Limited Company?

Posted by Bex PM | on Wed, 22/02/2012 - 20:46 438 2 comments | report

My husband is the tenant of a fishing lake and pays an annual fee to the landlord. He will be selling tickets to allow other people to fish on the lake and will incur a few expenses along the way. We are only talking about a few thousand pounds a year so not large amounts.

Is he better off setting up a limited company rather than accounting for this through self assessment?

Comments

Self assessment

petersaxton | Wed, 22/02/2012 - 21:16 | Permalink

It would be a lot cheaper not having a limited company but I would suggest he has adequate insurance because he wouldn't have the protection of limited liability.

Limited company

danbr1990 | Wed, 22/02/2012 - 22:47 | Permalink

It can be cheaper to set up a limited company in the long run as you won't have to pay NI payments if you withdraw money from the limited company as a dividend. But as petersaxton says it will be more expensive (and difficult) to administrate so you have to work out if the potential tax savings (only paying 20% CT on profits in limited company, presuming you don't withdraw more then the higher tax rate as you will incur extra tax of 12.5% on your personal tax return) will out weigh the extra limited company cost.

Other benefits can be limited liability of debts and removing the business from any other personal business of your husband.