Sole Trader or A Limited Company

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hsodhih
hsodhih Registered Posts: 12 New contributor 🐸
in General accounting discussion
Hi, I am an employee at a company and my income is £35000 gross. I pay tax on this at normal tax code of 810L.

I am looking at an opportunity that can give me another £600 per month profit. But this is on self employed basis.

I am thinking to set up a Ltd company for my £600 per month profit. I will be the only one man working in the company and my services be of service nature that only I can deliver so will not keep other staff members .Someone told me that if you do so, and take out dividends from company, you will not pay as much tax.

Could someone explain what option is better for me please?

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  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    I would suggest this is detailed tax advice that you would be better consulting an accountant on a personal level rather than on an accounting forum
  • hsodhih
    hsodhih Registered Posts: 12 New contributor 🐸
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    The above is an example to help me get a better understanding. Please comment
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    I made my comment because I feel there is too much to discuss without making a general comment of do this or do that. Personal circumstances can effect any tax advice. However, I would say we have plenty of clients that are one man Limited companies that pay a minimum salary and take the rest as dividends. However, as I said previously this is specialist tax advice that can not be answered with a simple reply on an accounting forum

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