Decreasing tax

Secret2ndAccount

If you are a sole trader, you can't decide to pay yourself more or less. All of the money you receive from customers, minus all of your expenses = your profit, and you are taxed on that profit at the end of the year. Your business is you. One and the same.

If you form a Ltd Co, that is an entity, separate from you. You can decide to retain profits within the business, or to pay yourself (via dividends or salary) more or less. You can't get the business to pay off the loan, unless the loan was made to the business. If you did, this would be a benefit-in-kind, and you would pay tax on the repayments as if they were salary anyway.
For a higher rate taxpayer, paying into a pension is often a good idea because you save the 40% tax. It's a very efficient way of building a pension, but you don't end up with more in your pocket right now.
Without getting too complicated, the only legal way for you to increase your take-home is by forming a Ltd Co and paying yourself part of your profits in dividends rather than salary. Dividends are taxed at a lower rate than salary. You have to weigh this against the cost and hassle of producing annual accounts and administering the business. It's more onerous than being a sole trader.

Pennywise

Secret2ndAccount said:

Without getting too complicated, the only legal way for you to increase your take-home is by forming a Ltd Co and paying yourself part of your profits in dividends rather than salary. Dividends are taxed at a lower rate than salary. 

There isn't really much of a difference anymore due to the relatively new personal tax on dividends, and of course the company has already paid corporation tax on the profits paid out as dividends, so now very similar.

The real benefit is the ability to keep money in the company, so pay only the corporation tax and avoid personal tax on drawing out more than needed.  That's a big difference to being a sole trader when you pay personal taxes on profits whether you draw it or not.

Someone wishing to draw out all profits won't see much benefit from being a limited company anymore, it's those able to build up retained profits without spending/withdrawal that see the biggest benefit.