Limited Company or Sole Trader: What are the basic tax differences?
The total tax and National Insurance (NI) costs to a small limited company are more likely to be less than the costs to an unincorporated business of a similar size when taxable profits surpass the rate at which income tax is levied at the highest rate which is 40%. Company profits do not attract NI which is another advantage. Although there are many advantages to incorporate your venture, there are also disadvantages which include capital tax implications upon transfer of assets to a limited company from an unincorporated business. Other issues which need to be considered include increased paperwork as a consequence of having to file accounts at the Registrar of Companies. Forte accountants & Business Advisers can look at your business proposal if you are just starting up or you existing plan and advise you on what type of business is best for you.
