That approach is also fine

I went ltd from the get go on accountants advice - you do need to operate paye but its very straight forward for a one man band and banks should give you free banking shop around. You can claim more as expenses etc and its a good foundation if you end up takin lg someone on as I did for a time. There are tax advantages too as elsewhere but that's not the only reason. Why not cost it out both ways on conservative income assumptions: assume turnover ?x as a sole trader claim y as exes pay z in NICs and income tax; as ltdco assuming low salary plus divvies same calculation including the overheads. If you have a missus she can have some shares and thus get some divvies (which can be good from a tax pov) as long as she genuinely does some work (like the company secretary job and attendant admin). If she does f**k all, giving her shares to avoid tax would be frowned on.

As you can say you can always start out schedule D and see how it goes. If for whatever reason it doesn't pan out its easier to stop (closing down a ltdco has admin overheads).

Either way keep scrupulous records and don't think about claiming something you shouldn't. Hector is (rightly) quite strict in those cases.

Posted By: Old Man, Aug 7, 19:52:45