Sole Trader vs Incorporation
| Posted by: pete | No Comments
With the advent of changes in the way dividends are taxed, the big questions is, “Is it worthwhile to incorporate or should I stay self employed?”
For the tax year 2016/17 savings can be made on tax as soon as profits go above £6425 (see below). However taking into consideration extra accounts fees then you may be better off staying self employed. You also do not incur any costs in relation to Companies House and some to year end you may have extra time to pay your tax bill.
- Profit Saving
- £10,000 £107.48
- £20,000 £407.48
- £30,000 £707.48
- £60,000 £2,097.19
- £150,000 £1,594.80 Extra
As you can see when profits exceed £150,000 it works out more expensive being incorporated, so look at the other reasons (limited liability etc..) and make a judgement based on facts.
Should you wish to discuss this further, call Emjay Associates to arrange a no commitment meeting with one of our accounts team.
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