I’m so grateful for you and the content you create for us Nischa. You’re not a gatekeeper and help to educate us on matters we don’t quite understand. Thank you and hope all is well
Hi Nischa, I can vouch for everything in this video; very well presented. I started as a sole trader 16 years ago and formed my LTD company 12 years ago. Never needed to borrow money to grow, but being LTD company has definitely opened up opportunities with bigger corporate clients. Thanks for continuing to share good independent information.👏
Hi Nischa, given that debanking has become more of an issue in the media, could you do an video on dealing with this? This is an issue that effects people on benefits all the way up to peers in the House of Lords; I rent a space out for a mental health charity with local government ties and contracts in good standing, and we've had the problem too. A section on market research would be of particular benefit to people, I think, because different branding doesn't mean they're not part of the same banking group. @@nischa
Fantastic comparison between limited companies and sole traders! On Ready Set StartUP UK, our contestants have faced similar questions when deciding how to structure their businesses. This kind of clarity really helps in those early stages-especially when weighing up tax efficiency and liability concerns. Great content!
5:05 Why is your company paying Corp. Tax on revenue before it's paying you as an employee a monthly wage? Surely wages would count as a business expense and expenses are paid before tax? Company pays you a wage before it pays tax > you the individual is then taxed on that income > business pays Corp. Tax after expenses > dividends are paid out of profits > you pay dividend tax depending on your tax bracket.
Yep, that's right - you're paying corporation tax on profit and not revenue. Income tax is only on your salary/what you draw out (or dividend tax depending on the structure), you don't pay the corporation tax on that. The example assumes you've kept it all in your company
Thank you very much, I was a sole trader for years, until I got ill. I never had this subject explained to me in a manner I could easily understand fully. Amazing 👏
The public record thing is what’s keeping me from registering as a ltd company. My father was an accountant for 45 years, and he said he had quite a few people having had their identities stolen through their details being on Companies House and part of public record.
Wow, you are almost at 1M with less than 100 videos 😊 you are so intellectual and eloquent, I have learned so much from watching your videos. Thank you😊
Good video, however you’ve missed one very important point. If you were to extract the profits from the LTD ie pay yourself a salary etc you end up paying double taxation. 25% corporation tax, followed by either tax on dividends or income tax. Therefore you end up paying significantly more especially if you’re a Higher Rate Tax Payer.
Thank you for the insights, Nischa! Very helpful. If I may add that another key difference is insolvency/bankruptcy proceedings. In the case of a sole trader, several jurisdictions provide for the liquidation of personal assets, which is an aspect to consider before assuming big risks!
She must be talking about UK law. Because in the US each state is different. In Florida we have C and S Corporations and LLC's. Delaware is the easiest for out of state companies to in incorporate.
Hi Nischa! I enjoy your videos. Can you please make videos about stock exchange, investing in company shares etc..making money from money..where do we start? What do we need? Thank you!
Awesome info great explanation there, it's not in super-super detail but it's breaked down pretty much very nicely which helps in better navigation; although consulting a professional advisior is always better to make more proper decisions!
What about employees and partnerships? How would that work? How can you pay employees if a sole trader or Ltd company? What is a partnership (it seems some businesses such as eBay don't seem to know what a partnership is).
Hey, have you done a video about partnerships? Me and my wife are both horticulturist, both currently sole traders, would it be easier in a partnership? Thanks
If the person is interested in taking all/most of the money out from the Limited Company, then they would pay corporate tax + income tax, isn’t it worse than just paying income tax as a sole trader when the amount of money is £200K+ per year
You can take money out of your company as a salary or dividends. Salary is taxed differently from dividends. If you take it out as salary it is an expense to the company and reduces corporation tax. But at the same time you’d pay higher income tax rates. If you take it out as dividends, this would be out of profits, after corporation tax has been paid. However the dividend tax rates are lower. A common strategy is to withdraw part salary and part dividend to minimise tax.
How are you saving money by paying corporation tax rather than income tax? Since surely you still need to pay income tax (or tax on dividends) when taking money out of the company? If you never pay yourself out of the company then what’s the point of having a business?
Great video. I could have used simple advice like your videos in my past when setting up as a sole-trader (I paid for advice - which was fine, but every bit of information helps). I am interested to invest in this Pilates Ltd, sounds promising 😄
Can I register a limited company with my visitor visa? If so, what kind of business can I run? If not then what kind of problems I have to face if I register?
Hey Nischa, in regards to owning a portfolio of property is it better to have that property in a ltd company or just own them yourself as an individual?
If im starting a business with another person but we arent taking profits and just reinvesting all profits back into the business, what would be the best option for the type of business we register as? Thank you!!
Hi Nischa , please do I have to apply for a new UTR I am food delivery driver last year tax but now a taxi driver this year April or how can I change my job delivery driver to taxi driver with HMRC I am confused
Hey Nischa, thanks for the video but surely that tax implications section here is a little overly simplistic and assumes that the example case doesn't need to spend any money personally beyond their £12,750 personal allowance? If the person needs to pay for things (mortgage/childcare etc.) or wants to put money into personal savings surely the tax calculation completely changes?
