Post
by alientrader » Tue Dec 12, 2006 1:37 pm
Thanks guys,
interesting discussion we have here.
I am currently self-employed as a sole trader and was thinking of the incorporation option to show transparency as per the new guidelines.
The new system dosent seem clear at all, it says that you either have to show A)company audited accounts or B) unaudited business records + collated invoices and contracts. So i am presuming for those who are unincorporated, we would have to fulfill Option B. But surely, there are many businesses that does not pertain to this kind of business model of "contracts+invoices." I can think of several right at the top of my head, giving seminars, teaching speacilized skills to a large group of people,etc. where hence can i get a contract+invoice. it seems that either HO is trying to pigeonhole HSMP-ers into a very specific business paradigm, or that they were really not thinking at all when they drafted those rules. There is a whole range of legitimate businesses that would fail to satisfy option B. Perhaps the only option is to incorporate and get the company accounts audited. please correct me if i am wrong?
I dunno if i agree with London Blonde regarding, company making 10k and paying yourself 40k. What if the company is a business that is highly sensitive to business cycles and/or you just cant make money that year or the business is such that its highly unstable in terms of profit generation year upon year. As an example, let's say i am involved in fund management, due to prevailing market conditions with respect to my business decision making capabilities, I make only a handful of transactions a year in the financial markets and making only 5k the entire year, while paying myself 40k, after all i have to live. Just an example.
Surely this is a bonafide business.
As an afterthought, if u are an employee of a company u set up, if the company is a legal entity in its own right, and u are its employee. Why can't you just show evidence as a salaried employee, payslips, income tax etc. Perhaps there is no need to show company accounts at all?
Any thoughts would be appreciated.