Limited Company Set up for Afffiliates Query?

[benc]

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Hi All

First Post - But been hanging around for a while, great forum and a very valuable source of info...

I have been dipping my toe into Affiliate Marketing for a while and started a bit seriously a few weeks ago.. I've spent about £120, generating about £1500 in 3 weeks using various tactics.

I think this is a pretty good return and actually I haven't really thought about the commercial/business/tax details. I know this will sound stupid:

1 - Should I set up a Limited Company?
2 - Set up a Business/Company Bank account?
3 - Have the Networks pay into the New Company Bank account?
4 - Sort the tax out...

99.999% of me is saying of course - but I was wondering if there's any less admin intense way out there.????

Can anyone recommend a Limited Company set up person/compnay?

Thanks

Ben

[pricethat]

You dont need a limited company to trade, having a company means more extensive accounting, you need a secretary and allsorts of rubbish.

You dont even need a company account as long as your books are ok, BUT in the interest of keeping the tax man happy, they want to see each penny move backwards and forwards. So they dont want to see your personal tesco shopping transactions.

Just get another account, put all money in and out through that and your fine, when you take money just transfer it to your personal account, that way the taxman can see all the money in and out, keep all your reciepts and your sorted.

Anything else is work for the sake of work. The idea of a limited company is to help promote growth, it allows people to move forward with limited liability and also provides a framework for shares etc, if your trading such small amounts of money it all seems hardly worth it, especially as you dont have any real liabiliaties.

[Green2K]

If you're going to be serious and make proper money, get a Ltd company.

Say you have a good year and make £500k profit. If you're a sole-trader that is taxed as "income" and you pay 40% tax on the majority of it.

As a company you pay corporation tax at a lower rate (only 19% up to £300k profits, then 30%) and only then pay personal tax when you take cash out of the company (salary or dividend)

Assuming you don't need all £500k in one year to spend this makes it much more tax efficient. Taking the £500k profit as an example you could then take out approx £32k dividends tax free from the company each year because you get credit for having already paid corporation tax on it.

There are lots of other advantages. Costs are minimal, under £100 one-off to get setup and around £300 to £1k+ for your accounts depending on how much work there is. Your "secretary" can be anyone (brother / sister / mum / dad / better half).

(disclaimer: I'm not an accountant)

Green2K.

[renegade]

Having started as a sole trader and now running a Ltd company it doesn't make a lot of diference either way.

If you're going to go over the VAT threshold I reckon that's more aggro than the difference between being a sole trader or running a Ltd company.

It all depends on your personal situation so speak to an independent financial advisor.

As a sole trader I used to pay voluntary NI contributions, as an employee of my own company I get a pay slip and pay NI and Tax like everyone else which could be handy if I wanted to get a mortgage or loan but I can't think of any other advantage.

Speak to an independent financial advisor because nothing I've said should be taken as advice.