No, it doesn't at all This is simply describing what happens with any and all money, it has nothing to do with what that money needs to do You pay for things after taxation, not before
This is leaving out a shocking amount of detail on how LTD taxes are calculated and is VERY misleading! Where does the 25% come from? I pay 8% up to 50k then 33% above that?!
A third option will be to move into a more friendly tax country. If I will generate 1 mill+ in profits/year have no sense whatsoever to pay 400k or more in taxes when just by moving to a sunny place with a 10 to 20% tax for the same amount of money, will save you a lot on the long run.
I’m so grateful for you and the content you create for us Nischa. You’re not a gatekeeper and help to educate us on matters we don’t quite understand. Thank you and hope all is well
Hi Nischa, I can vouch for everything in this video; very well presented. I started as a sole trader 16 years ago and formed my LTD company 12 years ago. Never needed to borrow money to grow, but being LTD company has definitely opened up opportunities with bigger corporate clients. Thanks for continuing to share good independent information.👏
Congrats on the growth!
Hi Nischa, given that debanking has become more of an issue in the media, could you do an video on dealing with this? This is an issue that effects people on benefits all the way up to peers in the House of Lords; I rent a space out for a mental health charity with local government ties and contracts in good standing, and we've had the problem too. A section on market research would be of particular benefit to people, I think, because different branding doesn't mean they're not part of the same banking group. @@nischa
Is this your Ai Avatar? If it is congrats on the automation
Hi Nischa, what ethnicity are you?
@@nischa Nischa you forgot to mention the increased accountancy charges that come with going limited.
Fantastic comparison between limited companies and sole traders! On Ready Set StartUP UK, our contestants have faced similar questions when deciding how to structure their businesses. This kind of clarity really helps in those early stages-especially when weighing up tax efficiency and liability concerns. Great content!
5:05 Why is your company paying Corp. Tax on revenue before it's paying you as an employee a monthly wage? Surely wages would count as a business expense and expenses are paid before tax?
Company pays you a wage before it pays tax > you the individual is then taxed on that income > business pays Corp. Tax after expenses > dividends are paid out of profits > you pay dividend tax depending on your tax bracket.
Yep, that's right - you're paying corporation tax on profit and not revenue. Income tax is only on your salary/what you draw out (or dividend tax depending on the structure), you don't pay the corporation tax on that. The example assumes you've kept it all in your company
Thank you very much, I was a sole trader for years, until I got ill. I never had this subject explained to me in a manner I could easily understand fully. Amazing 👏
You're always pop up in the right time Nischa :) Meet you soon for the podcast!! :)
The public record thing is what’s keeping me from registering as a ltd company. My father was an accountant for 45 years, and he said he had quite a few people having had their identities stolen through their details being on Companies House and part of public record.
I have had a 10 year struggle due to exactly this!
Kidnapped too
Thanks for sharing this in such clear and concise ways that we can all understand, it's been super helpful!
Thank you so much for making these things that seem complicated easier to understand.
Wow, you are almost at 1M with less than 100 videos 😊 you are so intellectual and eloquent, I have learned so much from watching your videos. Thank you😊
Good video, however you’ve missed one very important point. If you were to extract the profits from the LTD ie pay yourself a salary etc you end up paying double taxation. 25% corporation tax, followed by either tax on dividends or income tax. Therefore you end up paying significantly more especially if you’re a Higher Rate Tax Payer.
You've ignored National Insurance considerations
@@ccefc85c18what are the national insurance considerations ?
Superb description!
Thank you for the insights, Nischa! Very helpful. If I may add that another key difference is insolvency/bankruptcy proceedings. In the case of a sole trader, several jurisdictions provide for the liquidation of personal assets, which is an aspect to consider before assuming big risks!
Id love to see you on the Diary of a CEO podcast
ok so that's what you have to do as a limited company, I am always being told to register my businesses with company house
Perfect starter video 🙏🏾
Great video - thankyou Nischa!!
Hi Nischa, commenting to show appreciation. Thank you, keep up the good work!
The paused picture at 3:46 is on point 😂
Thanks I’m actually going to be starting my own company and was thinking about this.
She must be talking about UK law. Because in the US each state is different. In Florida we have C and S Corporations and LLC's. Delaware is the easiest for out of state companies to in incorporate.
Yes, of course she is lol
Hi Nischa! I enjoy your videos. Can you please make videos about stock exchange, investing in company shares etc..making money from money..where do we start? What do we need? Thank you!
Fantastic video, commenting to show appreciation and give back :) thank you - really solid advice.
Great info and very well presented - I subscribed Nischa :)
Awesome info great explanation there, it's not in super-super detail but it's breaked down pretty much very nicely which helps in better navigation; although consulting a professional advisior is always better to make more proper decisions!
