Payroll Costs 2026 – What Employers Must Do Now

If you run a business, your payroll costs have increased from April 2026.

Many business owners are seeing higher staff costs, tighter margins, and pressure on cash flow.

This is not temporary. It is a permanent change in employer costs.

This guide explains what has changed and what you should do now.

What changed in April 2026

Two key updates:

• National Living Wage increased to £12.71 per hour
• Employer National Insurance increased to 15%

These changes increase your cost per employee.

What this means for your business

Your staff cost includes more than wages:

• Basic pay
• Employer National Insurance
• Pension contributions
• Holiday pay

Even a small increase in hourly rates can significantly impact your annual costs.

Example

A full-time employee now costs more due to:

• Higher hourly rate
• Increased employer NIC

Across a team, this can add thousands per year.

Common problems

Many businesses:

• Do not update payroll correctly
• Underestimate total employee cost
• Do not adjust pricing
• Ignore profit impact
• Miss compliance rules

This leads to reduced profit and potential penalties.

What you should do now

1. Review payroll

Ensure all employees meet minimum wage rules.

2. Calculate true costs

Include all employer costs, not just wages.

3. Review pricing

Higher costs may require price adjustments.

4. Improve efficiency

Review staff hours and productivity.

5. Stay compliant

Avoid HMRC penalties by keeping payroll accurate.

How we help

We support businesses with:

• Payroll setup and processing
• Minimum wage compliance
• Cost planning
• Cash flow support
• Ongoing payroll services

Take action

Payroll costs have increased. You need to adapt.

A simple review can protect your profit and reduce risk.

Inheritance Tax is no longer just a concern for the very wealthy.

More families are now being caught by Inheritance Tax. This is mainly because property prices and asset values have increased, while the tax-free thresholds have remained the same for many years.

If you do not plan early, a large part of your estate could go to HMRC instead of your family.

This guide explains what is happening and what you should do now.

Why more people are paying Inheritance Tax

The main reason is simple.

Your assets have increased in value, but the tax-free limits have not kept up.

For example:
• House prices have risen significantly
• Investment values have increased
• Business values have grown

However, the Inheritance Tax thresholds have remained largely frozen.

This means more estates are crossing the tax threshold each year.

Current Inheritance Tax thresholds

The standard rules are:

• £325,000 Nil Rate Band per person
• Additional £175,000 Residence Nil Rate Band if passing your home to children

This means a couple can potentially pass up to £1 million tax-free if structured correctly.

Anything above this is usually taxed at 40%.

Why this creates a problem

Many families now fall into this situation:

• Family home worth £600,000 to £1,000,000
• Savings and investments
• Pension or business interests

Even without being “wealthy”, the total estate can exceed £1 million.

This leads to a significant tax bill.

Example

Total estate value: £1.4 million

Available allowances: £1 million

Taxable amount: £400,000

Inheritance Tax at 40%: £160,000

This is a large amount that your family must pay, often within a short time.

Impact on families

Without planning, your family may:

• Need to sell property
• Use savings meant for future security
• Face stress during an already difficult time

In some cases, family businesses or assets must be sold to pay the tax.

Business owners and new risks

Recent changes have increased concern for business owners.

Reliefs such as Business Property Relief are now under more scrutiny and may be limited.

If your business value exceeds certain thresholds, part of it may be exposed to Inheritance Tax.

This means your family business could face a tax bill when passed to the next generation.

Why early planning is essential

Inheritance Tax planning is not something to leave until later.

The earlier you plan, the more options you have.

Good planning can:
• Reduce or eliminate tax
• Protect your assets
• Ensure smooth transfer to your family

Key strategies to consider

1. Use both spouse allowances

Married couples can combine allowances to maximise tax-free thresholds.

2. Make lifetime gifts

You can give assets during your lifetime.

If you survive 7 years, these may fall outside your estate.

3. Use annual gift exemptions

You can give away a set amount each year tax-free.

4. Consider trusts

Trusts can help control how assets are passed on and reduce tax exposure.

5. Review property ownership

Proper structuring can improve tax efficiency.

6. Plan for business succession

Ensure your business passes smoothly without creating a tax burden.

Common mistakes to avoid

Many people:

• Do no planning at all
• Assume their estate is below the threshold
• Ignore rising property values
• Do not update wills
• Miss available reliefs

These mistakes lead to unnecessary tax.

How we help at SV & Co

We help individuals and families:

• Review their estate position
• Calculate potential Inheritance Tax
• Plan tax-efficient structures
• Use available reliefs and allowances
• Create long-term strategies

We focus on practical planning that works for your situation.

