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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:4262
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:58
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:1738
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


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