Ltd company to sole trader

Sine1

Hey, started out as a sole trader approximately 3 years ago, after the first year set up a ltd company. In the first 1 1/2 years the ltd company was of a benefit because there was good profits within the company. The last while though not much money is coming in, and haven't been able to take out a wage from the ltd account.

thinking of getting out of the ltd company and back to a sole trader accounts, anyone have any advice with this

dbran

Hi Sine1

First of all you need to consider why you want to change back to a sole trader from a limited company;

1) The limited company will remain as a dormant company even if not trading and can only be got rid of by strike off or liquidation. You will still have to file all the returns etc untill this happens.
2) Meanwhile you will be loosing your limited liability status.
3) The core problem which is how to increase sales/turnover will still be there to be solved.
4) There may be tax issues, especially if you were trading as a sole trader before.


Just my 2c though.

DB

Sine1

Hey DB, Thanks for your thoughts alot decisions to make , was thinking that once you get over the cost of closing the company sole trader accounts etc alot more straight forward. Can gain more with regard to VAT as well, on diesel etc

dbran

Yes it is true that sole trader accounts are a lot more straight forward then a limited company's.

I would say consider first the reasons why you incorporated in the first place. If these reasons are no longer valid or important then you may be better off as a sole trader.

DB

lanternman

I dont understand how you are saying that you will be gaining more from VAT and diesel if you run the company as a sole trader!

Do you claim audit exepmtion?