Becoming a Ltd company

[Gavoneill]

Hello all,

I`m starting my own business and have been looking in to the pro`s and con`s of forming a LTD company plus being VAT registered.

I ran a buisness a few years back as a sole trader but a wasn`t VAT registered. This time round I`ll be getting a van on contract hire rental and I`ve read online that you can claim 50% of the rental and 100% of the vehicle maintenance back if your a Ltd company, not sure how true this is?

I know you have more paperwork to do if ltd and vat registered so was wondering if anyone has any experience of this.

 

[tahir2]

My reply would be get an accountant and ask him these questions.

 

[Gavoneill]

Yes that was my first thought.

 

[WoodYouLike]

As above and get a good accounting/bookkeeping program that takes care of all the VAT thingies.
Kashflow (online program) comes to mind

 

[Boilerman2]

Be cautious of asking an Accountant about becoming a LTD Co, remember an Accountant will be charging you a lot more to look after you as a LTD Company as there is a lot more for the Accountant to do, such as posting annual returns to Companies House, sorting out corporation tax etc etc as well as your own personal tax return so beware

Why not ask advice from your local "Chamber of Commerce"

P.S. a Contract hire van is owned by the Ltd Co, and so it is 100% deductable and Vat reclaimable as long as you don't use the van privately, if you do then you will have to pay tax on the Benefit in kind

 

[Harbourwoodwork]

what work have you got on?

 

[bolst3r]

Not sure the accountancy fees are the biggest concern. Biggest thing for you is your quotes to punters will be 20% higher than a non vat registered company. Will this price you out of the market? Next question is what's a realistic turnover? If its over £75k ish then you have to be vat registered anyway. Personally speaking vat and ltd works for my design business as it gives me more credibility with bigger clients also the tax breaks are very good, I can invoice 30% less than I earned when I was employed but end up taking the same money home. FYI, my accountant charges around £800 a year for my books, tax returns and corp tax etc. I do my vat return quarterly
So in the scheme of things £800-£1000 on fees isn't going to sway the decision.

 

[flameport]

I know you have more paperwork to do if ltd and vat registered

Hardly.

If you do accounts on paper, VAT just adds an extra column.
Since computers are used for accounts by all sensible people, there is no extra work at all, other than filling in the VAT return every quarter, which might take 10 minutes if you really stretched it out.

A limited company changes nothing - general accounting records are exactly the same.
There is additional work in submitting properly formatted accounts to Companies House every year, but normally you would pay your accountant to do that.

The only time people complain about these things taking extra time or expense is when they haven't been doing accounts properly or at all. These are the same people who shove all their receipts in a cardboard box and deliver it to their accountant 24 hours before their tax return is due.