Tax is only part of the picture. We look at liability, admin, credibility and take-home pay.
There is no single profit level at which a limited company always becomes better. The right answer depends on your profits, how much you need to draw and your plans for the business.
Sole trader
- Simple to set up and run
- Profits taxed through Self Assessment
- No separation between you and the business
Limited company
- Limited liability for the owners
- Corporation Tax on profits, then tax on what you extract
- More reporting to Companies House and HMRC
We usually prepare a side-by-side calculation of your take-home pay under each option, including the extra running costs of a company, so you can make the decision with real numbers.
Practical articles from our team. General information only — contact us for advice on your situation.