Making Money Self-Employed: What You Need To Know
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Nov 24, 2025 In this discussion, financial planner Tom Ashworth shares valuable insights on self-employment. He provides practical advice on when to set up a limited company, covering key factors like profit retention and tax efficiency. Tom also tackles budgeting for fluctuating incomes and explains the importance of understanding business expenses. He highlights strategies for withdrawing funds from a company while maintaining compliance. Finally, Tom compares pensions and ISAs for self-employed individuals, making complex topics accessible and actionable.
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Use A Ltd To Control Your Personal Income
- Consider a limited company when you need control over personal income and to avoid pushing yourself into higher tax brackets.
- Keep company profits inside the business if you don't need them to manage personal tax efficiently.
Making Tax Digital Raises Sole Trader Costs
- Making Tax Digital will raise the baseline admin for sole traders and reduce the simplicity advantage of being a sole trader.
- The change forces better organisation and clearer business understanding over time.
Smooth Variable Income With A Fixed Wage
- Smooth variable income by paying yourself a consistent monthly wage that covers your personal costs.
- Build company and personal emergency funds for seasonal dips and annual bills.