bonkers? why I’m staying as a sole trader, and not setting myself up as a limited company

  1. the tax question — although I don’t know of any empirical studies to back this assertion up, my perception is that most self-employed who incorporate themselves do so to take advantage of the different tax rules that apply to companies, and as such are able to reduce the extent of their earnings that are ‘lost’ to tax payments. But I actually feel quite privileged to be able to pay tax, and while I may not fully agree with how the government decides to spend it all, I like knowing that there’s money in the pot to pay for teachers at the schools my boys go to, for hospitals to be able to stay open, and for street lights to be able to stay turned on at night. It’s also a way that I can further manifest some of my Christian values — I can’t practically care for all of my neighbours in need everywhere, but through tax payments, I can know that there’s emergency help available to them when they might need it most (wherever they may be in the world).
  2. the risk question — given that in the eyes of the law, a company becomes a legal person in its own right, then if things start to go ‘pear shaped’, its the company that would take the hit not the individual person. And while this may be more appropriate for some with regards to the types of risk their business may entail, for me, I’d be concerned that it would start to make me less stringent with myself: after all, if I knew that if things didn’t work out I wouldn’t have to take legal responsibility for any fallout from clients, investors, etc, why should I try harder to make sure it works?
  3. the ability to get work –oddly, most local authorities can’t directly commission me because of the way in which the rules they have to abide by work, yet national government departments and bodies have never had any issue with contracting with me… however, I am aware that in some instances, I can’t bid for contracts because I’m not the ‘right shape’ (i.e. not a company). But there are ways around this that I think are actually more beneficial in the long-term: I can collaborate and partner with other companies to jointly bid for these contracts, and in doing so build more mutual support and resilience into myself and other companies — better relationships all round, rather than trying to do everything by myself (and it can be lonely enough at the best of times in being a freelancer).

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freelance supporter of enterprises of all types, in many guises... www.adrianashton.co.uk

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adrian ashton

adrian ashton

freelance supporter of enterprises of all types, in many guises... www.adrianashton.co.uk

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