D
Dazh09
Hi, not sure I've posted this in the correct section here but I'm after folks opinions on which is the best business model when starting up sole trader or Ltd company, reason being I got talking to a bloke while on a training course who enlightened me on a lot of interesting facts about becoming a Ltd company.
Firstly he explained that if I took the Ltd company route I could pay myself a yearly salary just below the tax threshold of around £10,000 completely tax free but would liable to N.I of around £275 , then I could pay the rest of my wage as weekly, monthly or annually dividends which are only taxed at 10% thus paying far less tax than the sole trader route, I could also get my partner on the books and pay her £10,000 tax free too.
He went on to explain that as a Ltd company I would have to pay 20% corporation tax on profits but from what I understood this was on any remaining profits after costs I.e wages etc have come out, apparently this is the new trend of how directors of Ltd companies pay themselves?
Firstly he explained that if I took the Ltd company route I could pay myself a yearly salary just below the tax threshold of around £10,000 completely tax free but would liable to N.I of around £275 , then I could pay the rest of my wage as weekly, monthly or annually dividends which are only taxed at 10% thus paying far less tax than the sole trader route, I could also get my partner on the books and pay her £10,000 tax free too.
He went on to explain that as a Ltd company I would have to pay 20% corporation tax on profits but from what I understood this was on any remaining profits after costs I.e wages etc have come out, apparently this is the new trend of how directors of Ltd companies pay themselves?