What about employees and partnerships? How would that work? How can you pay employees if a sole trader or Ltd company? What is a partnership (it seems some businesses such as eBay don't seem to know what a partnership is).
Thank you for sharing helpful content. Did this mean that a kimited company makes more sense around the 50k mark?
Thank you for a clear explanation
AMAZING VIDEO AS ALWAYS.....THANKS VERY MUCH 💯
Hey, have you done a video about partnerships?
Me and my wife are both horticulturist, both currently sole traders, would it be easier in a partnership?
Thanks
What a brilliant video
Thanks
If the person is interested in taking all/most of the money out from the Limited Company, then they would pay corporate tax + income tax, isn’t it worse than just paying income tax as a sole trader when the amount of money is £200K+ per year
You can take money out of your company as a salary or dividends. Salary is taxed differently from dividends. If you take it out as salary it is an expense to the company and reduces corporation tax. But at the same time you’d pay higher income tax rates. If you take it out as dividends, this would be out of profits, after corporation tax has been paid. However the dividend tax rates are lower. A common strategy is to withdraw part salary and part dividend to minimise tax.
@@IncomeBoost42dividends are taxed massively now also
And what system do i need or what employee i need to do all my paper works so i dont make mistakes?
Thought you stopped releasing on Sundays 😢 My Monday morning just got even better 😊
:))
How are you saving money by paying corporation tax rather than income tax? Since surely you still need to pay income tax (or tax on dividends) when taking money out of the company? If you never pay yourself out of the company then what’s the point of having a business?
Super Helpful Luv For Sharing This Info Gangy
I bought a laptop under my own name not my company name but I use it to literally run my business? How can I claim it as tax deductible ?
Just send the money over to your personal account. Allocate the laptop to a business expense on the P&L account
Keep the receipt just in case
Done
Great video. I could have used simple advice like your videos in my past when setting up as a sole-trader (I paid for advice - which was fine, but every bit of information helps). I am interested to invest in this Pilates Ltd, sounds promising 😄
Love your contents! Can you do a video detailing how one can setup a cooperate?
Thanks for the video.
Any external resource on how to access limited companies’ results?
Thank you Nischa - amazing video as always.
Can I register a limited company with my visitor visa? If so, what kind of business can I run? If not then what kind of problems I have to face if I register?
so which one are you using? sole trader or ltd company? I'm considering this too. 🤔
Would you mind doing a video on LLC and LLP too?
Hey Nischa, in regards to owning a portfolio of property is it better to have that property in a ltd company or just own them yourself as an individual?
Hi Nisha what the best option would be for selling clothes on -line for buy to let investor who own properties in their names.
Great video. I am thinking of going down the partnership route. Would LLP be similar benefits to LTD?
If im starting a business with another person but we arent taking profits and just reinvesting all profits back into the business, what would be the best option for the type of business we register as? Thank you!!
great advice thanks alot
Thank you for helpful video can you or anyone suggest income amount as sole trader whereby it’s best to then switch to ltd company in uk?
Hi Nischa , please do I have to apply for a new UTR I am food delivery driver last year tax but now a taxi driver this year April or how can I change my job delivery driver to taxi driver with HMRC I am confused
Also what do you think of quick books
LLC in Cayman Islands will do the trick.
Which Mic are you using to record audio?
Informative - Thank-you
Hey Nischa, thanks for the video but surely that tax implications section here is a little overly simplistic and assumes that the example case doesn't need to spend any money personally beyond their £12,750 personal allowance? If the person needs to pay for things (mortgage/childcare etc.) or wants to put money into personal savings surely the tax calculation completely changes?
No, it doesn't at all
This is simply describing what happens with any and all money, it has nothing to do with what that money needs to do
You pay for things after taxation, not before
Thanking you kindly :)
Pilates limited is my next business idea 😎
🤣🤣🤣
I’ve decided to follow
This is leaving out a shocking amount of detail on how LTD taxes are calculated and is VERY misleading! Where does the 25% come from? I pay 8% up to 50k then 33% above that?!
A third option will be to move into a more friendly tax country. If I will generate 1 mill+ in profits/year have no sense whatsoever to pay 400k or more in taxes when just by moving to a sunny place with a 10 to 20% tax for the same amount of money, will save you a lot on the long run.
Very helpful. Thanks
What's are your charges babe
184 Beier Cliff
There you are 😊❤
Bit late, but I'm here!
@@nischa where?
where?
And now I know.
8:58
Thanks my tamil friend
Mam do you earn 150k pound sterlings a year in UK? Plz reply. Thanks a lot.
This Beautiful woman is a Gem!
you look so beautiful..
I only watch this because she’s so damn pretty 🤩
UNITED KINGDOM🇬🇧🇬🇧🇬🇧
Fraud Fraud Fraud. Nischa and RarityAce is a fraud! Give me my money back!
SOLE TRADER is gambling. SOLE TRADER is not a investor.
I am Alvaro from Oakville, ON. I like Singapore Lego. Lettuce be friends. Would Nischa type Jedi to H. Jesus? It is my youtube account.