Hi

Thanks for your question

The main benefit is the tax savings that can be made, as you can draw just enough salary to use your personal tax allowances, and then draw dividends up to the basic rate limit and be paid these with just a 10% dividend deduction, (but dividends can only be drawn if there are sufficient profits in the company after corporation tax has been charged)

However, the tax obligations with a limited company are vast, and so subsequently the accountancy costs wipe out any tax savings to be made, as you have a Companies House tax return, a Corporation tax return, Payroll each month, Annual Employer return, P11d Expenses and Benefits returns, Self Assessment and Employment page.

As self employed individual your tax is a little higher, but there is only a self assessment tax return with a self employment page to worry about.

In a scenario of a business making a net profit of £200,000 the tax savings as a limited company would be approx £2000 which would barely costs the accountancy fees

Thanks

Sam