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Sole trader or ltd company?
I've read all the sites that say starting off as a sole trader is probably suitable in the first instance if you're becoming self-employed.
However, a web designer friend has become a ltd company because some clients require it for tax purposes. I've also heard that some businesses take you more seriously than if you remain as simply a sole trader.
Any advice? What's your personal experience?
However, a web designer friend has become a ltd company because some clients require it for tax purposes. I've also heard that some businesses take you more seriously than if you remain as simply a sole trader.
Any advice? What's your personal experience?
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playboy_bunnie
Messages count : 33Likes count : 0Registration : 23 December 2007I can't understand what difference it makes to firms that you work for; you are self-employed and therefore responsible for you're own tax and NI.
So I would assume it has nothing to do with tax purposes and should not stop you getting the same work as a sole trader. - Contact in PM
Ardesco
Messages count : 18Likes count : 0Registration : 8 January 2007I would presume it is to do with changes HMRC have made with regards to collecting unpaid tax. If you do not pay your tax HMRC can now go after the last registered company who paid you and get the tax out of them. With this in mind many companies may prefer to deal with a LTD company because that is the last link in the chain if you do not pay your taxes and HMRC will go after your LTD company rather than the client. - Contact in PM
timhoward
Messages count : 3Likes count : 0Registration : 19 November 2007well it's a more tax efficient option for your friend....He will claim a dividend through is Limited company which is not subject to NI contributions.