If you have been thinking about making the move from self-employed to limited to take advantage of all the benefits that come along with it, you are in the right place.
We are experts in helping people just like you get to grips with working through a limited company, and we have constructed this jargon-free guide to help you understand the process of moving from self employed to limited. Don’t worry; our expert accountants can get your limited company set up within 24 hours. Call our friendly accountants on 020 7481 4743 to find out more about our fixed fee package, from just £55 per month.
In the following paragraphs we will cover:
One of the key advantages of being a self-employed sole trader is that it’s extremely simple. You can register as self-employed on the HMRC website in a matter of minutes and once you do that you just need to submit a self assessment tax return once a year to notify them of your earnings.
You have less administrative duties than if you were to work through a limited company and can ultimately spend more time on the day-to-day demands of being a contractor.
On the other hand, there are a few disadvantages to the life of a sole trader. Limited companies come with a wealth of tax planning opportunities, none of which are available to people who operate as a sole trader. Furthermore, as a limited company owner you can take home as much as 80% of your salary, so it is far more tax efficient way of working.
As we have already mentioned, you can take home as much as 80% of your income if you work through a limited company. As a result, it isn’t hard to see why limited companies are considered to be the most tax efficient way of trading.
Some companies choose to only deal with limited companies as it provides them with added confidence and security. If you are working within an industry where your clients are likely to take this point of view, it is well worth considering starting a limited company so that you don’t miss out on any potentially lucrative contracts.
Limited companies allow for greater tax planning opportunities, which is ideal if your income is likely to fluctuate from one year to the next. Our qualified accountants will be able to work with you and carry out some tax planning tasks to ensure that you are constantly working tax efficiently and never need to pay more than you need to.
If you choose to work through a limited company you’ll have some extra paperwork and administration duties, but these shouldn’t amount to more than 20 minutes each month. You’ll need to submit company accounts and VAT returns in addition to a self-assessment tax return, so there are a few extra things to keep on top of – but a good accountant will be able to manage all of this for you.
Your accountant will be able to advise you as to whether or not now is the right time for you to consider moving from self-employed to limited, but we have outlined a few key points that you need to take into account before making a decision.
If the answer to the above questions, the time could be right for you to move from self-employed to limited. If you aren’t sure what you are doing, the team at Contractor Accountants Online can guide you through the process and have your limited company set-up within 24 hours. All we need to know are a few details like your name, address and what you want your limited company to be called.
To find out more about how we can help make the transition as smooth as possible, call our team on 020 7481 4743.
Now that we have covered making the move from self-employed to limited, you might also find the following resources of use: