Although the sole trader route, which is commonly referred to as being self employed, is the most popular way of running a business in the UK, there are significant advantages of operating as a limited company.
Here, we highlight 10 of the biggest benefits a limited company gives you over working as self-employed.
There are a variety of reasons why businesses or consultants may choose to operate via a limited company.
For some, the protection limited liability offers if things go wrong is an attraction, for others, the potential tax benefits are the main reason why they choose to be a limited company over a sole trader.
To explain more about the tax advantages of a limited company, we asked Manchester based accountants Alexander & Co to outline the tax-effective ways you can pay yourself if you own a limited company. (more…)
National Insurance is a deduction from earnings, set up originally to fund various State benefits such as the NHS, the State pension and other welfare-related schemes.
In reality, it is just another tax. In fact, as standard income tax rates have remained constant for many years, NI rates have soared.
In this guide we look at how National Insurance works, and what your National Insurance Contributions (NICs) will be as a small business owner. (more…)
Personal Liability Notices or PLNs first came into effect in April 2009.
Originally, PLNs were predominantly used by HMRC to tackle “phoenixism”, where the assets and the operations of an insolvent business that has run up significant tax debts are transferred to a new company operated by the same management team that has a history of non-payment of tax liabilities. However, HMRC’s use of PLNs is now increasing. (more…)
For those new to the world of business there are many things to consider. One of the biggest decisions you’ll have to make when you’re starting a business is whether to set up as a sole trader (self employed) or limited company.
Both sole traders and limited companies have their distinct advantages and disadvantages (make sure you read our guide on 10 Advantages of running your business as a limited company instead of being self-employed to learn the main benefits of the limited company option).
Whilst the professionalism and protection that comes with running a limited company is appealing to many, becoming self-employed is the more straightforward option, and with it comes a number of other benefits. (more…)
When you set up a limited company, your annual profits will be subject to Corporation Tax.
Dealing with your corporation tax issues is one of your accountant’s key tasks. However, it is ultimately the directors of a limited who are responsible for ensuring that a company’s tax affairs are in order. (more…)
One of the first, and most important decisions you make when you set up a new business is to decide what type of legal structure you should work under. So which business structure is best for you? (more…)
If you have set up in business via a limited company, there are a number of duties you will have – as well as legal and financial responsibilities – if you are a director of the company.
This article provides an overview of what to expect as a limited company director.
Making the decision to go it alone and leave the relative security of life as a PAYE employee is a big one, but it can pay dividends (quite literally) when it comes to your potential earning power.
If you’re thinking about whether becoming a contractor could be the right career move for you, we have put together this guide to cover the key things you need to know before you make the move.
If you want to become a contractor, the good news is that there are plenty of different roles available, with everything from IT specialists and engineers, to management consultants and even locum doctors engaged on this basis.
Since 6th April 2016, nearly all UK companies have been required to maintain a register of Persons with Significant Control (also known as a “PSC register”).
The PSC register obligations were introduced as part of the Small Business Enterprise and Employment Act 2015. The government’s intention was to enhance corporate transparency where complicated ownership structures can sometimes make it difficult to tell who owns and controls companies.
However, even small limited companies with very simple structures are required to maintain a PSC register. And, from 30th June 2016, companies need to file this information with Companies House as part of the new Confirmation Statement (which replaces the Annual Return from this date).
This guide explains to small business owners what a Person with Significant Control is, how to produce a PSC register and what companies need to do to stay on the right side of the law.
All UK limited companies, large and small, have been required to file an Annual Return (AR01) with Companies House at a set point each year.
From 30th June 2016, as part of the Small Business Enterprise and Employment Act 2015, the Annual Return is replaced with a new document called a ‘Confirmation Statement’.
Like its predecessor the Annual Return, the Confirmation Statement is a snapshot of information about a company which must be provided once per year. Most of the information provided is placed on the public record by Companies House.
Here’s everything that limited company directors need to know about the new Confirmation Statement; (more…)
From 6 April 2016, the way dividend income is taxed will change significantly. The changes will affect hundreds of thousands of small business owners, many of whom will see a big jump in the amount of tax they will have to pay.
At present, company dividends are treated as ‘tax paid’ in the hands of shareholders. However, from April 2016 the tax treatment of dividends will be altered dramatically, and as you can imagine, this isn’t going to result in limited company directors paying less tax! (more…)
Every limited company must submit their accounts to Companies House each financial year. In this article, we look at how you work out the deadline for your first annual accounts.
If you are a limited company director, one of your legal obligations is to ensure that your company’s annual accounts are submitted to Companies House accurately and on time.
A dormant company is one that doesn’t trade and has no accounting transactions.
There are two main situations where owning a dormant limited company can be useful for start-ups and small business owners;
Board minutes are a vital part of a successful business. They ensure directors are upholding their duties and act as a reminder for decisions made during board meetings.
As well as this, they can be important to provide information to directors who were unable to attend the meeting, new directors and, if need be, aid in cases of litigation.
This overview of the Companies Act 2006 and Directors Duties was first published in 2006, prior to the introduction of the Companies Act 2006.
All private companies must have at least one company director – but are there any legal restrictions on who can fill this position?
When you set up a limited company, as company director, you will have certain statutory and legal responsibilities which you should be aware of.
A leading North West law firm is issuing an urgent alarm call to non executive directors (NEDs) warning them that their personal assets could be seized by creditors if their company becomes insolvent.