Planned 2022 Purchases

[doobin]

I should probably mention I did a 4 yr honours degree in business studies

I more the understand comercial risk but manage it. I'm fully insured against getting sued by customers or clients.
I'm always making sure that we don't go into too deep with 1 customer or 1 job thus spreading the risk. I would say we would have a 1 company every 2 years go bust and due me money.

In a quite old fashioned way I would hate to liquidate a company and be due money or wages though it dosent seem to bother some folk round here.

I'm making the move to LTD as it's getting to the point where I have other assets outside of the business that might be worth someone going after. I'm not worried about going bust because I owe people money, more being sued because I make a mistake that isn't covered under the insurance. I have a friend going through this- he had a subby slip over and break his ankle on a job years back. Just before the statue of limitations, he gets a letter from a no win no fee solicitor. Insurance don't want to know as he never informed them way back when. Tells me his solicitor reckons it'll cost him £70k.

I think there might also come a point (although I'm not there yet!) when you don't want to buy any kit for a bit- maybe saving for a big purchase. Being able to leave the money in the company as retained profits, subject to just corporation tax, might be helpful.

I'm like you in that I've not paid much tax ever, such a big capital pool to claim against.

 

[DaveDCB]

what Doobin says, it’s almost worth running the Ltd company at break even (ie pay yourself well and just pay the stupid tax rate etc) bang everything on finance/lease then if something goes wrong it owes you nothing, hand all the kit back and walk away with no loss… unless your personally held responsible I’m not sure what happens then anymore.. I know afew very big outfits that are going this way now, all previously owned everything outright. Times a changing

 

[dod]

I'm making the move to LTD as it's getting to the point where I have other assets outside of the business that might be worth someone going after. I'm not worried about going bust because I owe people money, more being sued because I make a mistake that isn't covered under the insurance. I have a friend going through this- he had a subby slip over and break his ankle on a job years back. Just before the statue of limitations, he gets a letter from a no win no fee solicitor. Insurance don't want to know as he never informed them way back when. Tells me his solicitor reckons it'll cost him £70k.

I think there might also come a point (although I'm not there yet!) when you don't want to buy any kit for a bit- maybe saving for a big purchase. Being able to leave the money in the company as retained profits, subject to just corporation tax, might be helpful.

I'm like you in that I've not paid much tax ever, such a big capital pool to claim against.

Fair enough you've to to feel comfortable with what your doing

Regarding years where your making money but not buying machinery there's so many other options. Writing off 100% of previous yrs purchases, isas, u can but £40k a year / partner into a pension fund each Yr tax free!!!!
The best thing you can have is an accountant you can ask questions to

I can't find much on the Internet but I remember at uni doing a case study on LEGO. The heart of the business is a Danish family who are a partnership. Basically the largest sole trader in the world!!!

 

[TiltyShaun]

I should probably mention I did a 4 yr honours degree in business studies

I more the understand comercial risk but manage it. I'm fully insured against getting sued by customers or clients.
I'm always making sure that we don't go into too deep with 1 customer or 1 job thus spreading the risk. I would say we would have a 1 company every 2 years go bust and due me money.

In a quite old fashioned way I would hate to liquidate a company and be due money or wages though it dosent seem to bother some folk round here.

Great news on your degree.
Anyone involved in Construction can be one accident away from a catastrophic insurance claim. Then you will find how good your cover is. With just one method statement error or one employee not following it to the letter you could find yourself in court. Court costs might be covered up to what looks like a very generous amount. But being found guilty means the fine is coming out of your pocket not the insurance.
I think the last company that went bust on me was over 30years ago and it took the company down. So we’ll done on your risk management on that front.
I don’t think anyone on here has promoted falsely liquidating a business or not paying there way.

