completed was alot smaller & easier to complete due to the fact that I might be classed as a micro business I suppose. Im pretty sure that it mentioned something about not being suitable to be filled out if you are a company director. Can anyone advise if this is correct & if it is will I have to fill out a different tax return next year that is designed for Ltd companies rather than Sole Traders ?
Any advice on either question would be greatly appreciated. I dont want to revert to being a Ltd company if it means having a nightmare with things like tax returns and making sense of when company accounts start and finish.
Thanks,
Simon
Online Exhibits
RE: Limited Company Advice
James Smith | 25/07/2005 01:31 PM
Simon,
You really shouldn’t try to do this on your own. The transfer of trade from a sole trader to a limited company offers a number of opportunities and likewise a number of pitfalls to the unwary.
From you post you don’t appear to appreciate the legal differences in running a company. This is a completely separate legal entity and will not directly come into your self assessment, other than the dividends and salary you may receive. The basis of assessment to tax is somewhat different as are the requirements for record keeping and returns.
In answer to your specific point you chose when your company starts, and there are advantages and disadvantages in starting straight away, depending on what tax provisions you are utilising on incorporation. For the self assessment the period of assessment will run up to the date on which you transfer the trade.
For next year the "short form" tax return will not as you have identified be suitable, there is a longer personal tax return however it is very much a minor part of the returns required for a limited company.
I know I appear biased but this really is not something to attempt yourself, you should seek proper advice to cover the question of whether this is a suitable option for you and help you understand the implications in terms of costs and paperwork.
Regards,
------------------------
James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
RE: RE: Limited Company Advice
simon76 | 25/07/2005 03:17 PM
James,
In reference to your reply, your right I dont undertand the legal differencies, hence the reason I have made a posting on here asking for some advice. Secondly, you mention trying to do this on my own. Again, I have no intention of doing any of this on my own I am purely "testing the water" and asking for some opinions and some answers to some of the questions that I have. I am not naive enough to just start trading as a Ltd company straight away and am basically looking for a few answers to the questions I have in the early stages of my research in to this. Thanks very much for the replies you have given, they are very helpful in helping me make a decision on how I want my business to proceed.
All the best,
Simon
Online Exhibits
www.onlineexhibits.co.uk
RE: RE: Limited Company Advice
simon76 | 25/07/2005 03:56 PM
No need to apologise James, I know the questions maybe sounded a bit basic but I am only just exploring this option properly so my research is at a very early stage. I wont be rushing in to any decision regarding this.
All the best,
Simon
Online Exhibits
