Do I need to set up a company? (UK)

I am earning quite well now from my websites and need to know the next step.Do I need to set up a company and if so what type.I am UK based and ALL my earnings come from USA.

Any advice appreciated.
Thank you
MK

 

Registering yourself as self employed is a lot easier than registering a company. It only takes one phone call, and you have to file a tax return annually as well as paying class 2 national insurance (about £2 a week)

Details at: http://www.hmrc.gov.uk/

 

Hello,

If you register company it may help you to get more business if you work with the corporate clients. If you will have no more sales but increased taxes, increased overheads and you still work alone, then no needs to register a company... You should decide what advantages you will get by registering a company.

 

Register a company -- it's easy, use a company like Stanley Davies (http://www.stanleydavis.co.uk/) who take all the donkey work out of it for£30+VAT. That way all costs (hosting, domains etc.) can come out of pre-tax profit & your overall tax bill minimised.

The fact that your income comes from the US is not really relevant from a UK tax perspective.

 

You don't really need to register as a Limited company, but it is useful for tax deductable expenses.

 

MKInfo,

You have not mentioned about your existing site so it is difficult to guide you properly, since you are performing well in US you may consider to focus in same market by creating another site with relevancy of your existing site, say for example if you are dealing with jewellery you can consider to create a fashion or women oriented site.

 

How do you know all your money comes from US? That doesn't matter anyway with an ineternet site since you live in UK.

The best thing you could do is go and see a tax-officer and they are pretty good in UK and will help you a lot for no charge at all.

I personally don't see how registering as a LTD company can help you - you only register as a LTD company if the TaX laws require you to, like IT contractors can't be given a contract unless they're a LTD company.

You're basically self-employed or a sole-trader which is good enough for what you're doing. But still go and see a tax-officer.

Rod

 

he probably means adsense payments

I suggest sole trader/self employed. You can set it up over the phone, just call up the tax office and give a start date. they will then set you up and you can choose to setup a direct debit for the NI contributions.

come january you just fill in a self assessment online form which states how much you've earnt, any deductions such as expenses,advertising (text links ) etc and it works out your final tax bill which you can pay there and then by credit card. the tax return is going to be easy if all you do is adsense and will just be a years worth of cheques minus a years worth of hosting costs if you can't be bothered to do the deductions section.


as far as i know the only advantages of ltd company for internet type work is the limited liability stuff - if your business goes tits up and you owe a lot of money you can only lose the business, not your home, car etc. you'll also have to file yearly accounts etc for a ltd company which isn't too much hassle, but might not be for you.

which tax deductions can you use that sole traders can't?

 

how much is a registration of a company in U.K?

 

about £25 for a no frills registration (digital copies)

 

bochgoch wrote :

Um. It can be very relevant. In terms of income tax...it isn't relevant. But you are supposed to register for VAT if your income is over £64,000. However, if all your income comes from outside the UK and EU Zone, then you can earn as much as you like without ever paying VAT.

There's a bunch of stuff on the Customs and Revenue website about this but I can't find the right link right now.

 

Move to Spain, live there for 3 years and become 'not ordinarily resident' of the UK. All your internet income is then pretty much tax free as the Spanish won't bother to chase you for it. Also, if you're lucky enough to sell your site for a handsome profit then there's no capital gains tax to pay.

If you earn your income from the internet then you can work from almost anywhere.

This is based on personal experience.

 

Careful now, I hope you're not encouraging tax evasion

 

Not at all, it's actually difficult to declare an income to the Spanish if it's generated outside of the country/system. They just don't want to know.

 

Thanks for all the replies guys.Some very interesting stuff there I will need to research.

How does anyone in the UK know you are earning if,like I say,all money is coming from the USA Adsense and affiliates?

 

Because you will have records of the source of your income - like those little tear off slips on US dollar cheques and so forth.

 

What I'm saying is do the likes of Google etc inform the UK that I'm actually earning from them?

I.e does the uk taxman/autorities know I am earning money from the USA.

MK

 

If you put it into your bank account, then yes. Google won't inform the taxman, but as soon as they see you've got a steady and regular source of income, they'll ask for proof of income, and you'll have to pay tax on everything you've earnt x 4, because that's just what they do when you evade taxes.

 

tax in the UK must be paid on all income over a certain limit (about £4000 i think). evading that will see you in prison or with a hefty fine.

i personally would set up a limited company, and the file the return online every year for £15. Inital setup will vary between companies. i setup a company last year, you dont even need a company bank account - just continue straight to personal.

 

So how easy is it to set up a limited company?

Is there a step by step guide?

How expensive is it?