 

[TiltyShaun]

Fair enough you've to to feel comfortable with what your doing

Regarding years where your making money but not buying machinery there's so many other options. Writing off 100% of previous yrs purchases, isas, u can but £40k a year / partner into a pension fund each Yr tax free!!!!
The best thing you can have is an accountant you can ask questions to

I can't find much on the Internet but I remember at uni doing a case study on LEGO. The heart of the business is a Danish family who are a partnership. Basically the largest sole trader in the world!!!

Interesting comment on the pension contributions. Thank you but no Thank you. I have much preferred rowing my own boat with regards to the property portfolio. There are great incentives tax wise to put your money in pension pots, locked away safely, so they can nibble away each year at having a slice of your cake. This might be for the vast majority of people. But personally I prefer to pay the tax due and keep control of what happens to the rest. The pension rules have had some great reforms over the last decade. But tax relief on the total pot will be a thing of the past before long. Mind you tax is going to be a far bigger issue in the coming years. But be sure that Company tax will always be at a lower rate than personal taxation.
This is not a criticism of any of your views. This forum is a platform in which like minding individuals (like of plant) are able to discuss issues that go beyond that point. It is always amazing how a thread can go off on a tangent not relevant to the original point.

 

[Furniss]

Not necessarily a bad thing. Don't mind how much tax I pay as long as its a level playing field.
When a digger hits 5 year old and say needs new tracks. It's often more financially beneficial to swap it for a new one rather than change to tracks. Madness really. Throw away society.

Yes and no ..... there is a limit at which point it becomes too much.

I chose to come here a long time ago and I'm happy with my decision as our quality of life is high, just not a place to get wealthy it makes you prioritize other things.

The saying over here is that you work 3 days for the government and 2 for yourself which is about right

 

[Smiffy]

Yes and no ..... there is a limit at which point it becomes too much.

I chose to come here a long time ago and I'm happy with my decision as our quality of life is high, just not a place to get wealthy it makes you prioritize other things.

The saying over here is that you work 3 days for the government and 2 for yourself which is about right

I didn't think the French where allowed to work 5 days consecutively

 

[TiltyShaun]

I didn't think the French where allowed to work 5 days consecutively

They do the 2 for themselves first!!

 

[Furniss]

Any more ?

 

[fred]

I am a small company. 5 staff. Just over £1m turnover.
Along way off the larger construction companies round my way but bigger than ur average 1 man band
Sole trader. Make a healthy profit. Have an accountancy fees of £500 a yr as not ltd and have never paid more than 7 grand in tax a year.
If capital allowances were to dissappear then I may have to rethink but as things are currently I can't see any need for being Ltd or multiple companies

unless the worst happens and they take everything you own including your house as your not protected by a company limited in its liability.

Fairplay but no way would i be taking that massive risk.

 

[TiltyShaun]

Yes and no ..... there is a limit at which point it becomes too much.

I chose to come here a long time ago and I'm happy with my decision as our quality of life is high, just not a place to get wealthy it makes you prioritize other things.

The saying over here is that you work 3 days for the government and 2 for yourself which is about right

I generally believe governments don’t spend our money wisely so the less they have of mine the better.
What is a fair take?
In my eyes higher personal allowances are great. The reality for the rich is once it gets over 40% they start wholesale avoidance. And with whatever you have left you then pay VAT on everything. So taxation on what you earn followed by taxation on what you spend. There will never be a perfect balance but stopping the incentive to earn reduces the ability to spend.
Low income tax and with high personal allowances and a reform of VAT. Anyone care to vote for that??

 

[fred]

Was speaking to a supplier of mine who had a ‘good’ accountant , until he got investigated by HMRC, turned out on vat alone he owed 50k over the 7 previous years.. Heck knows what I owe, my accountant is shite!

do your own books, its dead easy takes a morning each month and the software does the vat, paye, NI and CIS all automatically.

I use www.clearbooks.co.uk cheap and easy top use (must be if i can use it!).

