How we restructured a Stockwell Portuguese cafe for £6,700 annual saving
Client K runs a Portuguese cafe and pastelaria on the South Lambeth Road trading as a sole trader, with profits around £62,000, selling eat-in coffee and pastries, hot takeaway, and packaged Portuguese goods and groceries. He was paying higher-rate income tax plus Class 4 NIC, with no structure for his wife who ran the counter and books, and the wrong VAT approach across the mixed product range.
We incorporated the business into a Ltd company, set Client K's salary at the NIC-optimal level with the balance as dividends, brought his wife onto proper PAYE and as a minority shareholder reflecting her genuine role, and reviewed the VAT (eat-in and hot food standard-rated, packaged groceries and cold items zero-rated), which had been applied at 20% across the board, overpaying on the zero-rated lines.