<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1198915663809555&amp;ev=PageView&amp;noscript=1">

Self-Employed vs Limited Company: Which is the Best Option for You?

When setting a new business, one of the first doubts is if you should be working as a self-employed or via your own limited company. 

In this article, we will be discussing both legal processes, - as well as benefits and drawbacks of each one - in order to help you decide which type of legal structure you should work under! 

 

sky-gb056141b4_1280

 

The difference between a self-employed and a limited company

There are many differences between working as a self-employed or setting a limited company, therefore it’s essential you consider the following points when evaluating which business structure is best for you:

 

Self-Employed vs Limited Company (4)

Download here this table!

 

Be aware that, no matter whether you work as self-employed or through a limited company, you must register for Value Added Tax (VAT) if your turnover reaches £85,000 or more per tax year.

 

Take Home Pay as a Self-Employed and as a Employee through a Limited Company

 

Copy of Self-Employed vs Limited Company Take Home Pay (300 × 150 mm) (400 × 150 mm) (300 × 150 mm) (280 × 150 mm) (270 × 150 mm)

Download the take home pay table!

Be aware that if you choose to set a limited company, all of your business income go through the limited company, of which you are considered an employee, as shown above.

The limited company also pays corporation tax on its profits. You can also take a salary from the company, which reduces the company's tax bill but can increase yours as an employee.

Also note that these calculations don't include expenses, which can change the final take home pay.

 

Is limited company or self-employed better?

It depends! Whatever route you think works best for you, weight both options and try to discuss it with people who work as self-employed and also with others that have set a limited company, since this is definitely not a clear-cut choice. The best decision for your business will depend on your own circumstances!


 


 

If you choose to work as a self-employed, Tommy's Tax is here to help you with your tax refund! The process through our app only takes 5 minutes. With our "no refund, no fee" policy, we can check to see if you're owed any money for free!

Using Tommy's Tax app will help you claim the maximum amount possible! On average, people who claim tax returns through Tommy's Tax app earn £3000, which is significantly higher than that they would have claimed themselves!

 

Just download our app to claim your tax return today!

Download our app!


 
We encourage everyone to read our blogs and free tax refund calculators 
so you can learn more about how tax affects you! 

 

Published by Elisa Ribeiro Soares
Elisa Ribeiro Soares