Many thanks I believe there is some worries over Franchise agreeement problems which is why lawyers want to ensure words "going concern" and "goodwill" are not mentioned in contract. But I have pointed out this does not effect the VAT treatment. I note your comments re Customs treatment in practice and think you are still correct thought they are all so desperate for monies now not sure I would want to trust them! I have also suggested that the accountants who have expressed an opinion do so in writing to make them review the rules a bit more carefully!
Glad I am not going crazy Thanks again
Hi MalcolmThe working from home did not make the mileage high, but did help the % as found even a small daily home to work trip messes up the % quite quickly.
In year one I doubled my motor deduction compared with the 40ppm claim and year two looks even better (major problem with a german sports car engine, and mpg issues!) Anyone who thinks 40p a mile is fair is driving a far more sensible car than me or most of my clients!
The use of home as office claim, enabling me to include mortgage interest/repairs to house/etc as opposed to the basic £2 pw suggested by HMRC, savings could be huge, dependant on circumstances. ( I am aware there are ways of upping the company charge but there are often drawbacks and added complexities to these)
Overall, with a large mortgage, and unpractical cars I estimate my accounts have about £6000 more expense in them than I could easily claim through a company.
I'm only chucking this in (as my first ever entry!) as too used to seeing competitors too readily incorporating everyone without considering the circumstances fully.
One should not forget the ease of running as a sole trader, no PAYE/PIID, no companies house, one less tax to deal with, and no problems with invoice details for VAT etc... Fine if your charging your client for it (not always so easy to convince them to pay!) but this is your own time you're potentially wasting.
Finally back to original question. Why not run your consultancy through a company and your normal accountancy through a soletradership. If planned carefully get the benefits of both worlds. Can work really effectively but care needed on joint costs etc...James
Cars and Use of HomeI'm glad to see the car being brought into the arguement. I started as a sole trader some three years ago, as trading from home, the business percentage is high, the car is not CO2 friendly (but low mileage!) nor cheap to run. The tax savings at present as a sole trader are much larger than the corporate savings route.
Also, more recently, the change in view of "use of home as office" expenses for unincorporated traders by HMC&E has allowed a useful chunk of the mortgage etc.. to keep the tax bills down which would be near impossible/difficult to get via a company.
I wouldn't rush to incorporate. Asking a few larger competitors recently the general trend with new business' generally is to incorporate less then a few years ago.James
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