Company Select (UK) Limited - New Business Start-ups! Sole
Sole Trader vs Limited Company - "Sole Traders", Your Attention is required! What you should bear in mind when deciding what business structure you should use for your venture; Although the sole trader route, which is commonly referred to as being self employed, is the most popular way of running a business in the UK. There are significant advantages though of operating as a limited company and as a sole trader the benefits of becoming a limited company are far greater. Let's take a look at one main reason; 1. Tax The main advantage of running your business as a limited company is that you are likely to pay less personal tax than a sole trader. Limited company profits are subject to Corporation Tax, which is currently set at 20%. The Government has stated its intention to cut Corporation Tax to 17% by . Make your goals and run your own business Today! Speak to us at Company Select (UK) Limited and we will guide you all the way, no hidden fees. A company that actually holds your hand all the way and not a website. If you are the director and shareholder of a limited company, you may choose to take a small salary and draw most of your income in the form of dividends. (A dividend is a payment a limited company can make to shareholders when it has made and retained sufficient profit.... Therefore most directors take a small salary and the remainder of their company's profits as dividends as this is the most tax-efficient payment method.) By doing this, you can minimise the amount of National Insurance Contributions (NICs) you have to pay because dividends are taxed separately and remember are not subject to NICs. As a sole trader, your entire income is subject to NIC rules. Running your business as a limited company could therefore help you to take home more of your earnings.