23.11.19

Self Employment – be your own boss!

 is the simplest business activity in the UK.

You are the boss for yourself, you decide how many hours a day you work, when you take a break or go on holiday.
You work independently and you can perform services for many people.
Your company is not legal entity, so remember that you are responsible for the business with all your assets.

You should also remember about the obligations related to self-employment.
You are required to submit a tax assessment once a year (Self Assessment), you must also remember to pay income tax and national insurance.

What’s important – documents about the company should be kept for 5 years! On the other hand, if your company’s revenue exceeds £ 85,000, you must register and account for VAT. Accordingly, self-employed person would have a tax thresholds. The tax-free amount for 2019/2020 is £ 12,500 and income up to this amount is not taxable,however you will pay 20% tax on antything over £ 12,501

If you decide to run Self Employment, make sure to register with HM Revenue and obtain a UTR number. There is no obligation to register at Companies House.

Also remember to pay National Insurance Class 2, which is £ 3 a week if your earnings exceed £ 6.365 in the tax year 2019 – 2020. Nevertheless, if your earnings are less than £ 6.365 you are not required to pay any national insurance, however you can still choose to make these contributions voluntarily. If you earning are over £ 8,632 , in addition to NI Class 2, you must pay NI Class 4, which is 9% on an income over £ 8,632

If you want to start a business in the UK and enjoy independence, please contact us. We will advise you on how to take your first steps efficiently and help you set up a business. A reliable accountant is more than half of your success.

 

www.fairaccountancy.co.uk

Limited company – business without restrictions

When deciding to run a Limited Company in the United Kingdom, i.e. a limited liability company, you need to know the basic advantages.
One of the main ones are:

  • clarity,
  • no tax thresholds
  • limited liability.

To register a Limited Company, we only need three days. You can set up a Limited Company even if you are not a UK resident and a minimum of one person is required to register. In fact, after receiving the Certificate of Incorporation, you can start working straight away, in the meantime we would be applying for the necessary registrations. The company must have a shareholder and a director who will represent the company (it can be the same person), who also will be responsible for finances and settlements. The owner’s liability is limited to the amount of capital invested, which helps protecting owner’s private assets.

It is important to know that once opening limited company there is no restrictions on the establishment of share capital,
in principle you can start from £ 1. Limited company can operate globally, open branches and employ employees.

Limited Company does not have a tax-free amount, but employees remunerations are tax deductible. Income tax for Limited Company (Corporation Tax) is currently 19%, in the future it is to be reduced to 17%.
The tax must be paid within nine months of the end of the company’s tax year.
The company ends its tax year 12 months after registering with Companies House. If the company’s revenue exceeds the amount of £ 85,000, you must register as a VAT payer.

Operating as a Limited Company, i.e. as a legal entity, provides higher credibility than self-employment. It is much easier to get a loan, funding or a more favorable contract

If you are still not convinced whether the Limited Company activity is for you – get in touch with us! We will be happy to answer every question and advise you which solution is best to achive your goals. A reliable accountant is also your success!

office@fairaccountancy.co.uk

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