I’m self employed – when should I convert to a limited company?

July 2, 2015

This is a fairly straightforward question.

It is when the tax saving becomes more than the accountancy fees.

Accountants will charge you 2-3 times the annual fee of for a limited company compared to self employment.  This is because there is about 3 times more work that needs to completed for a limited company.

The great advantage of a limited company is that there are huge tax savings on offer.

So as a quick magic number – I would say £30,000 profit.  At this point, you need to be looking at the tax saving and at converting to a limited company.

Notice, it is PROFIT not your sales income.  Because you are taxed on profit, this is the more relevant number.

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