Monthly Archives: December 2013

Why do self employed workers set up companies?

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Despite being one-man bands, there are a growing number of individuals taking advantage of tax planning to establish limited companies and increase their own cash availability.

Why Are Limited Companies Popular?

If an individual has a business or trade that revolves around a particular skill, they can work as a sole trader and pay tax through their self-assessment tax return.  They will pay income tax and make National Insurance contributions.

Income earned through employment or self-employment is subject to National Insurance in addition to income tax. It may be possible for workers to save on National Insurance by being paid dividends instead of a salary; this is because dividends are not subject to National Insurance.

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