Tax advice on running a yard

[1983rek]

I am leasing a yard of 20 horses half DIY and half part livery. Am I best to register as self employed or as a limited company? Thanks for your thoughts rx

 

[1275gta]

If you register as self employed from a tax perspective you will pay tax and NI on any profits you make over 6500 (in simple terms) this equates to around 31%

If you aare a limited company you pay yourself 6500 with no TAX or NI liability, pay corporation tax of 21% on rest of profit and take it out as a dividen with no liability to personal tax. #

You will basically save 11% NI.

It will cost you more to have your tax returns done if limited so that has to be compared against saving.

 

[martlin]

I would think it's worth going in to bother of registering as limited company, I would go self employed. You NI will be £2.10 a week, so not a massive amount and it is a tad easier to do tax return.
From a liability point of view, a limited company is always a better idea, because if X equestrian has no assets to speak of, you can't be sued out of anything... so, you declare X equestrian bankrupt and the next day register Y equestrian...

 

[1275gta]

For self employed you also pay class 4 on profit as well as the 2.10 a week which is an effective tax rate of 31%.

 

[dixie]

Gypsycob is correct with the tax rates. You need to look at the overall picture though, its not just about the tax. I would suggest you have a meeting with an accountant - most do a "free hour" first interview. You also need to consider VAT, book-keeping, payroll etc.

Oh and good luck with your venture.

 

[luckilotti]

I'd suggest talking to an accountant or maybe businesslink could offer some advice?
Have you got a sold business plan in place and know what income/outgoings you can expect for the 1st year?

 

[CBAnglo]

[ QUOTE ]
If you register as self employed from a tax perspective you will pay tax and NI on any profits you make over 6500 (in simple terms) this equates to around 31%

If you aare a limited company you pay yourself 6500 with no TAX or NI liability, pay corporation tax of 21% on rest of profit and take it out as a dividen with no liability to personal tax. #

You will basically save 11% NI.

It will cost you more to have your tax returns done if limited so that has to be compared against saving.

[/ QUOTE ]

If you are taking £6,500 as earned income, and the rest in dividends, I think you will fall into the trap of having the dividends assessed as income anyway.

Have you considered a limited liability partnership? You will need two members (yourself and perhaps partner?) and you operate as a partnership i.e. have the NI saving but also have limited liability status.

Agree with the suggestion to speak to a lawyer/accountant/business adviser.

 

[nona1]

I work for an accountant - we can do a quick tax/costs check to see which option is financially better. there are other issues to consider as well.

get some pro advice - it can save you a lot of hassle/money in the long run.

PM me if you are in the south-east...