Answers to your questions about accounting👇
Ask Away: Answers about accounting with Osome
Thank you to everyone that submitted questions about accounting and bookkeeping. You can find answers down below, answered by our partner Osome’s Senior Accountant Taimur Ghafoor 👇
Q: What are the clear benefits of me switching from self-employed to a limited company?
A: Self employment is easier but riskier. A Ltd is a separate legal entity that acts as a barrier that provides base protection from your lenders and debtors as long as there is no fraudulent activity. However, this comes at a cost as your information is more public as compared to sole trader. In terms of taxes, a ltd company has more options that allows you to navigate tax more efficiently. In shorter run sole trader would be better but ltd company is better for growth and external help.
Q: Are they taxed the same?
A: Sole traders are taxed at their actual net profit where as a ltd company is taxed corporation tax but individuals are only taxed if they take money out of the business for personal use and under dividend the tax is a lot less.
Q: Can you only be VAT registered if you have a Limited Company?
A: No, ltd company is for anyone who sells a vatable product
Q: What expenses can I claim?
A: With expenses, any money that you are spending for your business is almost claimable. With some exceptions to HMRCs condition you need to keep a record of everything you are spending your money on for the business only purpose and claim them based on HMRC'S rules
Q: What are my tax responsibilities as a limited company director?
A: As a director you have the obligation to ensure your company is running in accordance to the rules and regulations and is not involved in any fraudulent activity.
You have to submit your PAYE, VAT, CORPORATION TAX AND COMPANIES HOUSE ACCOUNTS
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