Structuring Your Business

BUSINESS STRUCTURE

Before you start, think about how you would like your business to be structured:

LIMITED COMPANY

Advantages

  • Separate legal entity with limited liability
  • Accumulation of profit
  • Corporation Tax at 20%
  • More professional image
  • Easier exit

Disadvantages

  • Cost of set up – registered office address, accountants, annual return
  • Higher fees
  • Administrative burden and penalties
  • More difficult/tax consequences of extracting money from the company

SOLE TRADER/UNINCORPORATED BUSINESS

Advantages

  • Simplicity and flexibility
  • Cheaper with less administration
  • Makes more sense if your total earnings are below the higher rate tax threshold
  • Tax! Losses from your business can be offset against other income or carried back.

Disadvantages

  • Personal liability for business debts
  • All profit taxed at your marginal income tax rate
  • Public perception

We recommend that you get advice from a professional before you begin. If you have any questions, drop us a line via our Contact form.

X
X