Business Start-Up
Sole Trader, Partnership or Company ?
We understand well that starting your own business is a really challenging task. We will guide you a choice of your business structure, compliance issues in Accounting & Tax according to your circumstance to help you to make a proper decision.
Help you to prepare for your business plan
Free advice on right business structure for you.
Demonstrate tax difference on different business structures
Differences on Sole Trader/Partnership & Company :
Sole Trader & Partnership :
- You are personally liable for any debt of business in full.
- You are taxed on net profit regardless drawing.
Limited Company :
As you and Company are separate entities, you are liable for only unpaid shares ie you are not liable for company’s debts.
You, as an individual, are taxed on only extracted profit as salary, dividend, rent, interest etc. and Company is taxed for corporation tax on taxable profit.
Choice of business structure is depends on your personal circumstances and profit expectation in the early years of business.
Construction Industry Scheme (CIS)
Who is covered by CIS ?
Builder, Labour agency, Gangmaster and property developer. Under the Construction Industry Scheme ( CIS ), contractors deduct money from a subcontractor’s payments and pass it to HMRC by 22 every month and do monthly return by 19 every month. The deductions count as advance payments towards the subcontractor’s tax and National Insurance.
The Construction Industry Scheme (CIS) deduction rates are:
- 20% for registered subcontractors
- 30% for unregistered subcontractors
- 0% if the subcontractor has ‘gross payment status’.
- To qualify for ‘gross payment status’ –
- your turnover for the last 12 months ignoring VAT and the cost of materials, must be at least:
- £30,000 if you’re a sole trader
- £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership
- £30,000 for each director of a company, or at least £100,000 for the whole company
If your company’s controlled by 5 people or fewer, you must have an annual turnover of £30,000 for each of them.