Going Ltd

Are you thinking about making your business limited? Business owners are often unsure about which entity to trade as i.e. sole trader, partnership or limited company. Generally, there is no legal obligation to trade as a particular entity. However, there can be tax and other benefits of going limited.

Tax Relief

Some expenses that would be disallowed in an unincorporated business are eligible for tax relief in a limited company.

Tax Rates

Director-shareholders of small companies tend to pay themselves a small salary and dividends. Dividends attract no National Insurance and are taxed at a lower rate than self-employment income.

Tax on Profits

Owners of unincorporated companies are tax on their share of the business profits, regardless of what they withdraw from the company. Limited companies are taxed at a lower rate than individuals and do not pay National Insurance on profits. Corporation tax currently stands at 19%, which is substantially lower than the top rate of personal income tax at 45%.

Our in-house calculators let us review your circumstances and calculate your potential tax savings within minutes. There are also other benefits of making your company limited:

• Once you are registered with Companies House, no other company can be formed with the same name
• It is one of the only methods available when it comes to avoiding the umbrella scheme
• Transferring shares is more straightforward in a limited company within a partnership
• Limited companies are considered to have a higher status and tend to find it easier to raise finance or attract investors

Established for over 25 years, and registered with the Association of Chartered Certified Accountants, you can rest assured that we will bring a wealth of experience and insight to the table, should you decide to proceed with going Limited.