Should I be a sole trader or should I have a limited company?
Typically speaking, we tend to have this conversation when a sole trader starts to earn around £30k per year of profit. In and around this level of profit, purely from a financial point of view, it is likely you will be more tax-efficient trading via a limited company.
We can of course prepare specific calculations for you to demonstrate the savings that could be achieved using the structure and you compare both alternatives side by side to see what works best for you in your position.
If you are already earning above this level of profit as a sole trader, or not sure what is best for you and have been considering the above, please get in touch and we can provide advice around this to ensure you are not overpaying tax.
There are also some other considerations other than financial to become a limited company. One core concept is the area of business risk and minimising personal liability – you may want to look to focus the risk on the company as a separate entity, as opposed to being on you personally. It may be a case of professionalism, or credibility and trust that are prompting these conversations also.
Here at GLX, we can demonstrate the pros and cons of this structure and see if this is right for you.
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