If you are starting a new business, are you clear on how you and the business will be taxed?
This short video explains the tax payable on a profit of £50k.
The tax payable will be dependent on whether you set up as an unincorporated entity (sole trader or partnership) or as a legal entity (Limited company (Ltd) or Limited Liability Partnership (LLP)).
All factors should be considered not just any potential tax saving when making the decision including limited liability status and credibility with customers as positives offset by the increased compliance involved with running a Ltd or LLP.
However solely from a tax point of view above a certain profit level (and in most circumstances) the business trading as a Limited company will normally
end up paying less tax. WATCH THE VIDEO.
Written by Nick Mason - Director, Wagner Mason Accountants.