Medical Professional / Dermatology

Sole trader to limited company | Tax planning

A dermatologist had been contracting as a sole trader for a number of years. She and her husband recognised that by remaining in that structure they were paying a significant amount of tax unnecessarily, with no vehicle for long-term wealth building. They wanted to incorporate, begin retaining income in a company, and use that structure to invest for the future while the husband remained in employment.

• Advised on the appropriate company structure and managed the incorporation process.

• Set up Xero and established ongoing bookkeeping, VAT returns, payroll, and year-end accounts.

• Structured the company to allow for pension contributions from the company, reducing the tax liability on retained profits.

• Provided guidance on how the company could hold investments directly, enabling wealth to accumulate in a tax-efficient manner outside of personal income.

The couple now have a functioning limited company structure that allows them to retain and invest profits in a far more tax-efficient way than was possible as a sole trader. They have a clear and proactive plan for long-term financial security that was simply not available to them before.