How much tax will you save with One4 Company Formation? | Saving tax with a limited ltd company

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CAN YOU SAVE £3,000 IN TAX WITH YOUR LIMITED COMPANY?

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SAVING TAX WITH A LIMITED COMPANY

Tax benefits of incorporating

Below is a summary of the potential tax savings to be made with a limited company compared to a sole trader. However this is a simplification and other matters need to be considered before deciding on incorporation.

The savings are based on taking a small salary and then extract all other income in the form of dividends. The actual benefits will depend on each individual situation.

Net Profit	Maximum Tax Saving
£18,000	£817
£22,500	£1,147
£26,000	£1,392
£32,000	£1,800
£45,000	£2,853
£60,000	£3,716
£100,000	£3,816

You should always consider the other reasons to set-up a limited company as well. Below several other reasons to set-up a limited company:

Protecting your family, your house and other assets

For us the most important reason to incorporate must be the protection it gives you, your family and any other dependents. The main risk of not being incorporated is that you are personally liable for any debts that your business runs up if your business runs into trouble.

Accounting requirements

As a limited company you need to comply with different legislation including the companies act. The preparation and disclosure of financial information is one of the requirements.

Instead of seeing this as a disadvantage we suggest this could be an opportunity. Although there are many reasons why business are successful, these is one reason why half of the businesses fail and that is poor cash flow management. Having a good set of accounts and a qualified accountant can help you manage your cash flow properly.

Business name

Each limited company need to have a unique name. However this does not give you exclusive right to use that name in any branch or trade. In order to achieve that you should apply for a registered trademark (®).

Cost of running a limited company

The cost of running a limited company does not need to be great, in particular if you consider that good accounting records are required to run any business. However, some accountants are a lot more expensive then others while the services provided and the quality are the same.

The cost of filing records with company house are generally low (e.g. £15.00 for the annual return) or free for most other forms when done online. Your qualified accountant can help you being compliant with the relevant rules and regulations.

General info

Company registration