This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Should I set up as a ltd business or remain as sole trader

muchos04
Posts: 2
Joined: Fri Apr 26, 2019 7:44 am

Should I set up as a ltd business or remain as sole trader

Postby muchos04 » Fri Apr 26, 2019 7:53 am

Hi there,
I am a paye employee earning c55k per year and on the side I am planning to rent out my campervan and get annually around 7k turnover from that. Should I continue pay tax as a sole trader or are there any benefits in setting up a ltd business given the turnover is so small?
Thanks
Muchos04

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Should I set up as a ltd business or remain as sole trader

Postby bd6759 » Fri Apr 26, 2019 10:48 pm

There are few benefits, only unnecessary paperwork.

muchos04
Posts: 2
Joined: Fri Apr 26, 2019 7:44 am

Re: Should I set up as a ltd business or remain as sole trader

Postby muchos04 » Sat Apr 27, 2019 11:00 pm

Ok thank you. Is that the general consensus from others on here?

DJ314159
Posts: 47
Joined: Wed Aug 06, 2008 3:34 pm

Re: Should I set up as a ltd business or remain as sole trader

Postby DJ314159 » Tue Apr 30, 2019 8:05 pm

On £55k gross profit you will pay 20.34% in tax with the limited company option (taking a salary of £8,632 - not £12,500, as you will be a close company)
With the sole trader option you pay 24.51% tax ( https://www.uktaxcalculators.co.uk/dividend-vs-salary.php )

Some of what you save will be eaten up with accountancy fees (unless you do it yourself - not hard once you get into it). The extra paper work can be considerable, so you can save a bit but it might not be worth the hassle.

AGoodman
Posts: 807
Joined: Fri May 16, 2014 3:47 pm

Re: Should I set up as a ltd business or remain as sole trader

Postby AGoodman » Wed May 01, 2019 2:59 pm

DJ314159 - I think he was just talking about the £7k - admin costs become a much bigger issue


Return to “Income Tax”