Benefits - Reduce Your Tax

It is possible to save tax if you set up your practice as a Limited Company as Companies are taxed differently from those who are self-employed.

The company pays a lower rate of Corporation Tax at 20% up to profits of £300,000 after expenses which includes salaries and pension payments.

Profits after tax can be distributed to shareholders as dividends. Corporate shareholders do not pay tax on dividends received but individual shareholders are taxed on dividends received.

Whether you would pay les tax as a Company or as a Sole Trader will depend on your profit level and whether you take money out of a company as salary or dividend. Any tax saving would need to be balanced against the cost of incorporation and running a company.

As you are self-employed, your profits are taxed as income. You need to pay further fixed-rate Class 2 National Insurance contributions (NICs) and class 4 NICs on your profits.

Please use the form below to send us an email:

Name (required, at least 2 characters)

E-Mail (required)

Phone (optional)