Its too expensive to become a limited company, isn’t it??? 2


I have often heard sole traders say that it will cost too much to become a limited company.

This is because many sole traders prepare their own accounts and do their own self assessment returns, but the reality is that for a basic business, just like a basic sole trader it could be done on a shoe string.

Lets look at the costs:

Company Formation this could cost as little as £16.99 by using a formation agent such as http://www.company-wizard.co.uk/

Accounting Software – TAS Books Basic is Free http://www.tassoftware.co.uk/products/tas_accounts_software/basics.html

Payroll – HMRC software is Free https://stevejbicknell.wordpress.com/2011/09/17/free-payroll-with-free-updates/

Statutory Accounts – Free webfiling at http://www.companieshouse.gov.uk – the annual return only costs £14 if filed online

Corporation Tax Returns – Free software from HMRC https://stevejbicknell.wordpress.com/2011/09/08/corporation-tax-online-its-free-its-ixbrl-complaint-and-you-can-file-accounts-too/

I appreciate that there will be things that you might need help with, just as a sole trader would, but it doesn’t have to be expensive to be a company and small companies pay 20% Corporation tax compared to sole trader paying 20% tax and 8% NI on profits.

It is worth stressing that if you need help always seek professional advice, mistakes can be costly, but if as a sole trader you were happy to prepare your own accounts why would you not be capable of preparing company accounts?

steve@bicknells.net

 

 

2 comments

  1. If a sole Trader has little or no knowledge of Accounting and preparation of Balance Sheets etc., he/she would require a competent Accountant or Bookkeeper to prepare them for Companies House and HMRC.

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