Sole Trader vs Incorporation

March 19th, 2016 | Posted by: pete | No Comments

Sole Trader v Incorporation

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.

Testimonials

Emjay Associates Ltd have always been there with helpful advice for my small business. They are an accountancy company that helps you grow your business

Jim Williams Satisfied Customer

After appointing Emjay Associates as our accountants (following a referral), we cannot thank them enough for obtaining a reduction in our tax liability of over £17,5000. They spotted a mistake in previous years returns and then spent time analysing our CIS returns and subsequently dealing with HMRC.

A Big thank you

Thank You Dave - CPS Property Services

I would like to take this opportunity to thank you for all your input into our business this year, you are such a font of knowledge, not just about the accounting side but in all business matters and it's great to get advice from you.

KG – Greenfield Services Greenfield Services (Southern) Ltd

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