{"id":4814,"date":"2023-02-13T14:53:14","date_gmt":"2023-02-13T14:53:14","guid":{"rendered":"https:\/\/www.georgehay.co.uk\/blogs\/?p=4814"},"modified":"2023-06-16T08:17:23","modified_gmt":"2023-06-16T08:17:23","slug":"limited-company-incorporation-is-it-worth-it","status":"publish","type":"post","link":"https:\/\/www.georgehay.co.uk\/blogs\/2023\/02\/limited-company-incorporation-is-it-worth-it\/","title":{"rendered":"Limited Company incorporation \u2013 is it worth it?"},"content":{"rendered":"

Whether just starting out, or established sole trader, you may be wondering if limited company incorporation is right for you. The truth is, it depends on your circumstances and what you want to achieve with your business.<\/p>\n

In years previous, limited company incorporation was often the clear-cut winner. Yet, given the various changes to taxation that we’re seeing, it’s no longer so straightforward.<\/p>\n

In this article, we ask \u2018is incorporation really worth it?\u2019. We address some of the pros and cons and offer a comparison between tax and take-home for sole traders, and limited companies.<\/p>\n

Sole trader vs. limited company<\/h5>\n

In the early days of your venture, operating as a sole trader often feels the appropriate choice. It carries less administrative responsibilities and lower set-up costs, but this structure can hinder long-term growth.<\/p>\n

Additionally, sole traders are taxed on their profits as they arrive. This means that, should you have an unexpectedly good year, you could breach thresholds and cost yourself child benefit\/higher tax rates. Alternately, in the following year, you may have unused allowances go to waste.<\/p>\n

Limited company incorporation carries more involved administration, and higher set-up costs, but your business is deemed legally separate to the business owner\/s. A limited company structure can also offer greater flexibility in respect of tax planning and profit extraction.<\/p>\n

You and your business being separate entities affords greater protection for your own assets, but does mean that the company money is not strictly \u2018your\u2019 money.<\/p>\n

April 2023 changes \u2013 impact on tax liabilities and take home<\/h5>\n

Confirmed during the Chancellor\u2019s Autumn Statement, come April 2023 the following tax changes will take effect:<\/p>\n