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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5018
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am an employee at a firm, making £60,000 p/a. I have been

Customer Question

I am an employee at a firm, making £60,000 p/a. I have been allowed by the firm to open my own company (either as a sole trader or limited company) to freelance during evenings and weekends doing what I do (build websites). I anticipate making around £10,000 every year, on top of my normal salary. My expenses tend to be quite low, I anticipate no more than £1000 in a year. What would be the best set-up for me? Sole trader, or limited company?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question..In light of changes to how dividends are going to be taxed from 6 Apr 2016, there is a good case for you to operate as a LTD company.The rationale being there will be a personal allowance of £5,000 for dividends and the rest would be chargeable to income tax.If you were to take self employed route, the profits would be subject to income tax and Class 4 NI which would most likely exceed your tax payable otherwise.There are costs associated with running a company but if the set up is small and simple the cost can be no higher than £750.There is protection for running a LTD company as your liability is limited. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
Thank you, ***** ***** When you say the cost of running the company can be no higher than £750, what do those costs involve?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.Suppose you were to enagage the services of an accountant with accounts preparation and filing of accounts at Companies House and filing of CT600 return to HMRC.Annual return fee and some additional admin costs.. I hope this is helpful and answers your question.