Tax Advice Please

Rolo_Tomasi

Debt_Free_Chick wrote: »

But this is the same treatment as a sole trader. A sole trader does not pay tax on any loan repayments.

I agree but in order to make the repayments of £1000 per month there must be £12k profit which, as a sole trader, will attract income tax at 20%/40% and nic @ 8%. A £12k profit in a Ltd Company would only attract tax @ 21% and it could be drawn out as a loan repayment without any further tax due.

Possetjohn

Debt_Free_Chick wrote: »

But this is the same treatment as a sole trader. A sole trader does not pay tax on any loan repayments.

This confuses me! As Clapton said Capital Repayments are made from the taxed profits for a sole trader. So do you mean there is no specific taxation on the capital repayment or.....

Possetjohn

Thanks Jimmo,

After the replies to my previous post you highlighted, I understand it the way you have nicely set out in your example.

It was just the way it was expressed in debtfreechick's post made me think perhaps I was missing something.

Always looking for legal ways to pay less tax