This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Sole trader to Limited Company

DrakeHarold
Posts:3
Joined:Fri Aug 13, 2021 8:43 am
Sole trader to Limited Company

Postby DrakeHarold » Tue Aug 17, 2021 4:47 am

I have a client who wants to set up a product design business, initially working alongside his full time employment (he is happy there is no conflict of interest) and then going full time on his own. He is a higher rate tax payer

He has asked if it might be worthwhile initially to trade as a sole trader because he is likely to make a loss in his first few months up until 5th April 2015 then revenues are likely to start coming in at which point he would like to incorporate into a limited company. So he is thinking about setting initial losses against his other income to reduce tax this year.

wamstax
Posts:1956
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Sole trader to Limited Company

Postby wamstax » Tue Aug 17, 2021 7:58 am

Where are you copying your posts from.? You cannot be serious Christmas joys and cheer in your other post in August.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

robbob
Posts:3147
Joined:Wed Aug 06, 2008 4:01 pm

Re: Sole trader to Limited Company

Postby robbob » Tue Aug 17, 2021 8:16 am

You cannot be serious Christmas joys and cheer in your other post in August.
Must admit i had a couple of "late" Xmas parties last month one of which included the tree xmas music and other standard xmas fare excluding the eggnog thankfully - these are strange times indeed !!

To the op seing as you asked this should be fine and makes sense - however this is subject to the caveats outlined in HS227

https://www.gov.uk/government/publications/losses-hs227-self-assessment-helpsheet/hs227-losses-2021

Specific main no no's in this regard.

do not run your trade commercially and for profit, for example if your trade is run as a hobby


The amount of loss relief you claim against income or capital gains may be restricted or limited for example if you:

worked for less than 10 hours a week on average on commercial activities of the trade
are a limited partner or a member of a limited liability partnership
have a trade which is carried on wholly overseas
have claimed certain capital allowances,
have income from oil extraction activities or oil rights

robbob
Posts:3147
Joined:Wed Aug 06, 2008 4:01 pm

Re: Sole trader to Limited Company

Postby robbob » Tue Aug 17, 2021 8:24 am

Oops nearly forgot - merry christmas !!!! Ho Ho Ho


Return to “Business Tax”

cron