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Which business type would be best suitable for me? (UK)

Discussion in 'Business & Tax Advice' started by iClick2Cash, Oct 9, 2009.

  1. iClick2Cash

    iClick2Cash Registered Member

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    I'm currently living in the UK and I'm a complete noob at CPA although I'm really interested in starting out in the CPA business hence I need some help with the business decisions. I'm really not sure which type of a business I should register, either a LTD or LLP. Which type would be best suitable for a beginner in CPA? The company will of course be in my friends name because I'm not old enough at the moment. Most important I cannot afford an accountant so I will have to do all the book filling and tax keeping all by myself and I'm not to sure how to go around that. Apart from this I do have the money to register the company and get a private address. Once the company is registered and for example 2 months later we decide to shut off the company because for example we aren't successful? Can you actually shut the company down after such a short period? Would this affect me in any way?
    So would anyone be able to give any good advice for a CPA comapny in the UK?? All advice welcome!!!
     
    Last edited: Oct 9, 2009
  2. crunch

    crunch Junior Member

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    you dont need form a company to start with. Just join a few networks and get on with it.

    As for keeping the books, get 2 large manila type envlopes together. On 1 write in big letters expenses and on the other income.

    Whatever you spend, print a reciept and put in envolpe 1. Whaterver payments u recieve
    print it up put in envelope 2. If your realy anal you could further organise into months and put a rubber band round the papers.

    when you make 30 grand pay an accountant a few $$$ for advise and to set you up.
     
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  3. iClick2Cash

    iClick2Cash Registered Member

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    Thanks, these are some great tips. Of course I will get an accountant when I reach 30K, it's just that I probably will reach a maximum of 10K at least for my first year but then again it all depends on how well I can handle IM.

    About the business, the main reason for me wanting to either get an LLP or LTD is because of the fact that a CPA or Affiliate company will look at me from a more professional way therefore giving me higher chances of acceptance. But I guess that as long as I have a nice website with a good marketing name and my own domain email I should have just as good chances of getting accepted as if I had a company.

    But should I stay as an Individual or go for a Sole Trader? I would actually prefer to be a sole trader but then again how does the tax and everything work? In order to become a Sole Trader the only thing I would need to do is notify HM Revenue & Customs that I'm self employed hence if I would want a company name how would I go about registering one?

    PS. The first post on this thread doesn't make to much sense, well it's not the way I really wanted to write it but what can I say when I was half sleeping while writing it. :)
     
  4. seowizards

    seowizards Junior Member

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    Mate, I'm from the United Kingdom and i currently run 2 LTD companies, What i suggest you do, Is stay under the radar until you make enough.
    Once you register as a sole trader you MUST SAVE at least 30% of your total earnings, trust me you'l be taxed hard. You also will have to pay National Insurance (if over 16) which i have included in the 30%.

    if you register as a company you have to pay double tax, corporation tax on your profits plus tax on what you pay yourself!

    I really advise you to stay under the radar at this minute, Once you start to earn at least £1,500 per month then i advise you to register as a sole trader and get an accountant to sort everything out, I pay only £99 per month for my accountant but saves me the hell of doing the taxes.

    I earn just over £12,000 per month (i'm a virtual property devoloper) and i pay out over £3,400+ tax each month so mate stay under the radar as much as you can!

    My 2 cents:D
     
  5. iClick2Cash

    iClick2Cash Registered Member

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    hehe thanks for the tip, to be honest I would love to stay under the radar but how would I explain cashing out let's say £200 each month when I'm only 17 and full time education? :(
    Unless I can somehow get the cash directly?? hmmm...
     
  6. Delboy2424

    Delboy2424 Regular Member

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    Occupation:
    Entrepreneur
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    Peckham
    You have your tax free allowance anyway of £6k so until you earn this..then I would start to be concerned, you can always register if you want to be ligit and fill your tax return in when it comes - you make nothing then you owe nothing, you make a loss as a sole trader it can be offset against any employed earnings.

    want some more info on starting up, record keeping, allowances etc - h**p://www.businesslink.gov.uk
     
  7. iClick2Cash

    iClick2Cash Registered Member

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    Thanks a lot for the helpful information. Is the £6K turnover? Or profit?
     
  8. Delboy2424

    Delboy2424 Regular Member

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    Occupation:
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    £6k is tax free earnings so if you make £7k "profit" you would be taxed at 22% on the £1k "profit".

    If you make a loss, then you can net this off against an employed income earnings if in the same year thus reducing your tax liabilty in your paid employment.

    Eg. - Employed £20k earning less £6k allowance = £14k taxable
    Self Employed - £1k loss ie.. after income less expenditure you have made nothing except the £1k loss - in your tax return this can be offset against the £14k taxable income and thus reduces this to £13k taxable.


    Hope this helps.
     
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    Last edited: Oct 11, 2009
  9. ThomasDark

    ThomasDark Junior Member

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    I don't like posting "nice post" comments, but this is really useful.

    I am not earning much at the moment, but I want to register an LLC and do all my online business through that, manage the company balance sheet well, and pay myself less than £6000 (to avoid taxable earnings)

    I am a little unclear on this, but if my company makes a loss, or no profit at all, I can still claim tax back for the company's spending (hosting, broadband, domain renewal, office supplies etc.) right?

    the way I see it, is:

    Individual:- Earn money--> pay tax--> money left over to spend

    LTD Company:- make profit--> spend--> pay myself less than £6000--> pay tax on remainder of profit.
     
  10. savvypro

    savvypro Regular Member

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    Just say your a part time gigolo.

    ...

    On closing the company down quickly, I've done it before - it was about 8 years ago.

    I think it was along the lines of sending in a letter stating that a resolution had been passed to close down the LTD - or something like that.

    Can't remember exactly what I did but it wasn't difficult (it was more of a hassle creating the LTD than closing it down), check companies house it will have the information on there.

    Also age shouldn’t be a problem, just remember you’ll need 2 people in order to be able to setup the LTD - unless the requirements have been changed.
     
  11. savvypro

    savvypro Regular Member

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    Forgot what I just wrote - it was even simpler than that.

    Get yourself form 652a, fill it in and send it off to companies house and your done.

    Form here:

    Code:
    www.companieshouse.gov.uk/forms/generalForms/652a.pdf
    There was a fee of £10.

    The grounds by which you can use form 652a are as follows:

    In the past three months the company has not:
    • traded or otherwise carried on business, or changed its name;
    • disposed of for value any property or rights which it would have disposed of for value in the normal course of trading or carrying on business; or
    • engaged in any other activity except for the purpose of making this application, settling its affairs or meeting a statutory requirement.

    This company is not the subject of, nor the proposed subject of, insolvencyproceedings or a section 425 scheme.

    If you do trade with the company then you'll have to use a different option.