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Sole trader Vs Limited Company

Does anyone have advice on someone who is going to be running a chauffeur and Taxi business with a turnover of about £30,000 per annum.  There will be a limo and a taxi brought into the business as assets, as I have been asked if he should start as a sole trader or set up a Limited company.  Which would be the most tax efficient method?

I also wanted to know how the treatment of vehicles differ, depending on how he sets his company up. 

Many Thanks



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By Anonymous
25th Feb 2010 14:14

see an accountant

I suggest that the person who has asked you these questions should contact an accountant. There are numerous pros and cons. and even though the t/o is low proper advice at this stage can save numerous problems not to mention  tax


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25th Feb 2010 15:02

Interesting point on the vehicles

I was surfing the net a few days ago and noted that some accountants say on their websites that you cannot obtain full plant and machinery allowances on taxis. In the case of a black cab (and a stretched limo), I would assert that they are not cars for capital allowances because they are not the type of vehicle which is  used for private purposes.

I am not allowed to add a direct link but if you go to my site and search with the phrase "sole trader v limited company" you will find a guide.

Virtual tax know how for accountants:

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25th Feb 2010 22:13

it would appear that you need some assistance
Having read two posts from you with fairly basic accounting questions I would advise you to seek the help of an approp qualified accountant. I don't mean chartered or anything necessarily just someone who can help you with this sort of query. If you are hoping to advise clients yourself using only the advice of accounting web members you will find yourself in trouble.

Where are you based? I may be able to point you to someone who can help.

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26th Feb 2010 11:37

Response to D Bowler (Sole Trader Vs Limited)

Hello D Bowler

I appreciate your comment.  I am licensed AAT Member in Practice, providing Sole Trader services, and have just been approved to provide Ltd Co Book keeping work, and have had this added to my license, on the proviso that my Mentor sights the completed work I do.  Everyone has to start somewhere, and you can read up and do courses on many things, but until you actually achieve the work experience, It is I believe hard to feel sure footed on everything that you do.  

I am not relying on accounting web for my help, I just wanted to gain a few extra opinions before I speak with my Mentor.  Hope this clarifies why I am asking, and clarifies that I am not providing services I am unsure of, alone.  But thank you for your offer of local contacts.

-- Carolynne

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By Anonymous
26th Feb 2010 12:33


I hope that you do not take this posting as a criticism but I think you will find that a licence from AAT to do book-keeping for ltd companies does not extend to giving tax advice to ltd companies.

The questions that you are asking are accounting rather than book-keeping.

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