Self Employed

it will depend upon what work you do as there is a vast difference between trades

i) do not go limited ii) get liability insurance iii) get an accountant (local cheap one man band, should cost no more then a few hundred quid a year, which will come back many times)

Gaz

if you own your own house , have a few quid in the bank go limited

protects your personal asetts--

Get your self an accountant that specialises in sole traders. He will advise and make sure you avoid the pitfalls. The money spent should be recouped from less tax than you would otherwise pay.

Peter Crosland

snipped-for-privacy@yahoo.co.uk

That what liability insurance is for.

Not necessarily, you can and will be chased for debts if you havent followed company law. Limited liability, as long as you follow the rules, and with the Governments position on tax paid on company dividends getting worse then just paying income tax, i wouldnt go down the company route.

Gaz

Correct, limited liability does not protect you against illegal acts. Nor should it. Although you will still only be chased for debts if they arise as a direct result of your lawbreaking.

They are still not worse than paying income tax, and you pay no NI on them.

And if you find your work through agencies, most of them will insist on you going limited (or using an umbrella company) - in order to protect *themselves* against tax claims.

Ignore - definitey do both - have a limited co and run as self emloyeyed (as long as you can afford 2 sets of accountant bills). Best of both worlds

RUBBISH! Does your liability insurance cover you if one of your customers goes bust owing you £70,000 and as a result you can't pay YOUR bills and you have to go bust to - and loose your house?

You don't know what you are talking about - don't give advice!

Given his level of income it's not worth using a company unless limited liability is important.

Peter

Its not your income, its your assets that matter. If he gets sued for a deal that goes wrong, then can't pay - he could lose his house - he won't if a limited co.

I guess you didn't see "unless limited liability is important."

Income matters too.

Peter

No, I ignored what you said. Limited Liability is MORE important if you have a low income, as you are more likely to get into the trap of not being able to pay a creditor. Much better to fold a company for a £750 debt than be made bankrupt.

ide quoted text -

It's plainly stupid to form a company for limited liability purposes if you don't have creditors. Judgment is important in business. Never run a business by formula.

Peter

EVERY business has the potential to incur losses, whether they borrow money or not. If you provide product or services to someone and they don't pay, you have made a loss. How you going to pay wages, petrol bills, rent etc. Doesn't take much to reach a point (£750) where someone may try to make you bankrupt. What if you don't pay one man, one months salary and he wants to stiff you?

If a customer doesn't pay you you have made a loss but it doesn't mean you owe anybody money.

Not every business pays wages or rent.

Petrol is usually paid up front and doesn't lead to a creditor.

You have to use your judgment and not make unjustified assumptions.

Peter

It doesn't *necessarily* mean that, but it often can do:

You could owe VAT (unless you're not registered, or it was an untaxable supply, or you operate the cash-accounting scheme).

In order to supply your customer, you might have committed to purchases on credit terms, and relied on the customer's payment to help you pay your supplier's bills. So you could owe your supplier.

On this planet, petrol is usually paid for by credit card, so automatically leads to a creditor.

I think we've gathered that I am saying you should make the decision after taking into account the actual circumstances whereas some posters think that blanket assumptions should be made and used in the decision making process.

Peter