Take action now

More families are now affected by Inheritance Tax than ever before.

This is not because they are wealthier, but because asset values have increased while thresholds have stayed the same.

If you own property, investments, or a business, you should review your position now.

A simple plan today can save your family a significant tax bill in the future.

If you run a limited company, your income strategy needs a review.

Dividend tax has increased, and the allowance remains low. Many directors now pay more tax than necessary.

This guide explains what changed and how to reduce your tax.

What changed in 2026

Dividend tax rates:

• 10.75% basic rate
• 35.75% higher rate
• 39.35% additional rate

Dividend allowance remains £500.

Why this matters

Most directors take income as:

• Salary
• Dividends

Higher dividend tax reduces your take-home income.

Example

Dividend income: £40,000
Allowance: £500

Taxable: £39,500

This creates a higher tax bill without planning.

What you should do now

1. Review salary and dividend mix

Adjust based on new tax rates.

2. Use pension contributions

• Reduce corporation tax
• Avoid dividend tax

3. Monitor tax bands

Avoid unnecessary higher rate tax.

4. Use spouse allowances

Split income efficiently.

5. Review director’s loan account

Avoid additional tax charges.

Common mistakes

• Using old strategies
• Ignoring tax thresholds
• No pension planning
• Taking dividends without review

How we help

We help directors:

• Plan tax-efficient income
• Reduce personal tax
• Structure dividends properly
• Stay compliant

Take action

Dividend tax has changed. Your strategy should change.

A review can increase your take-home income.

If you are a landlord in the UK, 2026 has brought major changes.

Many landlords in Southall and across West London are seeing their rental profits reduce. Higher tax, new rules, and more reporting requirements are making property investment more complex.

If you do not plan properly, you will pay more tax and face unnecessary stress.

This guide explains what has changed and what you should do now.

Why landlords are feeling the pressure

There are three main reasons:

Making Tax Digital for landlords
Section 24 mortgage interest restrictions
Higher tax and compliance requirements

These changes directly affect your rental income and cash flow.

Making Tax Digital for property income

From April 2026, landlords earning over £50,000 must follow Making Tax Digital.

This means you must:
• Keep digital records of income and expenses
• Use HMRC-approved software
• Submit updates every 3 months
• File an annual final declaration

This is a big shift from the old once-a-year tax return.

If your records are not organised, quarterly reporting will become difficult.

What this means for you

You now need to:
• Track income and expenses regularly
• Keep digital records throughout the year
• Stay on top of deadlines

Missing deadlines can lead to penalties.

Section 24: The hidden tax problem

Section 24 rules mean you can no longer deduct mortgage interest fully from rental income.

Instead:
• You pay tax on the full rental profit
• Then receive a basic rate tax credit

This often results in higher tax, especially for higher rate taxpayers.

Example

Rental income: £20,000
Mortgage interest: £10,000

Before Section 24:
Tax on £10,000 profit

Now:
Tax on £20,000 income, then partial relief

This increases your tax bill significantly.

Are you claiming all allowable expenses?

Many landlords miss out on valid expense claims.

You can claim:
• Letting agent fees
• Repairs and maintenance
• Insurance
• Accountancy fees
• Service charges
• Utility bills paid by you
• Replacement of domestic items

If you miss these, your taxable profit increases.

Common mistakes landlords make

• Not keeping proper records
• Mixing personal and property expenses
• Missing allowable expense claims
• Not planning for tax payments
• Ignoring new MTD rules
• Relying on outdated advice

These mistakes cost money every year.

How to reduce your tax legally

You can take control with the right planning.

Use proper accounting software
Tools like Xero or QuickBooks help you stay compliant and organised.
Plan your ownership structure
In some cases, holding property in a limited company can reduce tax.
Split ownership between spouses
This allows you to use both tax allowances and lower tax bands.
Time your expenses properly
Plan repairs and costs in the right tax year.
Work with a property tax specialist
Generic advice is not enough for landlords today.

How we help landlords at SV & Co

At SV & Co Chartered Certified Accountants, we specialise in property tax.

We support landlords across Southall, Ealing, and West London.

We help you:
• Set up MTD-compliant systems
• Reduce tax on rental income
• Claim all allowable expenses
• Plan your property portfolio
• Stay compliant with HMRC

We make the process simple so you can focus on your tenants and investments.

Take action now

Landlord tax rules have changed.

If you do not act, your profits will continue to reduce.

