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Hello

On behalf of a good friend, I would like to ask for some advice especially from those who have some direct personal or professional experience, please.

Mr A is a sole-trader/contractor in the building trade who also has some income from UK rental properties (approx. £15-25K PA net) and his highest rate of tax is usually the additional rate which was 50% and now is 45%. He also pays NI classes 2 & 4. In some rare years, his earnings may drop to the higher-rate tax band (40%) but usually he earns over £100K including the rental income. As a result, his tax-free personal allowance is drastically reduced or completely wiped out due to his earnings.

His ultimate plan is to work for a few more years, and then emigrate to Thailand but he will keep his UK rental properties

Will he be better off as a director of his own limited company or as a sole-trader, tax and NI-wise? Should he employ his wife who usually helps him with his paperwork as an employee or a co-director? My friend is afraid of the amount of paperwork and accountant's fees which are tax-deductible. What sort of returns do you need to file and how often? Monthly CIS? Annual Corporation tax return? VAT returns? Monthly and annual PAYE returns? Is it wise to do the monthly returns himself? What returns should he leave for the professionals?

Last but not least, what are the good and bad points of running a limited company?

I hope that my list of questions is not exhaustive. Thankyou very much in advance.

Dani
 
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