How to set up a Limited company in the uk and advantages.

[Mamatrader]

Hello, I am looking to start a Limited company in the uk, I would like to know how this will play to my advantage in regards to paying as much as little tax possible. Also what other benefits would I get if any as a company owner?

thank you.

[daryldy]

Hi @Mamatrader ,

You might be able to find some information on what your looking for in this article we published. Alternatively, we encourage you to post your question in our UK group. Some more information can be found on this link.

Thanks!

[ame]

Hi @Mamatrader so its pretty simple

Sole traders pay income tax and National Insurance contributions on the profits of the business through an annual self assessment return. The rate of income tax and National Insurance contributions is equivalent to that of a private individual and includes the same personal allowances. So higher the income, higher the taxes. 

A limited company pays corporate tax which is based on income less allowable business expenses. Corp tax rates for smaller businesses are lower than the equivalent income tax rates and companies can claim a wider range of allowable expenditure. 

Although you will also pay personal income tax and National Insurance contributions as a director or owner of a limited company, you have greater flexibility in the way you pay yourself, which can lead to savings on your personal tax bill. eg. you can pay yourself a salary plus dividends. since dividends are taxed on a lower rate. 

Send me a note at ahmed (at) workhall dot co and we can get you registered in the uk 🙂 maybe even take on some outsourced responsibilities