A simple review can help you:
• Save tax
• Avoid penalties
• Improve cash flow
• Plan your property future

Contact SV & Co today and take control of your rental income.

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Dividend Tax 2026: How Limited Company Directors Can Reduce Their Tax Bill

If you run a limited company in the UK, your tax position has changed.

From the 2026 tax year, dividend tax rates have increased. At the same time, the dividend allowance remains low. This means many directors will pay more tax when taking money out of their company.

If you are still using the same strategy as last year, you are likely overpaying.

This guide explains what has changed, how it affects you, and what you should do now.

What has changed in dividend tax?

From April 2026, dividend tax rates are:

• 10.75% for basic rate taxpayers

• 35.75% for higher rate taxpayers

• 39.35% for additional rate taxpayers

The dividend allowance remains at £500.

This means only £500 of dividend income is tax-free. Anything above this is taxed at the rates above.

For many business owners, this creates a higher overall tax bill compared to previous years.

Why this matters for company directors

Most limited company directors take income in two ways:

• Salary

• Dividends

This structure works because:

• Salary uses your personal allowance

• Dividends are taxed at lower rates than salary

However, with higher dividend tax rates and a low allowance, the balance has shifted.

If you do not review your structure, you may:

• Pay more personal tax

• Miss available reliefs

• Reduce your overall take-home income

Example: How tax can increase

Let’s take a simple example.

You take £40,000 as dividends from your company.

After the £500 allowance, £39,500 is taxable.

If you are a higher rate taxpayer, you could pay 35.75% tax on most of this amount.

This results in a significant tax bill.

Without planning, many directors lose thousands each year.

What you should do now

You should review your income strategy before the tax year progresses.

Key areas to focus on:

Review your salary and dividend mix

A small adjustment in salary can reduce overall tax. The right balance depends on your total income and company profits.

Use pension contributions

Company pension contributions:

• Reduce corporation tax

• Do not attract dividend tax

• Help build long-term wealth

This is one of the most effective tax planning tools available.

Check your tax bands

You need to monitor when you move from basic rate to higher rate tax. Planning your income can help you stay within lower tax bands where possible.

Use your spouse’s allowance

If your spouse is a shareholder, you can use both allowances and lower tax bands. This reduces the total tax paid by the household.

Review director’s loan account

If you have taken money from the company, it must be structured correctly. Poor planning can lead to additional tax charges.

Plan before year end

Last-minute planning often limits your options. Early planning gives you more control and better results.

Common mistakes to avoid

Many directors make these mistakes:

• Using last year’s strategy without review

• Ignoring tax band thresholds

• Not using pension contributions

• Taking large dividends without planning

• Leaving decisions until January

These mistakes increase your tax bill unnecessarily.

How we help at SV & Co

At SV & Co Chartered Certified Accountants, we work with limited company directors across Southall, Ealing, and West London.

We help you:

• Create a tax-efficient salary and dividend strategy

• Reduce personal and corporation tax

• Plan pension contributions properly

• Stay compliant with HMRC

• Understand your income clearly

We do not use generic advice. Every plan is based on your income, business, and long-term goals.

Take action now

Dividend tax has changed. Waiting will cost you money.

If you run a limited company, this is the right time to review your income structure.

A simple review can help you:

• Reduce your tax bill

• Increase your take-home income

• Plan your finances with confidence

Contact SV & Co today and make sure your tax strategy works for you, not against you.

Feeling overwhelmed by the new tax rules? You’re not alone.
Making Tax Digital (MTD) is transforming how individuals, landlords, and businesses manage their tax reporting — and whether you’re VAT-registered or not, it’s something you need to understand right now.

Let’s break it down simply together — so you know what’s happening, how it affects you, and how to stay compliant while saving time and money.

What is Making Tax Digital (MTD)?

Making Tax Digital (MTD) is HMRC’s move to modernise the tax system.
It means you must keep digital records and submit your tax returns electronically using HMRC-approved software.
No more paper returns, no more manual entries into the HMRC website. Everything is becoming digital — and mandatory.

Who Does MTD Affect?

You’ll be impacted if you are:

A VAT-registered business (even voluntary VAT)
A self-employed person (sole trader)
A landlord earning rental income
Eventually, a company liable for Corporation Tax (future phase)

In short:
Whether you’re small, growing, VAT-registered or non-VAT registered, MTD will affect you.

