Ltd and sole trader at the same time

B

Bill90.

Registered User
Messages
59
Hi, just playing with ideas here and was wondering if anyone could advise me on the following.

I have 2 Rental properties paid off and rented out.

I drive a car for 4 different state/semi state agencies. All through the books of course.

As my Rental income has me in the higher tax bracket I feel I'm driving for little return as 50% of profits go to uncle Sam.

I was thinking about setting up the driving as a Ltd company and not drawing any wage from it and putting it all into a pension to avoid paying tax on it. Might retire in 15 years and could always draw a small salary if I ever needed it.

My question is, could I operate the driving as a sole trader and Ltd company at the same time. Say 2 agencies paid my Ltd company and the others I'd invoice as sole trader and pay tax as usual?.

Or would it all have to be either Ltd / Sole trader.

Driving brings in 30k a year profit. 6 hours a day 4 days a week. No nights or weekends.
 
If you are sole trader for driving and then add your rental income changing to limited will not really make a difference. You will pay the same tax if sole trader or limited. The difference is you pay tax as you get paid in a limited co. (pay as you go).
You can put money into a pension as a sole trader without going the limited route. There is more regulations as a limited. Do not forget if you set up as limited co. for driving then you have to decide if the car is yours or the business as you will have to pay bik on the vehicle if the co. owns it. It is expensive to close a limited co down.
Your accountant will charge more for limited than sole trader paperwork.
You need to chat to your accountant to see if it is worth it based on your turn over and when you plan to retire.
 
You must log in or register to reply here.
Back
Top