Limited company worth it for the child care vouchers?

[fruitstick]

I am currently a sole trader. This year I have earned £25,000.

I was told that it's not worth becoming a limited company until I was a high rate tax payer.

However, if I was a limited company, I could pay myself childcare vouchers and get the tax relief on them.

Would it be worth it for that alone?

Who told you that? Not true as you will see in a minute.

First, to answer your question, no it probably wouldn't be worth it for that alone because you would only save about £600 a year through vouchers and it would cost you about that to have an accountant do the annual accounts and tax return. Depending on how you arrange the childcare payments there might be a fee for that too.

But with an income of £25,000 you could save up to £1,400 a year in tax and NI through a Ltd company on top of the voucher savings!

Interesting! I never knew that mranchovy. I'm a sole trader and this current year I'll be earning around £25,000 but how does being an limited company save tax? Is it easy to set up at company or do you need someone to do it for you?
Any advice would help me too!