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Lorrainelovesplants

Joined: 13 Oct 2006
Posts: 6521
Location: Dordogne

Posted: Tue Dec 02, 14 10:04 am Post subject: business legal entity
Sorry, dont know what to name this subject - Ill explain. If your business is as a sole trader, ie you are the business, can you still employ someone or does this mean you are then a company? I need to know if I have to change the legal status of what I do if I take on a part timer.

Falstaff

Joined: 27 May 2009
Posts: 1014

Posted: Tue Dec 02, 14 10:12 am Post subject:
You can employ people all day long and still be a sole trader

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Tue Dec 02, 14 10:43 am Post subject:
Search: business types legal definition uk in your favourite search engine

Hairyloon

Joined: 20 Nov 2008
Posts: 15425
Location: Today I are mostly being in Yorkshire.

Posted: Tue Dec 02, 14 10:46 am Post subject:
But you will need Employer's Liability Insurance.

dpack

Joined: 02 Jul 2005
Posts: 46169
Location: yes

Posted: Tue Dec 02, 14 11:36 am Post subject:
and a basic understanding of paye /ni or accounting for them as sub contractors either is fairly simple

Lorrainelovesplants

Joined: 13 Oct 2006
Posts: 6521
Location: Dordogne

Posted: Tue Dec 02, 14 11:49 am Post subject:
I already have employers liability. I will take advice on PAYE etc - this is the stuff that has put me off for a while....

dpack

Joined: 02 Jul 2005
Posts: 46169
Location: yes

Posted: Tue Dec 02, 14 12:10 pm Post subject:

iirc it is fairly easy , they have a tax code and ni number,the amount they get paid and the tax code determine how much tax and ni should be paid ans the ni number makes sure it is recorded to their/your tax records

i think the tax office should have an "easy guide to paye/ni"

from what i remember it takes a few mins with a calculator and a few more to enter the numbers on the forms/in your accounts

tis probably all paper free these days

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Tue Dec 02, 14 12:35 pm Post subject:

Lorrainelovesplants wrote:

I already have employers liability.

I will take advice on PAYE etc - this is the stuff that has put me off for a while....

That's straightforward if you have good software. I can highly recommend FreeAgent which not only manages invoicing, billing VAT returns, tax but also payroll.

Lorrainelovesplants

Joined: 13 Oct 2006
Posts: 6521
Location: Dordogne

Posted: Thu Mar 12, 15 3:51 pm Post subject:
Im asking another question now..... As Ive been a sole trader for the last 10 years and the business is FINALLY turning around...Im thinking about if I should change its status. Ive been told as a cider producer, it might make sense for me to become limited. So LLP, partnership, Ltd - what are the differences and pluses and minuses.

dpack

Joined: 02 Jul 2005
Posts: 46169
Location: yes

Posted: Thu Mar 12, 15 4:01 pm Post subject:

ltd needs an audit every year which costs money ,however the amount it costs can be easily recovered by using the company to pay for things that a sole trader or employee has to buy from their own pretaxed money .

with good accounting advice and making use of the advantages on stuff you needed to spend out on anyway ltd can be a good way to trade .another advantage is that although most loans need security unsecured debts or liabilities are the companies problem rather than your problem if it goes toes up at some time .

the main disadvantage is paying for an audit and the need to get good advice re the best way to account for in and outgoings .there is usually a break even point on turnover/profits above which being a sole trader is not efficient.

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Thu Mar 12, 15 4:49 pm Post subject:

Lorrainelovesplants wrote:

Im asking another question now.....

As Ive been a sole trader for the last 10 years and the business is FINALLY turning around...Im thinking about if I should change its status.

Ive been told as a cider producer, it might make sense for me to become limited.
So LLP, partnership, Ltd - what are the differences and pluses and minuses.

LLP's are primarily for solicitors and accountants. It is tax transparent i.e it doesn't pay corporation tax or capital gains that liability falls to the partners as self-employed persons.

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Thu Mar 12, 15 4:52 pm Post subject:

dpack wrote:

ltd needs an audit every year

Small LTD companies are exempted from the need to have an audit but they do have to have accounts prepared by an accountant.

Quote:

Your company may qualify for an audit exemption if it has at least 2 of the following:
- an annual turnover of no more than £6.5 million
- assets worth no more than £3.26 million
- 50 or fewer employees on average

dpack

Joined: 02 Jul 2005
Posts: 46169
Location: yes

Posted: Thu Mar 12, 15 5:22 pm Post subject:
that has changed since my time ,we could do the books/accounts in house but they had to be externally audited. i spose if the bookeeping is tidy getting the accounts drawn up by an accountant would not be too costly . i recon shop around for some quotes .

sean
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 42219
Location: North Devon

Posted: Thu Mar 12, 15 5:42 pm Post subject:
At LLPs level she prolly wouldn't need accounts prepared by an accountant either.

Ty Gwyn

Joined: 22 Sep 2010
Posts: 4610
Location: Lampeter

Posted: Thu Mar 12, 15 6:24 pm Post subject:
Ask Companies House to send you the relevant info on company types.

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