When it is advisable not to offer advice?

I am in a number of Facebook groups for UK businesses. It is useful to keep my finger on the pulse and, sometimes, I can help. But I only offer factual answers and would NEVER advise someone through social media. Two reasons: you can’t possibly know enough to provide an opinion, and they can sue you even if they aren’t paying you.

The most common question I see is: I am a sole trader and my sales have reached X, should I become a limited company?

Why can’t I answer this question?

This is a perfect example of a question that no self-respecting tax adviser would answer. Here’s why:

• Profits determine tax not sales/revenue/turnover
• How your earnings are taxed depends on your other income and gains
• The decision involves wider considerations such as your working methods
• You must factor in future as well as current circumstances
• There are associated costs that impact on any tax-driven benefits
• What your business does can influence the decision

We offer this advice as a service to new customers and actively review the best approach with businesses we already support. If we can help you with this, please use our Contact Form which we have designed for you to tell us as much as possible before we speak.

One last thing…people seem to confuse VAT registration with being a limited company. This is NOT true. So if you’d like to do some research of your own: here’s a link to the HMRC guidance. But if you’d like to speak to an expert who can explain it to you in normal words, you know where to find us.