The client had a previous accountant that "kept him below VAT threshold" but obviously didnt and so HMRC are correct that he is over the threshold. It was a case of we picked it up from professional clearance documents and HMRC visited the client the next day.
HMRC wanted to remove all documents and the client wasnt in the position to give them all of those documents at that point because 1. he was working. 2. He would have to empty drawer upon drawer of paper work. I have said it may have been worth telling them to take what periods they are looking for. I suppose its a shame the client is so efficient with paper work.
I have asked HMRC to provide me with a copy of the notice provided to the client at the day of the visit and asked under sch36 what it relates to.
I think you misunderstood. In relation to Ltd v sole trader, tax is charged on profits so if it is a company you don't have a personal allowance, 20% corp tax. Sole trader, taxed on profits after personal allowance dependent on other income etc but the principal is you will lose out if you are a Ltd Company before going into higher rate tax band in profits. You can pay yourself a salary but it is not on the full personal allowance. It would be to the earnings threshold losing out on tax free cash. Maybe you should speak to a tax adviser before you make the first move. You will see the difference for yourself and be able to make an informed decision. I wouldn't jump into anything too quickly. Also Ltd Company can be formed on companies house website for 14 quid. Easy to do.
Agree with Stepurhan
You should be aware that it is only tax effective to become a Ltd Company if your income is going to be into HRT. Otherwise you are losing out on your personal allowance and will end up with less in your hand. It is not uncommon for accountants/tax advisers to have business advisers. I have recently set up myself also and am moving forward in a LLP with a Ltd company as a partner in the LLP. Upstairs for thinking. Let me know if you want to talk.
Best thing to do is to speak to an accountant or tax adviser.
They will register you for Self Assessment and as tom 123 says, you should apply for the Small Earnings Exception for NIC.
You will pay tax but the level is dependent on your income and expenses. There are certain things you can claim automatically and some that you will need the evidence for.
Depending when you started earning the income depends whether and when you need to register for completing a tax return. I would seek some advice on this first.
You would be better off using third party software. HMRC software has very basic uses and usually loses or breaks down half way through.
I worked in HMRC previously and the answer is that it doesnt make a difference but if you tick yes and dont submit, you will end up with a penalty.
Its the clients choice. These schemes are down to risk, along with certain other criteria, its either a hit or a miss.
You cant be guaranteed top spot in google ratings but you are right it is down to the individuals website being constructed and also help from another couple of bits like google analytics etc. There are lots of programs out there to help but you wont get anywhere near without a good website being constructed. Look at your h1, h2 and h3 tabs. The key is in there.
Was the investment used to buy shares in the company?
We have had to review every single clients needs because of HMRC changing the way their system operates.
I would suggest though, in your case, you arent operating PAYE, you are just paying wages that dont attract PAYE or NIC so in this case you dont need a PAYE scheme!
HMRC dont really care as long as there is no tax or NIC due. I worked for HMRC in the Employer Helpline before moving and this was the understanding throughout HMRC, although I understand what you are saying in the fact you are paying out wages and want to hit above the LEL but not above the ET so as to have a pension credit but not attract tax or NIC.
HMRC wont credit your clients NIC records unless you are doing a P35 (No P60 because there is no tax due) but there should be P11's.
Annual schemes are not rare at all. Never have been, HMRC know about low salary high dividends, its not rocket science, they just cant do anything about it.