Help with UK clickbank income / tax / company.

12 years ago

If you remain self employed as a sole trader or partnership then income will count as personal income. If you incorporate, for example as a limited company then the income belongs to the company as a separate legal entity. Corporation tax will be due on company profits and you will have to submit accounts each year to HMRC. Corporation tax rates vary but for most smaller companies (less than 300k profit per annum) then the rate is currently 20%. You can see latest rates at:

HM Revenue & Customs: Corporation Tax rates

Deciding which way to go will depend on your individual tax position and your specific requirements. Get advice from a tax accountant.

regards
Colin

[ 1 ] Thanks

Signature

WANT TO FIND BARGAIN ITEMS TO SELL AND MAKE HUGE PROFITS? NEW ARBITRAGE SOFTWARE TOOL IS THE ANSWER!

{{ DiscussionBoard.errors[7972298].message }}

ownergolan

12 years ago

Thnx for the help colin!

When you say corporste tax will be around 20%, what about if it is personal ?

I understand the need of being limited liability, but what are the benefits? will i pay less tax?

Do you think it is better to be a sole trader or llc ? (tax wise etc..)

thank ou once again.

Thanks
2 replies

Signature

"Aiyyo I'm gonna be on ti-dop, that's all my eyes can see..
Ill put in work, and watch my status escalate"

{{ DiscussionBoard.errors[7972356].message }}

Alexa Smith Banned 12 years ago

Originally Posted by ownergolan

When you say corporste tax will be around 20%, what about if it is personal ?

How much will be liable for corporation tax depends on how much you decide to draw as salary. You could possibly have more flexibility that way, but it's complicated.

Originally Posted by ownergolan

I understand the need of being limited liability, but what are the benefits? will i pay less tax?

The answer depends on lots of things. You could (if already a taxpayer) have a little more flexibility to arrange things in a way which slightly reduces your tax-bill compared with the situation if you didn't incorporate, and there'd perhaps be no point in doing it at all, otherwise? But only an accountant who knows all about your personal circumstances and situation can advise you about this, really.

Originally Posted by ownergolan

Do you think it is better to be a sole trader or llc ? (tax wise etc..)

Incorporation is better for some people; worse for others. Which is why you need professional advice.

These things are complicated. (I have one limited-liability company I'm not even using at the moment, because my own tax position changed during the 2011/12 tax year).
- [ 1 ] Thanks
{{ DiscussionBoard.errors[7972386].message }}

Chri5123

12 years ago

Originally Posted by ownergolan

Thnx for the help colin!

When you say corporste tax will be around 20%, what about if it is personal ?

I understand the need of being limited liability, but what are the benefits? will i pay less tax?

Do you think it is better to be a sole trader or llc ? (tax wise etc..)

thank ou once again.

Hi,

I went LTD on advice of my accountant.

Which is really the answer to your question. Get an accountant, honestly it is one of the best things I have done with my business and it saves you HUGE headaches.

I started off sole trader and essentially was advised to go LTD because of my income.

It is swings and roundabouts though and the KEY factor is your income and what suits you best.

Being a sole trader is A LOT less hassle - you don't have to worry about corporation tax and will just pay a chunk of what you earn in tax.

IF you are making enough that puts you up on another tax level so you are giving away 40% of your income then it is time to start looking at LTD.

An accountant will be able to run you through all of this and you will feel much better believe me!

Of course I am speaking from experience and numbers have never been my strong point.

Chris

[ 1 ] Thanks

{{ DiscussionBoard.errors[7972400].message }}

Kim Standerline

12 years ago

I've just gone incorporated on the advice of my accountant

Kim

[ 1 ] Thanks

Signature

The Easiest Dimesale Script Ever!!

EasyMemberPro is back with Mama
How To Write And Profit From Hot Romance (Kindle Product)

{{ DiscussionBoard.errors[7972380].message }}

Rewbert

Banned 12 years ago

I'm sure you can book a meeting with your accountant and go through it all, she or he will also answer most of your questions. You could mention on the phone what your desired meeting will be about so they got time to prepare.

Thanks
1 reply

{{ DiscussionBoard.errors[7972418].message }}

Kim Standerline

12 years ago

To be honest, I think you've had the best possible advice on here that advises you to consult your accountant, and if you don't yet have one, I advise you to do so ASAP, it's amazing how much money they can save you, plus keep you on the right side of the law

Kim

Originally Posted by Rewbert

I'm sure you can book a meeting with your accountant and go through it all, she or he will also answer most of your questions. You could mention on the phone what your desired meeting will be about so they got time to prepare.