Limited Company Tax & Accounting
What is a limited company?
A limited company is a separate legal entity from its directors and shareholders. This means its finances and actions are separate from the owners, and gives protection to individuals should their company have difficulties.
What are the benefits of being a limited company?
One of the biggest advantages of running your business as a limited company is the significant tax savings you could make.
VAT registered businesses are already required to comply with Making Tax Digital for VAT. If you are already submitting your VAT return with MTD compatible software, then it makes sense to start doing the same for Corporation Tax as soon as the opportunity becomes available.
Limited companies are subject to corporation tax, which is currently 19%.
If you are a director and shareholder of a limited company, you can choose to take a small salary and draw most of your income from the business in the form of dividends.
By doing this you can minimise the amount of National Insurance contributions you have to pay as well as only paying dividend tax on the income you take from the company, rather than income tax on all your earnings!
Distinct entity and limited liability
A limited company is a completely separate entity from its owners, this means you have reassurance of ‘limited liability’.
Assuming no fraud has taken place, your ‘limited liability’ means you will not be personally liable for any financial losses made by your business. This means a limited company can give you the added personal protection should things go wrong.
Why choose Treetops as your limited company accountant?
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