Sorry and apologise in advance as I am sure my question have been asked a few times before!!!!
Currently I am trading as a sole trader but have registered a new business with companies house to become Ltd business is still the same but change of name.
My question is now I have my company registration number I need to close down my sole trader business looking to do this April 6th as will give me full year for tax return and open the Ltd company from 1st April so accounts would run 31st March to 1st April so Vat would run quarterly along side of year end ( am I correct in thinking this) first Vat return being June, Sept, Dec.
Do you think the dates are right?
What should I do with the stock I hold and the money left in the sole trader account?
I know I will be liable for tax on the profit on the cessation of business.
Am I able to reinvest the money and stock into the new company as capital introduced? The money that I put in can I put it in as directors loan and draw it down?
I understand that changes are being made to PAYE and will have to register as an employer so that my wages will be paid through PAYE paying myself the minimum and small amount of NI.
When I submit my tax return do I state this was the final year of trading and what is the difference in the final year off trading accounts what do I do?
Really am sorry a little long but really hope someone can help me out here as a little confused.
Oppsy not sure if this post is in the right place!!!!
Thanks in advance
Nicola
-- Edited by Nikijd on Wednesday 13th of March 2013 12:08:16 PM
provided that the businesses are totally seperate you can quite happily be both at the same time. And indeed you can also have multiple companies.
It is a little more complex as the self employment is an extension of yourself whereas the limited company is a totally seperate legal entity.
Sorry, only just come accross this thread. Right just got to say Hi to Nicola,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Marks answer was quite short but the sentiment behind it is sound in that transferring over to a limited company you need to unravel your existing financial position including any double taxation that you may have suffered in your early years of trading.
The following quick points sould show why it is a good idea to involve an accountant in this to assist you.
Setting up limited is relatively straight forwards the issue will be with the valuation etc. of the opening balances of the incorporated venture.
Once established your brought assets brought forwards to the limited company will be introduced at their fair value as at the date that the new business starts as though they had been purchased by the new business at that price and that value will be recorded as capital introduced.
Note that the assets of the business are treated as being sold to the company for market value but any gains can be deferred via incorporation relief.
No AIA or FYA will be available for the brought forwards assets.
As a sole trader you will have been paying class 2 and 4 NI. Moving forwards this will now be class 1 and 1A.
As the company is registered for VAT the transfer of assets is as a going concern so is outside the scope of VAT.
Any transfer of property will be subject to Stamp Duty Land Tax but there are ways around this.
As you can see, I'm basically saying in a somewhat longer post the same as Mark that it would be a good idea to involve an accountant in the incorporation as without them you may be missing reliefs and alternate treatments that you know nothing of.
By the way Nicola, the dates that you state sound fine.
Good luck with the new venture and wishing you a very prosperous first year as a limited.
kindest regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thank you Shaun for the welcome and your advice, it has really all been trying to get my mind around things as don't wish to sound a fool when I appoint an accountant. I guess as always I look to deep into things and wish to be armed with the right questions.
Thanks once again
Niki
