Taxation, Money & Where to get it

Public Limited Company

Google definition:

noun: public limited company; plural noun: public limited companies
  1. (in the UK) a company registered under the Companies Act (1980), with statutory minimum capital requirements and shares offered to the public subject to conditions of limited liability.

A PLC is often a large, well known business that has a high turn over of products. They are required by law to publish all of their financial positions to the public, allowing traders and share holders to see their true worth. Its stock is offered to the public often on the stock market, such as London Stock Exchange, but also privately, or through an initial public offering. When a PLC beings, it is like any other company but 2 or more people are required to form it. To have a PLC, the company secretary must be a qualified person, where as with a Private Limited Company, the secretary does not.

Advantages to having  PLC are:

  • Better access to capital
  • Shareholders are easily allowed to buy and sell their shares
  • Prestigious
  • Value of shares increases

“Disadvantages:

  • Once listed on a stock exchange, the company is likely to have a much larger number of external shareholders, to whom company directors will be accountable
  • Financial markets will govern the value of the company through the trading of the company’s shares, and will represent the market’s view of the company’s performance over time
  • Greater public scrutiny of the company’s financial performance and actions”

http://www.tutor2u.net/business/reference/public-limited-companies

Read more: Public Limited Company – PLC Definition | Investopedia http://www.investopedia.com/terms/p/plc.asp#ixzz4OZG7FZvH

http://www.bbc.co.uk/schools/gcsebitesize/business/aims/limitedcompaniesrev3.shtml

https://www.gov.uk/business-legal-structures/limited-company

http://www.businessdictionary.com/definition/public-limited-company.html


LTD

Google definition:

“In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. The former may be further divided into public companies and private companies.”

“a private company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested.”

To become a limited company you have to have a director who runs the business on paper. Their responsibilities are to ensure the company meets all obligations and runs along the Companies Act 2006, including health and safety regulations. They are responsible for filing company accounts, Tax, National Insurance and PAYE obligations, and VAT returns depending on the turnover. The persons credibility will increase by becoming an LTD, and will also protect you from personal loss if the company has debt. By having better tax regulations, profit will also increase.

http://www.brookson.co.uk/working-options/why-work-as-a-limited-company/

http://www.sjdaccountancy.com/information/advantages_disadvantages_limited_company.html

http://www.bytestart.co.uk/limited-company-advantages.html


Sole Trader

Google definition:

sole trader

noun

British
noun: sole trader; plural noun: sole traders
  1. a person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses.

Becoming a sole trader is the smallest and simplest business to set up. But there are significant advantages and disadvantages compared to the other ways. As a sole trader, you run your own business with no shares or public publishing. You keep all your business profits after tax, and can still employ people (sub-contract), but you are personally responsible for all your business loss’s, meaning you have no protection over personal belongings that you fully own.

You must send a self assessment tax return every year, pay income tax on profits and pay national insurance. You must register for VAT if you expect to take over 83,000 a year.

Advantages

  1. The firms are usually small, and easy to set up.
  2. Generally, only a small amount of capital needs to be invested, which reduces the initial start-up cost.
  3. The wage bill will usually be low, because there a few or no employees.
  4. It is easier to keep overall control, because the owner has a hands-on approach to running the business and can make decisions without consulting anyone else.

Disadvantages

  1. The sole trader has no one to share the responsibility of running the business with. A good hairdresser, for example, may not be very good at handling the accounts.
  2. Sole traders often work long hours and find it difficult to take holidays, or time off if they are ill.
  3. Developing the business is also limited by the amount of capital personally available.
  4. There is also the risk of unlimited liability, where the sole trader can be forced to sell personal assets to cover any business debts.

https://www.gov.uk/business-legal-structures/sole-trader

http://smallbusiness.co.uk/what-is-the-definition-of-a-sole-trader-and-being-selfemployed-254775/


Many photographers will only ever set up as Sole trader or LTC. To start off with, it is easier and better to manage to be a Sole Trader, in terms of tax and paperwork. Although you have to ensure you get your funding from a source that you can pay back, as if your company goes bust you will have to pay back all funding, and debts by yourself, will personal belongings liable.

“Many people prefer to operate as sole traders rather than limited companies because the start-up and running costs are perceived to be significantly lower. However, you can form a limited company from as little as £15, so the price of setting up a company really is minimal.” http://www.bytestart.co.uk/limited-company-advantages.html


Getting Help

  • Small business advisor at your bank
  • Government busines support helpline

Funding

  • Self funding
  • Family/ friends assistance
  • Small business grant
  • Small business bank loan

When starting up your business, it is significantly safer if you can self fund or gain assistant from a friend or family member. As banks expect a return of interest, you will be gaining a loss. If you are a sole trader and you work at a loss, you will still be expected to pay the banks, with the interest on top, each month, and if you don’t, they can take your belongings. Where-as family/friends, will be more understanding, and can be more flexible with the repayments.


Pricing your work

It is important to price your work at the right price. You dont want to charge too much so you dont get work, but want to do your work justice and cover all travel, time and camera costs. The London free lance guide is one of the best bases to find prices which are on level with most other photographers that are self employed. Also from this, people who commission you can find out what kind of price to expect to pay for each section.

http://www.londonfreelance.org/feesguide/index.php?language=en&country=UK&section=Welcome

https://www.the-aop.org/information/downloads/legal-business-forms
AOP guidance on setting a day rate

AOP suggests that if you combine the cost of you doing business, including rent of studio/office, insurance, internet ect, and include living costs including food, rent/mortage, clothing ect. Then divide this between the amount of working days each year, you can work out a base rate. Then add profit on top of this.

Expenses

Along with wages, expenses are important to ensure your wages aren’t going on your travel costs. They are hard to work out, as many employers wont guarantee to pay your expenses, so often it is something you have to ask for. Often an agreement can be signed to ensure expenses.

https://www.gov.uk/expenses-if-youre-self-employed/overview

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