- Accounts submitted to HMRC & Companies House
Addtional activities and fees of using a limited company
You have double amount of accountancy costs. You need to submit a personal self assessment tax return as a property investor, which would carry on as a director of a limited company. In addition, you also have to file a limited company set of accounts to Companies House and a company tax return to HMRC
You are paying tax twice. A company will pay 19% corporation tax and you will also pay income tax on the money that you take out of the company (8.25% basic rate, 33.75% high rate, 39.35% additional income tax on dividends). The first £2,000 dividends are tax free.
Missing out on personal tax advantages. A company does not get a tax-free band. As individuals you get an allowance of £12,500 before you pay any income tax without the need of a limited company. If your spouse is not working it would be better to allocate property income in their name via a deed of trust to gain the personal tax band advantage.