MTD for VAT Clients: What You Must Know

If you are VAT-registered (regardless of turnover):

You must keep digital VAT records
You must submit VAT Returns through MTD-compatible software (like Xero, QuickBooks, Sage)

Since April 2022, ALL VAT-registered businesses must follow MTD rules, even if their turnover is below the VAT threshold (£90,000 as of 2024/25).

Still using manual spreadsheets? It’s time to upgrade — penalties for non-compliance have already started.

MTD for Non-VAT Clients: What’s Coming?

MTD for Income Tax Self Assessment (MTD for ITSA) starts in April 2026 for:

Self-employed people and landlords earning over £50,000 per year.

Those earning between £30,000 and £50,000 will join MTD a year later, from April 2027.

If your income is under £30,000 — you’re safe for now. But HMRC is planning to bring everyone into MTD eventually.

What Kind of Income Must Be Declared Under MTD?

For VAT-Registered Clients (MTD for VAT):

You must digitally record and report:

All sales (standard, reduced, zero-rated, exempt)
All business-related purchases and expenses
VAT charged and VAT paid
Any VAT adjustments (bad debt, partial exemptions)

For Self-Employed and Landlords (MTD for Income Tax):

You must digitally record and quarterly report:

Business income (sales, services, freelance work)
Rental income from property
Business expenses (office supplies, advertising, travel)
Property expenses (repairs, insurance, letting agent fees)

Note:
Other personal income like employment salary, pensions, savings interest, or dividends will still be reported annually, outside of quarterly updates.

How Will MTD Impact You?

More frequent reporting — Quarterly updates plus year-end submission.

Better financial visibility — Regular updates help you spot cash flow problems earlier.

Tighter record-keeping — You’ll need to stay on top of receipts, invoices, and bookkeeping.

New software costs — You’ll need MTD-compliant software, but it often improves efficiency.

Potential penalties — If you miss submissions, HMRC’s new points-based penalty system could hit you with fines.

What Should You Do Next?

✔️ Switch to MTD-Compliant Software
If you’re still using spreadsheets or manual systems, now is the time to upgrade.
Look into Xero, QuickBooks, Sage, or FreeAgent — all HMRC-recognised.

✔️ Get Professional Support
Navigating MTD can be tricky, especially if you have multiple income streams (like self-employment and rental).
An accountant can ensure you stay compliant and find hidden tax-saving opportunities.

✔️ Keep Digital Records from Now
Even if MTD isn’t mandatory for you yet, start keeping digital records. It’ll make the transition much easier.

Conclusion: MTD Is the Future — Are You Ready?

Making Tax Digital is no longer optional.
Whether you’re a self-employed freelancer, landlord, or business owner, preparing early is the smartest move.
By staying ahead, you’ll avoid penalties, stay organised, and maybe even save tax by improving your record-keeping.

At SV&Co, we help individuals and businesses transition smoothly to MTD compliance.
Whether you need advice on the right software, quarterly submission help, or full bookkeeping support — we’re here to make it simple.

Being self-employed in the UK brings flexibility and opportunity, but it also means taking responsibility for your own taxes. Many self-employed people unknowingly make mistakes when claiming expenses, costing them valuable tax savings. In this blog, we explain the most common errors and how you can claim correctly to maximise your tax efficiency.

Common Mistakes Self-Employed Workers Make When Claiming Expenses

1. Missing Out on Allowable Expenses
Many self-employed individuals fail to claim all eligible expenses. If it’s a cost incurred “wholly and exclusively” for business purposes, you can claim it.

Examples often missed include:

Business mileage
Home office expenses
Professional memberships
Mobile phone bills used for business

2. Claiming Personal Expenses
Claiming personal or mixed-use expenses without proper adjustment can lead to HMRC penalties.
Tip: Always separate personal and business costs. If an item is used partly for business (like your phone), only claim the business percentage.

3. Poor Record-Keeping
Not keeping accurate receipts and records leads to errors and missed claims. HMRC expects detailed evidence of your expenses for at least 5 years after the 31 January submission deadline.

4. Not Using Simplified Expenses
Self-employed people can use Simplified Expenses for costs like vehicle use and working from home. These flat rates often save time and reduce errors compared to working out actual costs.

5. Forgetting About Capital Allowances
When you buy large items like computers, machinery, or equipment for business use, you can claim capital allowances and reduce your tax bill. Many forget to claim the full Annual Investment Allowance (AIA).

6. Ignoring Professional Advice
Trying to manage your own tax affairs without understanding all the rules can mean missing legitimate claims. Working with an accountant can ensure you maximise deductions legally and efficiently.

