UK Tax: Sole Trader v Limited Company - how to enter income?
(roughly) as a Sole Trader with a turnover of £40,000, expenses of £20,000, i get £11,000 tax free as personal allowance and pay 20% tax on remaining £9,000.
As a Limited Company with a turnover of £40,000, expenses of £20,000 plus list my £11,000 as wages, so expenses become £31,000. i get £11,000 tax free as personal allowance, then take the rest as bonus £9,000 of which £2000 will be tax free and i pay 8% tax on remaining £7000.
Is this right?
should my £11,000 as wages be left in the company and be counted as Profit and taxed at 19% before i then pay it to me as.. wages?
Tax: £2090 + £640
in which case - better off as a sole trader.
Or i am being very stupid and missing something obvious.