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• 05.12.09
  Tax: limited company vs self employed Company, partnership or sole trader | (2)

  One of the key questions is which way you'll pay less tax and national insurance - by being self-employed or as a limited company. The questions isn't that simple (it costs more to run a limited company, for a start), and there are other considerations, such as your personal liability for the business's debts. But a limited company is likely to give you more flexibility to pay yourself in a tax advantageous way. That's because if you're self-employed as a sole trader, YOU are the business. If your business is a limited compnay, it is seen as a separate legal entity. With a ...

  Tagged: limited company, NI, self employment, tax
  
• 05.06.09
  Income tax and NI - rates and allowances Income tax & NI | (2)

  These rates and allowances change every year. These are the ones most relevant for you if you're running a business (there are other ones, such as extra allowances for older people). Income tax These are the figures for 2009-10. Allowances and tax bands Personal allowance: £6,475. Basic rate band: £37,400. Higher rate band: Over £37,400. Rates Basic rate: 20% Higher rate: 40% The rates for dividends are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate. National Insurance These are the main figures for 2009-10 - you can see the full list here. Thresholds and limits - employees Class 1 earnings threshold: £110 / week. Class 1 upper earnings limit ...

  Tagged: Income tax, NI
  
• 05.06.09
  Sole trader: pros and cons Company, partnership or sole trader | (13)

  Being a sole trader is the easiest way to start a business - there are fewer reporting requirements than if you set up as a limited company, for instance (although you do have to register as self employed at the HMRC). And accounting is much easier (and hence bills for accountants are lower). Sole trader: overview However, if you're a sole trader, then YOU are the business: Its profits are your income (so you may not able to easily minimise your tax bill). Its debts are your debts. And its mistakes are your mistakes - you can be sued and made personally liable if something ...

  Tagged: Income tax, NI, self employment, sole trader, vat