The amount of tax saved by running a business via a company depends on many variables.
However if we compare tax and profits and assume that a small salary is taken to ensure that basic contributions for NI are paid and all remaining profits are extracted by dividend from the company the savings between a sole trader and company are as follows:
|Profit level £||Sole Trader £||Company £||Saving 2015/16 £|
Note: salary = 52 x £155, i.e. £8,060, rounded down to £8,000
Please note, after 5 April 2016 there are changes in how dividends are taxed and we are happy to give advice on
How to set up a company
How much Tax you will save
Running costs of a company
Responsibilities of a Company and it's Directors
Book a free initial phone consultation today.