Have you ever noticed that people who make money seem to be directors of a limited company? You get small sole traders and
slightly larger sole traders but as soon as the business grows, they seem to have a limited company.
This is because Limited companies pay less tax. The tax rate for a company is 20% no matter how much profit you earn. Falling to 14% and then 18% over the course of this Parliament.
An individual pays 20% tax plus 9-13% national insurance up to £42,000 rising to 40% thereafter and hitting 45% over £150,000.
This is one of the reasons why people who make money form limited companies.
This week I am looking for businesses who make more than £18,000 as this is the lower break-even point at which you are better off being a limited company.
If you come across any individual who is not a limited company and are earning in excess of £18,000 I would like the opportunity to
meet with them, free of charge to tell them how they can save tax.