How to Save More Tax as a Self-Employed Person

Claim All Eligible Expenses
Review your spending carefully and claim everything you’re entitled to — from software subscriptions to travel costs.

Use a Business Bank Account
Separating your business and personal finances makes record-keeping easier and ensures you don’t miss deductible expenses.

Keep Accurate Records
Use bookkeeping apps or cloud accounting software to track every business-related expense in real-time.

Take Advantage of Simplified Expenses
If you work from home or use your car for business, using HMRC’s simplified rates could save you both time and tax.

Invest in Your Business
Buying necessary equipment before your accounting year-end can bring tax savings sooner through capital allowances.

Work with a Professional Accountant
An expert accountant can find additional claims, correct mistakes, and help you save far more than their fee in tax over time.

Conclusion

Self-employment offers fantastic opportunities, but simple mistakes in expense claims can cost you thousands. Understanding what you can and cannot claim, keeping good records, and getting professional advice will help you save more tax and keep your business financially healthy.

SV&Co are specialists in helping self-employed individuals claim correctly and pay only what they need to.
Contact us today for a free consultation and discover how much you could be saving.

Accessing funding has always been a challenge for early-stage businesses. In 2025 and beyond, the Seed Enterprise Investment Scheme (SEIS) has become even more critical for startups looking to secure investment, grow, and succeed in an increasingly competitive economy..

What is the SEIS Scheme?

The Seed Enterprise Investment Scheme (SEIS) was introduced by the UK government to encourage investment in young companies by offering attractive tax benefits to investors. Startups can raise up to £250,000 in early-stage funding, while investors receive valuable tax reliefs, making SEIS one of the most powerful funding tools available.

Why SEIS is More Important Than Ever in 2025

1. Increased Funding Limits
Since April 2023, the SEIS funding limit was raised to £250,000 (previously £150,000). This means startups now have access to more capital at their crucial growth stage.

2. Higher Investor Allowances
The annual investor limit has increased to £200,000. More investors can now contribute larger amounts, improving the chances of raising full funding rounds quickly.

3. Economic Uncertainty Drives Smart Investment
In a time of economic shifts and rising inflation, investors are seeking opportunities that offer strong tax advantages. SEIS provides 50% income tax relief, capital gains tax exemptions, and loss relief, making it a highly attractive investment option in 2025 and beyond.

4. Government Focus on Innovation
The UK government is promoting innovation-led growth. Tech, green energy, fintech, and healthcare startups particularly benefit from SEIS, making it a vital tool for new companies aligned with future sectors.

5. Competitive Edge for Startups
Having SEIS Advance Assurance signals to investors that your startup is compliant, trustworthy, and investment-ready. This gives startups a real edge over competitors who aren’t SEIS-approved.

Key Tax Benefits for Investors

50% Income Tax Relief on investments up to £200,000
No Capital Gains Tax on SEIS shares after three years
Loss Relief if the investment fails
Inheritance Tax Relief after two years

How Startups Can Use SEIS to Grow

Secure crucial early-stage capital
Build investor confidence
Fuel product development, marketing, and scaling
Attract long-term backers with tax incentives

Conclusion

In 2025 and the coming years, SEIS is not just an advantage—it is a necessity for serious startups. With bigger funding limits, better tax breaks, and a market hungry for innovative investment opportunities, startups that leverage SEIS will be far better positioned for success.

If you are launching a business or planning to raise funding, securing SEIS Advance Assurance should be one of your first steps.

SV&Co specialises in helping startups successfully apply for SEIS and prepare for funding rounds. Contact us today to get started.

you are starting or growing a business in the UK, choosing the right business structure is essential. One of the most common decisions new business owners face is whether to operate as a limited company or remain self-employed. This guide explores the limited company vs self-employed UK 2025 comparison, focusing on tax efficiency, legal protection, cost implications, and long-term benefits.

What is the Difference Between a Limited Company and Being Self-Employed?

Self-Employed (Sole Trader):
A self-employed person runs the business as an individual. You and your business are legally the same entity. You are responsible for all debts and liabilities, and your income is taxed through the Self Assessment system.

Limited Company:
A limited company is a separate legal entity. It is responsible for its own debts, pays Corporation Tax on profits, and allows owners (shareholders) and directors to extract income through salary and dividends.

This distinction is key when comparing limited company vs self-employed UK 2025 from a tax and risk perspective.

