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There are a number of good reasons for considering the use of a company or to incorporate your business. However, there are many factors to consider before doing so. The changes to the tax law may change this advice for…
There are a number of good reasons for considering the use of a company or to incorporate your business. However, there are many factors to consider before doing so. The changes to the tax law may change this advice for…
Below we highlight potential disadvantages of trading as a company. Administration Companies have higher annual compliance requirements in terms of administration and accounting. So, the costs are usually higher for a company than for a sole trader or a partnership…
Below are some other non-tax advantages of incorporation. Limited liability Normally operating as a company provides limited liability. If a shareholder's shares are fully paid, he cannot normally be required to invest any more in the company, or be liable…
Capital gains When you incorporate your existing business, it will involve transferring at least some of your assets (e.g. goodwill) from your sole trade or partnership into your new company. You need to be careful as the transfer of goodwill…
Corporation tax rate Profits of the company are taxed at 20%. National Insurance The rate of employees' NIC is 12%. That is applied to all the earnings between the lower and upper earnings limits (Between £8,060 and £43,000 for 2016/17)…
In our opinion, there is still beneficial for a director/shareholder to take a dividend rather than an increase in salary. Under the new rules the amount of the tax saved will be less than before, but is still beneficial. Company…
You may think that since the dividends tax changes to trade as a sole trader, or a partnership may now be a better option than to trade as a limited company. However, in our view, there is still a benefit…
From 6 April 2016: The 10% dividend tax credit has been abolished with the result that the cash dividend received is the gross amount potentially subject to tax. New rates of tax on dividend income will be 7.5% for basic…
Usually if you run your business as a company, you may save a considerable amount of tax. However, in certain circumstances this may not be the case, and a sole trade or partnership structure may be better. If your business…