Off Topic summer or winter tyres?

Discussion in 'Hull City' started by Geo10, Oct 27, 2017.

  1. Geo10

    Geo10 Well-Known Member

    Joined:
    Aug 10, 2011
    Messages:
    4,116
    Likes Received:
    1,742
    random I know but what are the pro’s and cons of both?
     
    #1
  2. Barchullona

    Barchullona Well-Known Member

    Joined:
    May 20, 2012
    Messages:
    22,478
    Likes Received:
    9,274
    #2
    Geo10 likes this.
  3. augustatiger

    augustatiger Well-Known Member

    Joined:
    May 16, 2011
    Messages:
    1,484
    Likes Received:
    391
    Much to involved for a board like this,Google it and you will find plenty of factual sites.D pends on the business you are in.I would go company every time .
     
    #3
    Geo10 likes this.
  4. ImperialTiger

    ImperialTiger Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    7,700
    Likes Received:
    2,524

    Depends what you are doing. Back when I was an accountant a decade ago, the tax incentives for forming a limited company far outweighed the downside. Everything I mention relates to then and may not relate to now.

    A company limits the directors' liability (it makes the company a separate legal entity to the business) so unless you do something dodgy, you can't be sued for any of your personal assets (your house etc.) It also allows you be more efficient with your tax matters (you can draw a salary equal to the personal allowance (about £11k?) and draw down the rest of the profits as dividends (these use to be tax-free until you got the higher rate tax band but I think they cost a bit of tax these days). The profits can be drawn over several years as salary if you retire and your income is below the personal allowance. You used to be able to have a spouse as a fellow director and do the same with them (you could get about £80k out of a company a year with a married couple, although they were cracking down on "ma and pa" operations). The company pays corporation tax which was always much lower than PAYE income tax.

    Downside of a company is the extra regulatory costs of an accountant preparing statutory accounts. If you keep good records then this should only be a few hundred quid a year and is a lower cost than the tax saving from incorporating.

    If you are confident about the business being profitable then you can start it as a sole trader. Then when you incorporate it into a company, the value of assets less liabilities becomes a directors' loan account, effectively the same as Allamhouse is owed by City.
     
    #4
    GLP likes this.
  5. Mr Hacker

    Mr Hacker Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    30,819
    Likes Received:
    8,964
    Depends what you're thinking of doing.
     
    #5
  6. Geo10

    Geo10 Well-Known Member

    Joined:
    Aug 10, 2011
    Messages:
    4,116
    Likes Received:
    1,742
    It’s the liability thing that I don’t understand, if your a ltd company and it goes wrong then the liability is just the assets but as a sole trader your house is at risk etc?
     
    #6
  7. ImperialTiger

    ImperialTiger Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    7,700
    Likes Received:
    2,524
    It's the separation of legal entities. A company is a separate legal entity to the director. As a company, the company gets sued. This is limited to whatever the company has by way of assets. As a sole trader, you are the legal entity. If something goes wrong, you get sued. You are then liable to all your assets, whether they are used in the business or not.

    Edit: try here.

    http://www.rossmartin.co.uk/startin...v-limited-company-key-tax-a-legal-differences
     
    #7
  8. The Omega Man

    The Omega Man Well-Known Member

    Joined:
    Feb 20, 2011
    Messages:
    6,570
    Likes Received:
    2,264
    There are pros and cons for both. It really depends on what your business is.

    Too many think that they are protected by the company and then they go and give personal guarantees for loans and credit.

    By the way ... anyone fancy buying an Ice Cream Parlour. I have one for sale on my website.
     
    #8
  9. Mr Hacker

    Mr Hacker Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    30,819
    Likes Received:
    8,964
    Well it depends. If you've taken loans with personal assets as security then obviously that's all still at risk, but otherwise yes it's just the companies assets at risk. As a sole trader you are the business so everything you own is security. Though in contradiction to what imperial said (and he would know better) I always thought there were tax benefits to being a sole trader and it was cheaper to operate that way. Never worked as one so I wouldn't know.
     
    #9
  10. Geo10

    Geo10 Well-Known Member

    Joined:
    Aug 10, 2011
    Messages:
    4,116
    Likes Received:
    1,742
    My accountant has told me of the increased costs in preparing the accounts etc and he’s also told me been a ltd company doesn’t mean your house etc isn’t at risk.

    I’ll tell you why I ask before you all think I’m upto something dodgy.

    I sell Tyres new and partworn, now I have liability insurance but only on new Tyres not the partworns. I’ve often wondered what happens and how liable iam if a partworn tyre blows out down the road.

