Calling all freelancers or self-employed, opening a Limited (Ltd) company could help you manage your finances better. Yep, it's as simple as that.

Why?

It's mainly down to tax. You'll likely pay less (hurrah!). Here's how it works: The company receives money from your clients and then pays you as an employee. Since you're also the owner, aka a share holder, of the company you can receive dividends. This means your income will be a mixture of salary and dividends which can be more tax efficient. 

What are dividends?

Company profits paid to shareholders. You can receive £5K income a year tax free (after corporation tax of 19%). 

Any other benefits?

A big YES! You will be employed rather than 'self-employed' which means you can access state benefits including maternity pay and sick pay. 

There's more...

Owning a Ltd company means you have limited liability so you will not be personally responsible for any loss made by your business. FYI: As self-employed you have no protection on financial claims made against you. 

So how do I set-up a company?

Your best bet is to use accountant who will manage everything including registering the company, payroll and yearly accounts. We recommend Einstein Tax who offer an excellent service at a competitive price. 

How much should I be earning before I do this?

There is no minimum. It depends on your needs and future plans. Start by speaking with an accountant, first conversations are free. Use this chat to find out how a Limited company can personally benefit you.