sole trader or limited company?

bob5666

just wondering am i best to set up a limited company or best to register as a solo trader?, i am setting up an online store selling goods it will be very seasonal with turnover of about maybe 20000 euro what would the pros and cons to either and what would do you think is best ?

Conor J

to the OP,
I would imagine sole trader is best if you expect to earn less than 37k, unless there is a possibility you could be sueued, or if you are taking out a decent loan that could be troublesum paying off. thats just my opinion, im no expert by anymeans..



However, Im in a similar predicament, i just set up as a sole trader so i could register a .ie domain, might earn a little bit of add money, but not much, not looking to trade yet, but will soon need to buy some basic office equipment. laptop, printer etc..

I have a couple of queries to add:

- Sole traders do not need to register for VAT if returns are less than 37,000, correct?
- If i am to buy the few goods listed above, and i will not be earning more than 37000, how can i claim back VAT on much needed office purchases (not looking to sell these one). Do i need to send the reciept away? or how does it work.

CompanyBureau

A small start-up like Bob's is probably best as a sole trader if personal liability is minimal and turnover is very small. You can alway change to limited if the business grows.

To Conor: You should employ an Accountant or Bookkeeper to look after these matters for you. You can only claim back VAT on purchases if you are a VAT registered business yourself. Also I believe the VAT thresholds are the same regardless of whether you are a sole trader or limited company.

byrne0f56789

Limited Company reduce your taxes bud. Use it to stay away from the higher rate of tax. You will be slaughtered if the income of your business plus other income you get from other sources exceeds the higher tax band if you are a sole trader.