Trading Medium

21st September 2016

Sole Trader or Limited Company: Which business structure is best for you?
The answer has implications beyond those relating to tax and depends on your situation. This decision has become even more crucial with the change of taxation of dividends from 2016/17 onwards. If you expect profits to exceed approximately £30k pa, it may be more tax efficient to trade as a limited company. However, a limited company requires additional volumes of paperwork and there are more rules and regulations. Sole trader status is relatively uncomplicated, and can be the best choice for smaller or short term ventures.

There are benefits to operating under a limited company, particularly for contractors. Often clients and agencies will not engage with sole traders, whereas company status can attract bigger clients and provide credibility. Your personal assets are protected so for those in higher risk industries this can be attractive.

To help you achieve the right structure, we can review your financial position and help explain all the issues to ensure your business is tailored to your specific circumstances. And remember, your decision isn’t final so if your business plan changes, so can your trading structure.



 
Other items in Blogs
 
Thomas Nicholls
15th June 2021 Tax on Cryptocurrency does not have to be cryptic

Within the last 10 years the cryptocurrency scene has exploded from the first decentralised cryptocurrency, Bitcoin, being created back in 2009 to now more than 4,000 different cryptocurrencies being in existence with a total market cap value of over £1trillion.   This has led to the creation of the Cryptoassets Taskforce which was announced back…

Read More »

Jaimie King
14th June 2021 Deferred tax rate to increase

Deferred tax is a provision on the balance sheet for timing differences in tax and accounting treatment of certain items, and is measured at the rate of tax that the differences are expected to reverse in the future.   In recent years, deferred tax has been measured at the current corporation tax rate of 19%,…

Read More »

Scott Butcher
9th June 2021 Paying VAT by Direct Debit – check your HMRC records

HMRC are in the process of moving VAT records for non-MTD registered traders from their old database to a new one.   Due to banking requirements if HMRC does not hold a valid e-mail address for a trader, when the data is transferred to the new database, any existing direct debit mandate will be cancelled.…

Read More »

James Cater
4th June 2021 Delivering Rural Investment for Vital Employment

  There is a new support programme, DRIVE, that can result in grants of up to 40% of total project costs for businesses in Norfolk and Suffolk that wish to undertake projects that primarily create new employment within the rural economy. Grants can be up to 40% of total project costs with a minimum grant…

Read More »

Steven Denton
3rd June 2021 National Insurance holiday for employers hiring veterans

Following an announcement by the government in 2020, from April 2021 employers hiring former members of the UK armed forces will be exempted from any NI contributions liability on the veteran’s salary up to the Upper Secondary Threshold (UST) in the first twelve months of their employment. However, under current guidelines relief for the 2021-22…

Read More »

Stephen Malkin
28th May 2021 Xero – Multi-factor Authentication

  Do you use Xero?   If you do, then multi-factor authentication when logging in will become compulsory after 2 July 2021.  From 1 June you will be prompted to set this up but can defer up until 2 July 2021.   Having a second layer of security is designed to prevent anyone but you…

Read More »