charlie

apart from the tax implications, what other advantages or registering as a business?
i can claim the VAT back but are there any other day to day activities that would be better for a "sole trader" or "limited" status?

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stevebrowne

You can run a limited company with registering for VAT.

In fact I think any business type: ltd, sole trader etc. MUST register for VAT if turnover is above a certain amount (£65k pa?)

Some companies treat you more seriously when you are a Ltd. Some affiliate networks have made noises about preferring to deal with Ltds., but to the best of my knowledge, none of them have done anything beyond making noises.

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monaghan

as mentioned, VAT is not just for Ltd companies, it is based on turnover not company status, even if you don't register as a Ltd you still have to register for VAT when you hit the current year's threshold.

The main benefit of Ltd for a small outfit is that the company becomes a separate legal entity which you would own / co-own, in the event of any serious issue the legalities would be against the company rather than you (although if you commit any very serious issues you could still be personally liable so it's not a complete get out of jail free card).

A VAT registered Ltd will generally be taken more seriously than a sole trader by other companies.

If in doubt go and speak to your accountant or financial adviser who will be able to give you proper advise.

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GreyWing

I am delimiting myself now ( I know not vat related) but benefits of that is that you can keep your accounts out of public view.

VAT is something to be avoided at all cost imo, the penalties for mistakes can be huge and prison time is a norm on that one. In fact they can lock you up without a phone call for 7 days the last time I heard.

That's apart from extra charges to your customers.

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