Becoming a LTD company

[Bicky]

We have had someone tell us to look into becoming a LTD company as we are a husband and wife team. Has any one got any experience of this? I can see some of the benefits but also realize there are also many pitfalls. Any help is gratefully received.

[MrAnchovy]

Main advantage:

No Class 4 NI


Main disadvantages:
Cannot use concessionary %age rates for use of home (but you can charge the company a fair apportionment based on the amount of time and space used as long as you are not looking after your own children).
No wear and tear allowance.
You need an accountant - the reporting to HMRC is MUCH more complicated, plus there are accounts for companies house, payroll (you and your husband will almost certainly be paid directors fees by the company through PAYE).

[Bicky]

Main advantage:

No Class 4 NI


Main disadvantages:
Cannot use concessionary %age rates for use of home (but you can charge the company a fair apportionment based on the amount of time and space used as long as you are not looking after your own children).
No wear and tear allowance.
You need an accountant - the reporting to HMRC is MUCH more complicated, plus there are accounts for companies house, payroll (you and your husband will almost certainly be paid directors fees by the company through PAYE).


Thanks
The more we think about it the more its seems to cause more problems than it solves. Think we will just run it as a simple partnership bases and go from there.

[Chatterbox Childcare]

I am in a partnership now with my DH and we looked into a LTD Co. We found that by the time we had paid an accountant more, paid corporation tax, lost wear and tear we were worse off.

Let us know how you go though.

[Bicky]

We have now spoken to a friend who used to work for HMRC. she advised us not to go LTD as the negatives far out way the benefits. We just want to keep it all as simple as possible.
Thanks Again
Billy