Tax Comparison: Limited Company vs Self-Employed UK 2025

Business Type	Tax Type	Rate (2025)
Self-Employed	Income Tax	20%, 40%, 45%
	National Insurance (Class 2 & 4)	Up to 9%
Limited Company	Corporation Tax	19% to 25% (based on profits)
	Income Tax on Salary	According to PAYE thresholds
	Dividend Tax	8.75%, 33.75%, 39.35%

By incorporating, many business owners benefit from lower Corporation Tax and more flexibility in how profits are distributed, making the limited company option more tax efficient beyond certain income thresholds.

Pros and Cons of Being Self-Employed

Advantages:

Simple and inexpensive to set up
Less administrative burden
Full control over business decisions and income

Disadvantages:

Higher tax rates on growing profits
Unlimited personal liability
May lack credibility with lenders and suppliers

Pros and Cons of Operating as a Limited Company

Advantages:

Tax-efficient profit extraction through dividends
Limited liability protection for directors and shareholders
More professional image for business clients
Greater access to tax planning strategies and allowable expenses
Possibility of income splitting with a spouse

Disadvantages:

More complex accounting and filing responsibilities
Increased costs for compliance and accountancy support
Directors have legal obligations

When Should You Choose a Limited Company Over Being Self-Employed?

For many people, the switch from self-employed to limited company becomes beneficial when:

Annual profits exceed £30,000 to £40,000
You want to build business credit and a professional image
You plan to reinvest profits or grow your business
You need personal liability protection
You want to benefit from tax planning and pension contributions

These factors make the limited company vs self-employed UK 2025 decision especially important for growing businesses.

Tax Saving Tips for Limited Companies in the UK

Take a low director’s salary (within personal allowance)
Draw additional income as dividends to save on National Insurance
Claim all business expenses including home office, travel, and subscriptions
Make pension contributions directly from the company
Hire family members if they contribute to the business
Retain profits within the company to defer personal tax

What About VAT?

If your annual taxable turnover exceeds £90,000, VAT registration is compulsory. Both self-employed individuals and limited companies can register voluntarily. Being VAT-registered may improve cash flow and increase business credibility, especially in B2B sectors.

Conclusion

There is no universal answer to the limited company vs self-employed UK 2025 question—it depends on your income level, business goals, and personal preferences. For smaller businesses, self-employment might offer simplicity and lower costs. However, as profits grow, the tax savings and legal protections offered by a limited company often outweigh the extra admin.

Before deciding, speak to a qualified accountant to ensure your chosen structure aligns with your business objectives and minimises your tax burden.

Choosing between being employed or self-employed can significantly impact your tax position, income, and financial planning. This guide breaks down the key differences, tax efficiency, and the pros and cons of each option to help you make an informed decision.

Understanding Employment in the UK

Being employed means working for an employer under a contract. Your income tax and National Insurance (NI) are automatically deducted through the PAYE (Pay As You Earn) system.

Pros of Being Employed:

Regular, predictable income
Access to employee benefits such as holiday pay, sick pay, and workplace pensions
No requirement to manage your own tax filings

Cons of Being Employed:

Limited tax relief and deductions
Higher National Insurance contributions
No control over work terms or client selection

Understanding Self-Employment in the UK

Self-employed individuals run their own businesses or work as freelancers. You are responsible for registering with HMRC and filing your own Self Assessment tax return each year.

Pros of Being Self-Employed:

Greater tax efficiency through allowable expense claims
Lower National Insurance contributions (Class 2 and 4)
Full control over your income, pricing, and business direction

Cons of Being Self-Employed:

Irregular income and lack of employment benefits
Responsibility for tax records and submissions
No statutory sick pay or employer pension contributions

Tax Efficiency Comparison

Feature	Employed	Self-Employed
Tax System	PAYE (automatic deductions)	Self Assessment (manual filing)
Expense Claims	Limited	Wide range of allowable business expenses
NI Contributions	Class 1 (higher rate)	Class 2 & 4 (lower rates)
Pension Contributions	Often employer-funded	Voluntary and self-funded
Income Flexibility	Fixed salary	Earnings based on workload and pricing

Which Option is More Tax-Efficient?

Self-employment often offers greater tax efficiency due to lower National Insurance rates and the ability to deduct legitimate business expenses. However, employment provides financial security, simplicity, and workplace benefits. The best option depends on your income level, risk tolerance, and personal circumstances.

Need Help Deciding?

At SV&Co, we advise individuals and small business owners on the most tax-efficient structure for their needs. Whether you are considering going self-employed or staying employed, we offer expert guidance tailored to your financial goals.

Contact us today for a free consultation.