How should I structure my business?

Every business is different, but here's what could work for you

The optimum structure for your company can be affected by a wide range of factors and each enterprise will be suited to different structures.

But in simple terms, in the majority of cases you are probably best off as a company.

For example, a husband and wife can quite legitimately earn between them £40,000 from their own company without paying any personal tax.

How? Each takes around £9,000 salary which doesn’t incur any NI or income tax. They then pay themselves interest on their capital of £1,000 tax free and the first £5000 comes through as their savings allowance. Add to that a £5000 dividend and they have a joint income of £40,000, tax free.

So if you have a business earning that sort of money we would advise that you put it in a company. If you’re earning more than that and consuming it, there’s no harm being in a company.

And if you’re earning lots more than that and retaining it in your business then it’s definitely an advantage to be a company. If you’re earning less than that then you probably wouldn’t be able to afford the compliance costs.