Archive for the ‘Limited Companies’ Category
The new Small Business Enterprise and Employment Act will impact all companies and Limited Liability Partnerships (LLPs).
There are many changes being implemented in 2016 including:
- Restrictions on use of corporate directors
- Extension of duties of shadow directors
- Replacement of the annual return with a process for confirmations
- Option for a private company to elect to use the central register
- Procedures for rectification of the register relating to the company’s registered office
- Shortened periods for striking off companies
- Changes to the disqualification of director’s regime and introduction of a new compensation mechanism in relation to insolvent companies
- Easier and simpler to remove the details of falsely appointed directors from the register.
One change is the need to keep a record of People with Significant Control (PSC) so they can file a “confirmation statement” at Companies House.
A PSC includes people within a company or LLP who meet the following conditions:
- Owns more than 25% of the company’s shares
- Holds more than 25% of voting rights
- Holds the right to appoint or remove company directors
- Exercise influence or control of the company.
The information required for an individual is the name, month and year of birth, nationality and service address will be publicly available, together with details of the interest concerned.
If you would like with any of the new rules let me know.
There are different types of accountants, some are unqualified working from a bedroom while others are based in expensive offices. Consequently prices vary, but so does the value.
Before thinking about the cost of accounting fees, think about the value which broadly comes in three elements.
First there is making sure you are legally compliant so you don’t suffer fines, penalties and hassle from the taxman. This can include extras like what we do at Scakmans of dealing with tax investigations.
Secondly, there are tax savings. Again, at Sackmans unless we are working with a start-up or low profit business, our fees are pretty much always covered by the tax savings we create and maintain from our tax planning advice.
The third element of value accountants bring is sound business advice. This can just be a new perspective or more specific advice which can be based on working with other clients. Once again, at Sackmans we have a free online advice library that all clients can use plus we have the On-Track service for business owners who want to work a bit closer with us.
Sound business advice can include ways to save time on red tape. A recent survey of small businesses by the FSB found that half spend between two and eight hours each month trying to understand and calculate their taxes and complete their returns.
The survey of 2,198 business owners found that a further 11 per cent spend between two and six days per month working on their taxes. I assume their accountant has not told them about systems like Xero which can save anything up to 60% of the time with features like recurring invoices and bank feeds.
The survey also found 77 per cent spend up to £5,000 on professional fees and software to meet their obligations. I would assume this includes bookkeeping service and/or business advice because the annual fee for personal 1-2-1 support from a qualified accountant during the year plus dealing with limited company year-end accounts/tax should really not exceed £2,000.
These are the five key reasons you should consider trading as a limited company.
Lower tax bills
Assuming you are making profits then trading as a limited company enables you to reduce the tax and National Insurance you pay.
The amount of the saving depends on the level of profit and tax year in question but the savings kick in at around £25,000.
Protection
If you do something wrong in your capacity as a business you can be sued.
Trading as a limited company provides protection of your personal assets because the person suing you can only go after business assets.
Keep in mind that you and we are moving to a more litigious society and customers are more inclined to use the legal system than ever before.
Also bear in mind that one of the people who may attack you is the taxman. If they believe you have made a mistake you could end up with a massive tax bill because they can go back many years. Another example of someone who can sue is an employee. The maximum award for unfair dismissal from 1st February 2013 is £111,100.
Impression
Trading a limited company and being the Managing Director is more impressive than being a sole-trader. You can also register for VAT voluntarily which will create the impression of being more established than you are.
Raising money
If you are a sole-trader or partnership and want to get some investment, it can be quite complicated. But, with a limited company you can just issue shares.
And, if you trade as a limited company the bank can offer what’s called a Debenture or Floating Charge. This means the bank gets paid before any VAT or unpaid PAYE which can increase the likelihood of bank support.
Structure
When you trade as a company the money in the business is not yours.
If you want to take it you need to pay yourself a salary, repay money you lent the company or pay a dividend. This is sometimes seen as a negative but it’s actually good to treat the business as separate to you.
For a full review call today to arrange a meeting.
No. From 6th April 2008, a private company has had the option whether or not they have a company secretary. It is no longer a legal requirement.