 

[fred]

Fair enough you've to to feel comfortable with what your doing

Regarding years where your making money but not buying machinery there's so many other options. Writing off 100% of previous yrs purchases, isas, u can but £40k a year / partner into a pension fund each Yr tax free!!!!
The best thing you can have is an accountant you can ask questions to

I can't find much on the Internet but I remember at uni doing a case study on LEGO. The heart of the business is a Danish family who are a partnership. Basically the largest sole trader in the world!!!

ISA is out of post tax income not good

SIPP very good, you can have private pensions for the kids for nominal amount and receive the same amount matched by the gov. Compounding works very well at 15.

Farmers have the best of the lot though, exempt from inheritance tax. Any wonder the filofax investment fund managers all buy farms...

 

[GazCro]

ISA is out of post tax income not good

SIPP very good, you can have private pensions for the kids for nominal amount and receive the same amount matched by the gov. Compounding works very well at 15.

Farmers have the best of the lot though, exempt from inheritance tax. Any wonder the filofax investment fund managers all buy farms...

And then they wonder why land has such high value

 

[Furniss]

I generally believe governments don’t spend our money wisely so the less they have of mine the better.
What is a fair take?
In my eyes higher personal allowances are great. The reality for the rich is once it gets over 40% they start wholesale avoidance. And with whatever you have left you then pay VAT on everything. So taxation on what you earn followed by taxation on what you spend. There will never be a perfect balance but stopping the incentive to earn reduces the ability to spend.
Low income tax and with high personal allowances and a reform of VAT. Anyone care to vote for that??

It's a difficult country to run a small business in period .... high charges, strong employees rights and high material costs ...every government promises reform but never manages it.

 

[dod]

@TiltyShaun @fred
As far off subject as this is its still relevant and I enjoy discussing finance more than brands of diggers
It is all about feeling comfortable so different scenarios work for different people
A friend of mine was killed on a farm a few years ago. Draining and the sides fell in. See it all to often. The tractor driver on the digger and the employer everyone was doing something wrong. They pleaded guilty to everything and after analysing their accounts got a £50,000 fine. If it was balfour it would have been a £500,000 fine. The fine was made to hurt them but not bankrupt them. Thus putting them out of business and employees out of work.
Another company we deal with lost an employee. We're negligent. £200k fine.
This is why I don't fear my house getting taken off me.

 

[doobin]

Interesting comment on the pension contributions. Thank you but no Thank you. I have much preferred rowing my own boat with regards to the property portfolio. There are great incentives tax wise to put your money in pension pots, locked away safely, so they can nibble away each year at having a slice of your cake. This might be for the vast majority of people. But personally I prefer to pay the tax due and keep control of what happens to the rest. The pension rules have had some great reforms over the last decade. But tax relief on the total pot will be a thing of the past before long. Mind you tax is going to be a far bigger issue in the coming years. But be sure that Company tax will always be at a lower rate than personal taxation.
This is not a criticism of any of your views. This forum is a platform in which like minding individuals (like of plant) are able to discuss issues that go beyond that point. It is always amazing how a thread can go off on a tangent not relevant to the original point.

This. Governments have proven over successive parliments that they simply can't help themselves moving the goalposts and dipping in to pension pots. Might as well run my life as a multi-faceted business, if it all goes totally tits up then they will fund the nursing home but at least I tried.

 

[GazCro]

This. Governments have proven over successive parliments that they simply can't help themselves moving the goalposts and dipping in to pension pots. Might as well run my life as a multi-faceted business, if it all goes totally tits up then they will fund the nursing home but at least I tried.

Trouble with pensions is that when private pensions started to become the norm nobody saw the improvements to health care and the big jump in life expectancy which was to follow. How many people realistically ever saw 10 years on a pension? Now it's approaching pension age for nearly as long as working age and it's those still working and paying into pensions who are paying for those claiming it.

 

[Smiffy]

They do the 2 for themselves first!!

That explains the strikes. They must only occur on the other 3

 

[Furniss]

That explains the strikes. They must only occur on the other 3

There you go ...
That's the week sorted