did you know...

....you can save tax by having the correct structure for your business?

Many people starting up in business are unsure whether it is more tax advantageous to become self-employed or set-up a limited company. The simple answer is that your best route is linked to your projected profits from the business. All employees, business owners or self employed people can earn up to £6,475 tax free in a given year. This is the same whether you are self-employed or running a company. If you are making losses then it can often be better from a tax perspective to be a sole trader, especially in a new business as these losses can be set against other tax you have paid, possibly from employment.

Once you start to make profits in excess of £6475 per annum, you are better off operating as a company, however, this benefit can be eroded initially by the increased costs of running a company. Once you start to pay higher rate tax, which kicks in on annual earnings above £43875, the balance begins to swing back in the other direction. Which structure is best for you will depend on your assessment of your annual profits, whether you have a partner and if so, their earnings and whether you have other income or losses outside the main business. If you would like a free personal illustration of which business structure is most tax advantageous to you, or if you would prefer us to call you to arrange a free of charge consultation to discuss your situation in more detail, then please click here.