Sole trader or opening a company?

[ship141]

Hi,
This is my case:
I have resigned my job in Jan 2014 and went self-employed. Haven't made money for the whole period until last week when I managed to seal a deal that got me gbp70,000.
Now I'm hesitating between recieving it as a sole trader (and pay around 30% tax and NIS) or just establish a company, pay the 20% corporate tax and get a gbp1,000 salary out every month. As I understood, I can claim my business expanses on the company or as employee.

Looking for the best tax structure, any help would be greatly appreciated.

Don

[GlobalTaxAdviser]

Hi

You can offset expenses with a sole trader or limited company

I always suggest to sole trader clients if you are earning more than 30K profit then if you include the accountancy fees it would certainly be more tax efficient to go down the limited company route.

There are other reasons to go limited - status, limited liability, cashflow etc. Remember limited company entails more responsibilities and administration.

Thanks

Sash

www.business-at.com

[bd6759]

If you have already secured the contract, your company would need to renegotiate it.

If you go down that route, get an accountant. £1000pm salary is not very tax efficient.