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