Accountants in Bexley asks Limited or Sole trader ?PMC Partnership
Accountants in Bexley, PMC Partnership, asks which is best in 2017 tax wise, being self employed or being Limited ?
Since the 2017 Dividend changes clients are asking if it is better to be a sole trader now ? Take this example if you are earning £30,000 in 2017. Being self employed your tax bill will be £3800 and National Insurance £2120, making a combined liability of £5920 or approximately 20% of income. If you are Limited you would be paid £11,000 through PAYE with £0 tax and £340 National Insurance, plus a £1050 personal tax liability on your £19,000 of dividends. Including your company tax liability of £3800 (lowering to £3610 in 2017/18) your overall liability would be £5190 or 17% lowering to 16% in 2017/18. THUS THE ANSWER IS YOU ARE STILL BETTER BEING LIMITED.
(Note you can voluntarily top us your NI contributions)