    Secondly I’ve recently been the victim of someone using a cloned credit card to buy Tyres over the phone. As it was over the phone I have not protection and now the visa company want the money back, we agreed an arrangement on Tuesday for me to pay it back. They’ve now changed their mind and renaiged on the arrangement. So at the minute I’m 4k out of pocket and I feel like telling them to shove it
     
    #10

  11. ImperialTiger

    ImperialTiger Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    7,700
    Likes Received:
    2,524
    The only benefit I can remember to being a sole trader is if your turnover is low. I once did a spreadsheet for my boss and I think the break-even for incorporating was somewhere around £35-40k. This basically came down to the difference between income tax and corporation tax vs. the professional costs of preparing accounts.
     
    #11
  12. ImperialTiger

    ImperialTiger Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    7,700
    Likes Received:
    2,524
    If we are talking about £4k then it's probably not worth incorporating. It probably comes down to your liability insurance and what is covered. If you sell tyres that you know are substandard and cause an incident then incorporation may not save you.

    Edit to add: I don't know how someone would prove fault regarding tyres (they could have been legal when sold but someone used them beyond their legal minimum).

    DISCLAIMER.
    ***This is not financial advice. Seek advice from a professional***
     
    #12
  13. Geo10

    Geo10 Well-Known Member

    Joined:
    Aug 10, 2011
    Messages:
    4,116
    Likes Received:
    1,742
    I’m careful what I sell partworn but I suppose it’s like anything second hand there’s scrapyards everywhere selling secon hand parts I just wondered if I had more protection as a ltd company.

    I’m just trying to sort things out as I feel I’ve been stitched up by the visa company who handle my transactions
     
    #13
  14. Mr Hacker

    Mr Hacker Well-Known Member

    Joined:
    Jan 24, 2011
    Messages:
    30,819
    Likes Received:
    8,964
    Don't sell part worns, they're really not worth your time anyway are they.

    You might even lose proper business by dealing in part worns. Some people just think they're cheap and dodgy and therefore the trader must be... if he's willing to dabble in them.

    Now if penniless Pete from down the road comes in you can always say "well I took this one off a car earlier that looks alright, 10er cash and it's yours"
     
    #14
  15. Geo10

    Geo10 Well-Known Member

    Joined:
    Aug 10, 2011
    Messages:
    4,116
    Likes Received:
    1,742
    To be honest hat these things come into the country in there thousands each week, sometimes they can be hard work. Profit wise they can be as much in one as a new tyre, there is a market for them
     
    #15
  16. The Omega Man

    The Omega Man Well-Known Member

    Joined:
    Feb 20, 2011
    Messages:
    6,570
    Likes Received:
    2,264

    All of your trade agreements with the tyre wholesalers will require personal guarantees.

    For 4K the worse that can happen is that you get a ccj and before one is issued you have a right to mediation. You will have enough time to get the payment sorted before it goes anywhere.

    PM me if you want and we can have a chat on Monday.
     
    #16
  17. originallambrettaman

    originallambrettaman Mod Moderator
    Staff Member

    Joined:
    Jan 24, 2011
    Messages:
    92,578
    Likes Received:
    36,088
    Never give personal guarantees.

    Ever.

    You shouldn't ever need to give them, I supply hundreds of shops and I've never asked anyone to personally guarantee. Frankly, if someone agreed to one, I'd figure they didn't know what they were doing and it would make me nervous about supplying them.

    Unless a business is absolutely tiny, a limited company is the best option, as it offers far more protection and additional benefits, as Imperial has outlined.

    I'm no expert on tires, but for you to be liable if someone had an accident due to the tyres you'd sold them, I'd assume that it would have to be proven that you were negligent and knowingly someone dangerous goods.

    As for the credit card, you'll just have to put it down to experience, it will need to be repaid and it wouldn't matter if you were a sole trader or a limited company. Unless the business is heavily in debt and has no money or assets, you wouldn't wind it up just to avoid a £4k bill.
     
    #17
  18. Geo10

    Geo10 Well-Known Member

    Joined:
    Aug 10, 2011
    Messages:
    4,116
    Likes Received:
    1,742
    I’m just annoyed they’ve changed there mind on the arrangement we made whilst still holding 1200 in transactions from earlier in the month
     
    #18
  19. Urika Peece.

    Urika Peece. Well-Known Member

    Joined:
    Dec 15, 2012
    Messages:
    4,592
    Likes Received:
    2,191
    I know a couple of R Sole traders if that helps.
     
    #19
  20. Duffens_Briefs

    Duffens_Briefs Well-Known Member

    Joined:
    Jan 27, 2011
    Messages:
    5,207
    Likes Received:
    1,510
    Trading as = higher personal liability....Ltd = less liability as your limited....For current up to date information see someone who knows what they're talking about ie local chamber of commence, or such like.
    If trading as, put your assets into someone else's name in case the business goes pop.
     
    #20

Share This Page