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July 2nd, 2007, 10:34 AM #1
UK: Ltd company or sole trader?
- Join Date
- October 4th, 2006
I’m a developing affiliate marketer. My main source of income is from IT contracting which I do out of my own Ltd company. I’ve been advised by my accountant and an IFA to not put my internet marketing income through the company but do act as a sole trader for that as there are more tax benefits.
I’m not particularly out to nark off the taxman but there is a nasty legislation called IR35 which threatens my income from contracting – it’s complicated and I won’t bore you with the details – but one of the factors for staying outside of this legislation is the ‘nature of my business’ and how much I ‘appear to be in business’ as opposed to a ‘disguised employee’ using a Ltd company for tax avoidance.
If I were to bring my internet marketing activities inside my Ltd I think that might help me in the event of a visit from Hector, particularly as I might be doing some Adwords management, blog set ups, SEO and other consulting on the side which I advertise on my company website. I do tech support as my day job contracting but the internet marketing consulting is looking like it might start kicking off. I would prefer to have them under the same umbrella.
I am very much in business for myself and would prefer it if I didn’t have to jump through all these hoops but Gordon Brown seems hell bent on whacking IT contractors every opportunity he has.
I suppose my real question is – if you already had an IT related Ltd company would you operate your online business through the Ltd or as a sole trader?
July 2nd, 2007, 11:09 AM #2
It sounds like you're in the UK so I'm updating the thread title to make that clear. (Let me know if I'm wrong.) That should help you get some more relevant advise.
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