Do I pay more tax being a company?

B

Barry19

Guest
I want to move from being a sole trader to setting up a company. There are several advantages to doing so but my question is do I not end up paying more tax with a company?

For example I would be paying myself a salery and be paying PAYE direct to revenue. Then at the end of year I would have to pay corporation tax on any earnings left. Doesnt this mean that I would be paying approx 40% Income tax (upper tax level) on anything I remove from the company plus the annual 12.5% corportaion tax?

Sorry I know this sound a bit clueless but what am I missing here?
 
Barry19 said:
I want to move from being a sole trader to setting up a company. There are several advantages to doing so but my question is do I not end up paying more tax with a company?

For example I would be paying myself a salery and be paying PAYE direct to revenue. Then at the end of year I would have to pay corporation tax on any earnings left. Doesnt this mean that I would be paying approx 40% Income tax (upper tax level) on anything I remove from the company plus the annual 12.5% corportaion tax?

Sorry I know this sound a bit clueless but what am I missing here?
Click to expand...

Yes, you pay Income tax on anything you remove from the company, plus 12.5% corporation tax on remaining profits left in the company.

Have you discussed this with your accountant? Don't in any circumstances form a limited company without professional advice.
 
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