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Old 28-06-2012, 18:25   #1 (permalink)
dsgnr
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Limited company or sole trader?

Hi everyone, after a bit of advise as I am completely new to this sorta side of things. Here goes...

I work full time at a printers, I get paid via PAYE.

I have been doing websites on the site for a little while, just little jobs for friends/family but now it's coming to the point where I'm getting fairly regular work and I have monthly maintenance contracts about to start on these new jobs so I'll have a constant income every month.

I have been looking on the net about how to go registering as a business as I dont want to get done over by the tax man. I don't know whether to register as a sole trader or as a limited company. I don't expect to earn more than my day job but I still need to register and be taxed properly if I'm gonna be a good boy!

What are the benefits of being a sole trader over a limited company and visa versa. And how do I go about paying myself a wage and taxing myself etc.

Also, is it worth registering for VAT? I know you can claim things back on things bought through the company but is it necessary as I'm not gooing to be invoicing much!

How do I go about banking? Do I need to set up a new business account or can I just have transactions going into my personal account as it has been so far?

Would appreciate any advise as I don't want to get this wrong!

Hopefully this will help others in the same position! Thanks in advance
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Old 28-06-2012, 19:27   #2 (permalink)
moz
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Probably best to go sole trader to begin with, you can do your accounting yourself - limited companies need proper accounts from a registered accountant.

Sole trader - take a wage this month, don't take a wage this month - its up to you. Pay yourself 50 this week, pay yourself 1000 next week - again its up to you. It doesn't matter as long as you pay tax etc on your earnings.

Set up a business bank account - keep everything separate from your personal finances.

Go vat registered if you buy in a lot of print etc, if you're mainly selling websites then I wouldn't bother unless you go over the vat threshold.

I'd do that and if it takes off then maybe go limited - actually I did do that.
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Old 28-06-2012, 19:35   #3 (permalink)
dsgnr
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okay thanks Moz!

It's not going to be massive amounts but I don't want to get caught short and get HMRC knocking on the door. How would you go about doing taxing?

Are you able to tax each job as they come in or do PAYE each month/year?
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Old 28-06-2012, 19:43   #4 (permalink)
moz
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Just bill your jobs as normal, pay your bills as normal and register as a sole trader (let the taxman know - you need to register for Self Assessment and complete a tax return each year).

Check out these links:

Becoming a sole trader | Business Link

Wages Questions & Answers
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Old 28-06-2012, 20:23   #5 (permalink)
dsgnr
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okay thanks again!

thanks for the links too! however, there seems to be a number of different opinions on how to pay yourself which makes it a little confusing!
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Old 28-06-2012, 20:54   #6 (permalink)
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I completely forgot we started this in the mod forum a few weeks back

I've set it live now.
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Old 28-06-2012, 21:17   #7 (permalink)
moz
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Quote:
Originally Posted by dsgnr
okay thanks again!

thanks for the links too! however, there seems to be a number of different opinions on how to pay yourself which makes it a little confusing!

When I was a sole trader I just chose how much I wanted to take each month and as long as I could afford it from that months earnings (minus the tax I'd pay on it) I'd take it. Lean months I'd take less, goooood months I'd take my normal wage and keep the rest for the leaner times.
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